About Posti
Governance
Sustainability
Careers
Media

Itella’s result for January–March satisfactory considering the market situation

30.04.2014

ITELLA CORPORATION INTERIM REPORT, JANUARY–MARCH 2014 APRIL 30, 2014 AT 10:00 (EET)

Itella Corporation Interim Report Q1/2014 

Key figures for the Itella Group

 

 

 

 

1-3

1-3

1-12

 

2014

2013

2013

Net sales, EUR million

470.0

496.0

1,976.8

Operating result (non-IFRS), EUR million*

17.6

12.4

50.5

Operating result (non-IFRS), %*

3.7

2.5

2.6

Operating result (EBIT), EUR million

4.3

10.8

9.9

Operating result (EBIT), %

0.9

2.2

0.5

Result before taxes, EUR million

2.1

7.7

-2.4

Result for the period, EUR million

4.0

4.7

7.7

Return on equity (12 months), %

1.0

1.0

1.1

Return on investment (12 months), %

0.7

3.5

1.3

Equity ratio, %

46.6

46.7

47.5

Gearing, %

18.7

21.7

21.1

Gross capital expenditure, EUR million

12.8

11.0

61.1

Average number of employees

25,066

27,561

27,253

Dividends, EUR million

-

-

-

 *) Non-IFRS = excluding non-recurring items, see Appendix 2.

Heikki Malinen, President and CEO

"Itella's business environment remained very challenging in the first quarter due to a demanding market situation in logistics and the transformation of the postal industry. The non-IFRS operating result improved thanks to substantial efficiency improvement measures and, on the whole, the result can be considered satisfactory under the very difficult circumstances. The factors contributing to the decline in net sales included the lower volume of mail delivery, a decline in the demand for transport services, and the depreciation of currencies, the ruble in particular. The result was weakened primarily by significant non-recurring items related to personnel restructuring.

The net sales of Itella Mail Communications declined, but the result was nearly at the same level as in the corresponding period the previous year. The decline in the volumes of addressed letters, newspapers and magazines accelerated considerably in the first quarter. The result for Logistics still showed a loss, but the development was positive due to efficiency improvement measures. Itella Russia's result was in line with plans, taking seasonal variation into account. Net sales decreased due to the depreciation of the ruble. OpusCapita recorded a good result. The strong growth of cloud services continues, with the annual growth estimated at approximately 150%. OpusCapita transmitted a total of 48 million electronic transactions in January-March. The share of electronic transactions of OpusCapita's total volume of transactions is increasing and stood at 30%.

As of the beginning of the year, we organized our Russian business into its own separate business group and we are now reporting its result as a separate segment for the first time. This increases the transparency of our Russian business and the reporting of our results.

During the first quarter, we held negotiations with newspaper publishers regarding the renewal of delivery agreements for the early-morning delivery of newspapers, as early-morning delivery has not been profitable under the current operating model and pricing, and with the current development of circulation volumes. The negotiations resulted in the termination of five early-morning delivery agreements. With some negotiation parties, an agreement was reached on additional months. In addition, in the second quarter one new agreement was signed and negotiations have continued with several newspaper publishers.

Itella has sought to work with publishers to find new solutions to the problem of delivery profitability. We have proposed cooperation based on establishing joint ventures with media companies specializing in early-morning deliveries. We remain prepared to discuss cooperation on early-morning deliveries.

The drastic transformation of the industry is requiring us to continuously implement various adaptation measures. In January, we started cooperation negotiations for basic delivery operations in Itella Posti. The number of dismissals decreased significantly during the negotiations, from an original reduction need of 800 jobs to 407. The need for dismissals was successfully reduced by the implementation of the Uusi polku (New path) program, which offers not only financial support, but also training and support for job seeking, retraining or starting a business. To date, a total of 620 employees have applied for the program.

E-commerce is a very important focus area in our new strategy. I am very pleased that we are able to launch a EUR 10 million construction project related to e-commerce warehousing and dispatch operations at the Voutila warehouse in Vantaa. The project will offer online retailers access to a state-of-the-art warehousing and distribution system that allows consumers to take delivery of products bought online even on the day of purchase."


APPENDICES
Itella's full Interim Report (PDF)

FURTHER INFORMATION
Heikki Malinen, President and CEO, and Sari Helander, CFO
Tel. +358 20 452 3366 (MediaDesk)

DISTRIBUTION
NASDAQ OMX Helsinki
Key media
www.itella.com/financials

FINANCIAL CALENDAR IN 2014
Interim Report Q2/2014, July 18
Interim Report Q3/2014, November 3

IMAGES AND LOGOS
www.itella.com/media

Itella is your first choice for postal, logistics and e-commerce services. We manage the flow of commerce and everyday life in 11 countries. Our net sales in 2013 amounted to EUR 1,977 million. We employ approximately 26,000 professionals. We deliver corporate services under the Itella brand, while the Posti brand is used for services targeted at consumers in Finland. www.itella.com.