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Posti Group's net sales decreased - a positive start to the year in Postal Services

29.04.2016

POSTI GROUP CORPORATION INTERIM REPORT, APRIL 29, 2016 AT 10:00 A.M. (EET)

 

Posti Group Corporation Interim Report Q1/2016

  

 Key figures of Posti Group 1-3 1-3 1-12
  2016 2015 2015
       
Net sales, EUR million 390.6 435.9 1,650.3
Operating result (non-IFRS), EUR million* 15.0 20.6 48.7
  Operating result (non-IFRS), %* 3.8 4.7 2.9
Operating result (EBIT), EUR million 4.7 20.5 55.9
  Operating result (EBIT), % 1.2 4.7 3.4
Result before taxes, EUR million 3.5 21.3 43.3
Result for the period, EUR million 3.4 15.9 36.0
Cash flow from operating activities 29.1 35.2 81.9
  Return on equity (12 months), % 3.9 1.2 6.1
  Return on invested capital (12 months), % 4.2 3.1 6.3
  Equity ratio, % 46.5 46.6 47.8
  Gearing, % -14.8 11.7 -10.5
Gross capital expenditure, EUR million 11.4 16.5 60.6
Average number of employees 20,577 22,579 22,219
Dividend, EUR million     18.0
       
*) Non-IFRS = excluding non-recurring items      

  

Heikki Malinen, President and CEO:

"In the first quarter, Posti actively continued its renewal and efficiency improvement measures as digitization is reducing traditional mail delivery volumes and changing customer behavior. The EUR 75 million savings target of the Group's performance improvement program 2015-2016 has now been achieved. The cost reductions partly compensated for the decrease in net sales in the first quarter. Unfortunately, it was also necessary to target personnel with cost reduction measures. The number of redundancies was, however, significantly reduced through Posti's support program.

Posti Group's operating result before non-recurring items was satisfactory in January-March, but declined to EUR 15.0 year-on-year. The positive aspect was the improved result of Postal Services in spite of lower volume. The factors affecting the business group's result in January-March included efficiency improvement measures, cost cuts and price increases, as well as Easter mailing volume falling in the first quarter. New growth has been achieved in forwarding shipments from Chinese online stores to Russia. 

The upcoming reform of the Postal Act will completely deregulate the delivery of letter mail in Finland by eliminating requirements concerning postal licenses and delivery days from other operators. While we welcome competition in the delivery of letters, the relevant regulatory provisions must be fair. Under current regulations, Posti is subject to tougher delivery obligations than other operators. For this reason, it is important that the regulations pertaining to Posti's universal service obligation are eased by the reform of the Postal Act. 

For the Parcel and Logistics Services business group, the first quarter included significant successes in spite of the result showing a loss due to upfront investments, intensifying competition and the challenging market situation. Posti won several major accounts in the first quarter, involving various logistics services ranging from transport to full-service supply chain solutions. The new contracts strengthen Posti's position as the largest logistics company in Finland. 

In March, Posti signed a significant agreement on joining the DHL partner network, giving Posti's e-commerce customers access to a parcel delivery network covering 16 countries and 43,000 service points. At the same time, Posti will open a network of 1,200 pickup points in the Baltic countries. These concrete measures give Finnish online stores better opportunities to sell their products in the international market. 

Itella Russia's net sales and operating result continued to be weighed down by the weak ruble, the economic climate in Russia and weaker demand for logistics services. The company has sought to improve profitability through significant cost cuts. While the Russian economy has contracted, the consumer e-commerce market in Russia is seeing substantial growth. In March, Itella Russia acquired the Russian courier company MaxiPost to expand its services to include parcel delivery in Russia. MaxiPost delivered more than a million parcels last year. 

OpusCapita, which provides automation and software solutions for financial management, continued to invest in its new strategy as well as new e-invoicing services and cloud services, which was reflected in its result for the first quarter. In addition, the demand for paper-based products continued to decline due to digitization, and this decline in volume weighed down on the first quarter's operating result. 

The business environment will remain very challenging in 2016 due to the subdued economic development in Finland. Transport volumes in heavy traffic have decreased in Finland for 47 consecutive months, starting from May 2012. We maintain our estimate, according to which comparable net sales in euros for 2016 are expected to decrease compared to 2015, and Posti's result before non-recurring items is expected to remain at the previous year's level. No quick turnaround is expected in the Russian economy and the development of the ruble exchange rate, which means that Itella Russia's business continues to involve significant uncertainty factors. Posti is in the midst of a major industry transformation. We are resolutely implementing our new strategy that will improve the Group's profitability and enable investments in future growth areas."

 

 

APPENDICES
Posti Group's Interim Report in full (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.posti.com/financials


FINANCIAL CALENDAR IN 2016
January-June: July 18, 2016
January-September: October 31, 2016


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 nine countries. Our net sales in 2015 amounted to EUR 1.65 billion. We employ approximately 22,000 professionals who serve our customers in Finland under the name Posti and in other countries under the name Itella. All of our services in Finland are carbon neutral. www.posti.com.

Posti-Group-Corporation-Interim-Report-Q1-2016.pdf