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Posti Group's net sales hit by the weak market situation - growth in parcel services

17.07.2015

POSTI GROUP CORPORATION INTERIM REPORT, JANUARY-JUNE 2015 JULY 17, 2015 AT 10.00 (EET)

Helsinki, 2015-07-17 09:00 CEST (GLOBE NEWSWIRE) -- Posti Group Corporation Interim Report Q2/2015

April-June 2015

  January-June 2015

 Key figures of Posti Group

  4-6 4-6 1-6 1-6 1-12
  2015 2014 2015 2014 2014
Net sales, EUR million 406.3 461.9 842.2 931.9 1,858.7
Operating result (non-IFRS), EUR million* -6.8 2.9 13.7 20.5 50.8
Operating result (non-IFRS), %* -1.7 0.6 1.6 2.2 2.7
Operating result (EBIT), EUR million 27.9 -2.1 48.4 2.2 5.8
Operating result (EBIT), % 6.9 -0.4 5.8 0.2 0.3
Result before taxes, EUR million 22.8 -4.1 44.2 -2.1 -4.6
Result for the period, EUR million 17.0 -3.8 32.8 0.2 -4.4
Return on equity (12 months), %     4.4 2.2 -0.7
Return on invested capital (12 months), %     5.8 1.8 1.0
Equity ratio, %     48.0 47.3 45.9
Gearing, %     7.9 18.8 17.2
Gross capital expenditure, EUR million 15.5 18.1 32.0 30.9 57.5
Average number of employees     22,691 25,311 24,617
           
*) Non-IFRS = excluding non-recurring items          

 

 Heikki Malinen, President and CEO:

"Posti Group faced a very difficult business environment at the start of the year, and the second quarter failed to bring the hoped-for improvement in the market situation. Economic growth in Finland has been non-existent, which has been reflected in a continued decline in the market for logistics services. The development of consumer purchasing power has been subdued and the digitization of communication has reduced mail volumes, particularly with respect to 1st class letters. The development of the Group's net sales and result was unsatisfactory under difficult circumstances in the second quarter.

However, there were also some positives during the period. In Postal Services and Parcel and Logistics Services, the operating result before non-recurring items for January-June improved year-on-year. Another positive signal was the substantial growth in the volume of parcel services. 

The situation in the Group's Russian operations weakened significantly in the second quarter as a result of the Russian economic crisis and a decrease in consumer purchasing power. After the sharp peak in end consumption at the end of last year, volumes in warehouse logistics decreased during the spring. In our estimate, a recovery in demand may not be seen in 2015. 

As part of Posti Group's strategy, the sale of the Scandinavian road transport business and international freight business in Finland was successfully completed. The net sales of Parcel and Logistics Services decreased as a result of the transaction.

In OpusCapita, which specialises in automation and software services for financial management, cloud services and e-invoicing services saw positive growth. The company is making a strong investment in new growth businesses. Profitability was also eroded by declining volumes in the traditional printing business in all countries of operation. OpusCapita is an important part of Posti Group and subject to positive growth expectations. 

Posti Group's operating result in January-June improved significantly from the corresponding period in 2014 and amounted to EUR 48.4 million. The result includes a non-recurring profit on a transaction concluded by Posti on the sale and leaseback of five properties. 

Posti is currently undergoing a significant multi-year structural transformation. Restructuring measures implemented in summer 2015 included rearranging the domestic terminal network and launching the renewal of Posti's retail network. It will take some time before the impacts of these changes and other restructuring measures are reflected in the result.

In June, we announced our new strategy, with the primary objectives of renewing Posti to make it a customer-oriented first-class service company and pursuing profitable growth in new services. As society becomes increasingly digital and traditional mail delivery diminishes, Posti faces a turning point at which the Finnish Postal Act must be amended to ensure the availability of postal services throughout the country. 

We have systematically improved the efficiency of our operations. We are improving the customer experience, productivity and our competitiveness by taking advantage of new technology. The growth of e-commerce and digitization also offer Posti new growth opportunities. We will pursue synergies by focusing on home services, meal deliveries and food logistics, which allow us to leverage Posti's nationwide distribution network."
 

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 Q3/2015, November 2

IMAGES AND LOGOS
www.posti.com/newsroom
 

Posti Group is your first choice in 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-Q2-2015.pdf