Posti Group Corporation Interim Report Q1/2015
- The Group’s net sales decreased by 7.3% and amounted to EUR 435.9 (470.0) million in January–March. Mail delivery volumes continued to decline substantially, while parcel services grew. In the logistics market, the situation remained weak and competition continued to be intense. Exchange rates depreciated.
- Net sales decreased by 0.8% in Postal Services, by 10.6% in Parcel and Logistics Services and by 33.2% in Itella Russia, and increased by 0.5% in OpusCapita. Measured in local currency, Itella Russia’s net sales decreased by 1.2%.
- The operating result before non-recurring items improved and amounted to EUR 20.6 (17.6) million, or 4.7% (3.7%) of net sales. Non-recurring items recognized during the period totaled EUR 0.0 (13.3) million.
- The operating result before non-recurring items improved to EUR 21.0 (16.9) million in Postal Services, to EUR 1.0 (-1.1) million in Parcel and Logistics Services, to EUR -0.9 (-2.2) million in Itella Russia, and declined to EUR 4.7 (6.8) million in OpusCapita.
- Posti Group’s operating result for the first quarter was EUR 20.5 (4.3) million, or 4.7% (0.9%) of net sales.
- Cash flow from operating activities was strong at EUR 35.2 (27.4) million.
- The name of the company was changed to Posti Group Corporation on January 1, 2015. From January 1, 2015, the names of the business groups are: Postal Services, Parcel and Logistics Services, Itella Russia and OpusCapita. Since the beginning of 2015, Posti Group Corporation’s result is reported on the basis of the new business groups.
- Ossi Pohjola was appointed acting CEO of OpusCapita Group Ltd starting from March 2, 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.
