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Posti Group improves its result substantially in the first quarter - the market situation remains challenging

30.04.2015

POSTI GROUP CORPORATION INTERIM REPORT, JANUARY-MARCH 2015 APRIL 30, 2015 AT 10:00 (EET)

Posti Group Corporation Interim Report Q1/2015

 

Key figures of Posti Group

  1-3 1-3 1-12
  2015 2014 2014
Net sales, EUR million 435.9 470.0 1,858.7
Operating result (non-IFRS), EUR million* 20.6 17.6 50.8
Operating result (non-IFRS), %*   4.7 3.7 2.7
Operating result (EBIT), EUR million 20.5 4.3 5.8
Operating result (EBIT), %   4.7 0.9 0.3
Result before taxes, EUR million 21.3 2.1 -4.6
Result for the period, EUR million 15.9 4.0 -4.4
Return on equity (12 months), %   1.2 1.0 -0.7
Return on invested capital (12 months), %   3.1 0.7 1.0
Equity ratio, %   46.6 46.6 45.9
Gearing, %   11.7 18.7 17.2
Gross capital expenditure, EUR million   16.5 12.8 57.5
Average number of employees   22,579 25,066 24,617

*) Non-IFRS = excluding non-recurring items

 

Heikki Malinen, President and CEO: 

"The start of the year was marked by major renewal for Posti Group in the form of a new name and renewed organization. The first quarter was nevertheless very challenging with respect to sales, as expected, due to the economic recession, tight market situation and declining mail delivery volumes. Net sales decreased in Postal Services, Parcel and Logistics Services and Itella Russia. OpusCapita's net sales improved.

In spite of the decline in net sales, Posti Group achieved a substantial improvement in its result. The result was supported by the Finnish parliamentary elections and Easter falling in the first quarter. The Group's operating result improved substantially year-on-year to EUR 20.5 million, and the operating result before non-recurring items for Parcel and Logistics Services showed a profit, which was particularly pleasing.  

While our result for the first quarter was positive, there is a lot of uncertainty regarding the outlook for the rest of the year. Unfortunately, it does not appear that the Finnish economy will give a boost to the logistics sector. In Russia, the decreased purchasing power of consumers is also leading to lower demand for logistics services.

The improvement in the result is partly attributable to the fact that no non-recurring items related to the transformation of our business were recognized in the first quarter. Another, more long-term factor is that the extensive efficiency improvement measures initiated by the Group in 2013 have begun to produce results. We have successfully reduced our costs and improved the efficiency of operations across all business groups, in production, and in administrative functions. In January 2015, we launched a new two-year EUR 75 million performance improvement program.

One of the most positive aspects of the first quarter was growth in parcel traffic increasing to 5%. Our investments in expanding our network of parcel points have proved to be the right move. The parcel points have received a great deal of positive feedback from consumers, and the volume of parcels sent via parcel points was up 45% year-on-year. 

In the coming years, digitization will be one of the most significant factors transforming the structures of society, the economy, and commerce. For Posti, this means a great challenge, structural transformation, but also a new area of growth: we will develop our service network and new digital services as paper-based communication declines and customer needs change. I am very pleased to note that Netposti, Posti's electronic mailbox service, is steadily growing in popularity. It now has 600,000 users. The cloud services and e-invoicing services of our IT services company OpusCapita also continued to see strong growth. 

However, digitization will pose a threat to Posti's profitability in the coming years if the company is forced to satisfy the requirements placed on it by existing regulations despite mail delivery volumes being down by half. We hope that Finland's new Government and Parliament will be prepared to adapt the regulation of postal services to the digital era to ensure that postal services can still be produced throughout the country without taxpayer money."
 

 

APPENDICES
Posti Group's Interim Report in full

 

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

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

 

FINANCIAL CALENDAR IN 2015
Interim Report Q2/2013, July 17
Interim Report Q3/2014, November 2 
 

IMAGES AND LOGOS
www.posti.com/media

 

Posti Group 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 2014 amounted to EUR 1,859 million. We employ approximately 23,000 professionals who serve our customers in Finland under the name Posti and in other countries under the name Itella. www.posti.com.

Posti-Group-Corporation-Interim-Report-Q1-2015.pdf