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Financial statements for Itella Corporation and the Board of Directors' report for 2010: A difficult year, reforms continued

16.02.2011

ITELLA CORPORATION STOCK EXCHANGE RELEASE FEBRUARY 16, 2011, AT 10:00 AM (EET)

Year 2010

 

October-December 2010

Key figures of Itella Group

  2010 2009 2008
Net sales, MEUR 1,841.6 1,819.7 1,952.9
Operating profit (EBIT), MEUR 38.1 46.7 69.0
EBIT margin, % 2.1 2.6 3.5
 Operating profit (EBIT), MEUR *) 55.3 86.3 95.1
 EBIT margin, % *) 3.0 4.7 4.9
Profit before tax, MEUR **) 31.0 19.6 46.6
Return on equity (12 months), % 1.4 -0.7 2.6
Return on investment (12 months), % 4.2 5.8 12.4
Equity ratio, % 50.5 48.5 51.1
Gearing, % 18.4 19.7 14.8
Gross capital expenditure, MEUR 81.9 144.9 351.5
Personnel on average 28,916 30,217 28,163
Dividends, MEUR 4.4 ***) -- 10.0
*) Excl. non-recurring items      
**) Continuing operations
***) Board of Director's proposal
     

 Jukka Alho, President and CEO:

"The upturn in the economy affected Itella's business with a delay and only in certain areas of our business. Although our financial performance did not meet the targeted level, our already healthy solvency strengthened further.

Itella Mail Communication's profitability declined due to falling volumes and rising production costs, as well as extremely moderate price development. Personnel reductions and other efficiency improvement measures were not sufficient to compensate for these. Considering the decline in net sales from postal operations and the long-term volume development, the less than one per cent price increase in letter postage fees proved to be inadequate. Consequently, we begin a new year with strong price pressures.

Itella Information, our business group specializing in invoicing and financial management services, developed as outlined in our strategy. Progress was made in the solutions business and major deals were closed.

Itella Logistics performed well in the second half, leading to overall net sales growth. This strengthened the business group's profitability even though its result was still in the red. Financial performance in the logistics business will continue to be materially affected by not only the development of Finnish and Scandinavian operations, but Russian operations as well. Demand for ItellaNLC's services has been growing; and particularly in Moscow, the service warehouse utilization rate reached a promising level in view of 2011.

The new EU Postal Services Directive compliant Postal Services Act is scheduled to enter into force in Finland in spring 2011. Its objective is to promote competition. From Itella's perspective, it is vitally important that the scope of universal service (USO) is clearly and unambiguously defined. However, issues that continue to be unresolved in Finland include the financing of postal services in sparsely populated areas, which is included in the universal service obligation but does not permit operations on a market basis.    

Itella and the Finnish supervisory authority have had very dissimilar views on the rules to be applied to cost accounting in postal services, and thereby to pricing. Inconsistencies between the interpretation of the Finnish authorities and the mainstream interpretation in other EU countries will have detrimental repercussions. Clarity is needed on several fundamental issues, for instance on ways of covering the costs of the postal outlet network. Otherwise, we may have to trim the costs arising from the postal outlet network in a way that does not meet the expectations of Finnish citizens. Another potential risk is that we may have to allocate costs to the press and other users of the delivery network in a way that might eventually cause problems to the financing of the universal service."

 

APPENDICES
Itella's financial statements release and the Board of Directors' report
Corporate Governance Report for 2010

FURTHER INFORMATION
President and CEO Jukka Alho, tel. +358 20 451 5600, [email protected]
Tuija Soanj√§rvi, CFO, tel. +358 20 45 20907, [email protected]

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

NEXT FINANCIAL DISCLOSURE 
Q1 interim report will be published on April 29, 2011.

PHOTOGRAPHS AND LOGOS
www.itella.com/media

 

Itella Group provides solutions for managing information and product flows. Itella operates in mail communications, information logistics, and logistics in Europe and Russia. The Group reported net sales of EUR 1,842 million in 2010 and provided work for around 29,000 professionals. Corporate services are delivered under the Itella brand, while the Posti brand is used for services targeted at consumers in Finland. More information on the Group is available at www.itella.com/group.

Corporate Governance Statement 2010_ENGLISH_final.pdf ITELLA_FINANCIALS_2010__.pdf