Posti Group Corporation Interim Report 1–3/2020
January–March
Financial highlights
Net sales decreased by 3.1% to EUR 384.2 (396.6) million.
Adjusted EBITDA was EUR 40.8 (40.6) million, or 10.6% (10.2%) of net sales.
EBITDA increased to EUR 40.1 (36.4) million, or 10.4% (9.2%) of net sales.
The adjusted operating result improved to EUR 12.6 (12.2) million, representing 3.3% (3.1%) of net sales.
The operating result improved to EUR 11.9 (8.0) million, representing 3.1% (2.0%) of net sales.
Net debt to adjusted EBITDA was 1.1x (1.9x).
Posti is updating its outlook for 2020 due to the impact of coronavirus pandemic.
Operational highlights
The global coronavirus pandemic began to impact negatively on Posti’s operations in March, even though Posti’s Parcel and eCommerce business group benefited from the growth of online shopping caused by coronavirus.
The execution of Posti’s strategy and the transformation of postal industry continued: Posti’s logistics solutions continued to grow. The combined net sales of Parcel and eCommerce, Transval and Freight Services represented almost 51% (49%) of the Group’s net sales. The parcel volume of Finland and the Baltic countries increased by 6% (8%). At the same time, the number of addressed letters decreased by 15% (14%) in Finland. The share of mail items covered by the universal service obligation continued to decrease and accounted for only 2.6% (3.6%) of all Posti’s mail items delivered.
On February 24, 2020, Posti signed an agreement, under which it would acquire Aditro Logistics, one of the leading contract logistics companies in the Nordics. The acquisition was in line with Posti’s ambition of growing its logistics, parcel and eCommerce businesses. The transaction was closed after the reporting period on April 2.
Outlook for 2020 (updated)
Posti Group Corporation lowers its outlook for net sales in 2020 due to the growing impact of coronavirus (COVID-19) pandemic. The outlook regarding the development of Posti Group Corporation’s adjusted operating result in 2020 remains unchanged.
The coronavirus situation makes the macro economic outlook extremely difficult to predict for the full year. Because of this, also Posti’s full year outlook includes a significant level of uncertainty.
As a result of the increasing market uncertainty and expected impact of coronavirus on the Finnish and global economy, Posti’s net sales in 2020, excluding possible new acquisitions and divestments, are expected to decrease from the previous year. The Group’s adjusted operating result in 2020 is expected to increase from the previous year, when the postal strike had a significant negative impact on Posti’s results.
The Group’s business is characterized by seasonality. Net sales and operating result in the segments are not accrued evenly over the year. In Postal Services and consumer parcels, the first and fourth quarters are typically strong, while the second and third quarters are weaker.
Previously, Posti expected that its net sales in 2020, excluding possible new acquisitions and divestments, would remain on par with the previous year. The Group’s adjusted operating result in 2020 was expected to increase from the previous year.