posti group corporation interim report€¦ · russia started this year. 15 posti group 652 605 0...
TRANSCRIPT
Posti Group Corporation
Interim ReportNovember 2, 2015
Contents
• July–September 2015
• January–September 2015
• Business groups
- Postal Services
- Parcel and Logistics Services
- Itella Russia
- OpusCapita
• Appendices
Posti Group2
November 2, 2015
Posti Group3
November 2, 2015
652605
0
200
400
600
800
Q1-Q3/2014 Q1-Q3/2015
160147
0
50
100
150
200
Q1-Q3/2014 Q1-Q3/2015
-7%-8%
298
209
0
100
200
300
400
Q1-Q3/2014 Q1-Q3/2015
-30%
22
24
1516171819202122232425
Q1–Q3/2014 Q1–Q3/2015
+4%
Million
units
OpusCapita’s electronic transactionsDomestic freightParcels
MagazinesNewspapersAddressed letters
Volumes Q1–Q3/2015
Million
units
2,742,54
1,62
0,0
0,5
1,0
1,5
2,0
2,5
3,0
2013 2014 Q1-Q32015
159,9173,1 179,9
191,0
141,0
0
50
100
150
200
250
2011 2012 2013 2014 Q1-Q32015
July–September
Posti Group4
November 2, 2015
Key events
November 2, 2015
Posti Group5
• Operating result before non-recurring items
improved to EUR 9.6 (6.8) million.
• Positive result in Parcel and Logistics
Services.
• Parcel services volume grew by 2.5%.
• Sales of logistics properties in Sweden and
Norway.
• Positive ruling for Posti in VAT case.
• Comparable net sales down 7.5%.
• Continued decline in mail delivery volumes.
• Logistics market continues to decline.
• High season delayed in Russia and weak in
Finland.
• Non-recurring items EUR -11.8 million,
including impairment losses in Russia and an
adjustment in gain on real estate sale.
+
–
435,1373,5
-5%
-14%
-20%
-15%
-10%
-5%
0%
0
100
200
300
400
500
Q3 2014 Q3 2015
NET SALES
MEUR Growth %
6,8
9,6
1,6 %
2,6 %
0%
1%
2%
3%
0
5
10
15
Q3 2014 Q3 2015
OPERATING RESULT before non-recurring items
MEUR Operating result %
Key figuresJuly–September 2015
Posti Group6
• Net sales down 14.2%.
• Decline in net sales due
to falling postal delivery
volumes, the weak
logistics market and the
depreciation of the ruble.
• Operating result before
non-recurring items
improved.
• Operating result was
boosted by the
divestment of
international freight
operations as well as
efficiency improvement
measures.
• Operating result
improved.
November 2, 2015
7–9/2015 7–9/2014 2014
Net sales, EUR million 373.5 435.1 1,858.7
Operating result (non-IFRS), EUR million* 9.6 6.8 50.8
Operating result (non-IFRS), %* 2.6 1.6 2.7
Operating result (EBIT), EUR million -2.2 -7.4 5.8
Operating result (EBIT), % -0.6 -1.7 0.3
Result before taxes, EUR million -7.0 -10.1 -4.6
Result for the period, EUR million -1.1 -9.1 -4.4
Return on equity (12 months), % -0.7
Return on invested capital (12 months), % 1.0
Equity ratio 45.9
Gearing, % 17.2
Gross capital expenditure, EUR million 11.8 12.0 57.5
Change in costs*Q3/2014 => Q3/2015
Posti Group7
* excluding non-recurring items
November 2, 2015
January–September
Posti Group8
November 2, 2015
Key events
November 2, 2015
Posti Group9
• The Group’s operating result % excluding non-
recurring items was nearly unchanged year-on-
year despite the decline in net sales.
• The result of Parcel and Logistics Services turned
to positive.
• Postal Services’ operating result improved.
• Parcel services volume grew by 4%.
• International freight operations were divested to
improve profitability.
• Return on investment improved to 6.3%.
• The sell and lease back of three postal centers and
one warehouse.
• Net sales down 11%, comparable net sales down
6%.
• Operating result in Russia turned losses.
• OpusCapita’s operating result before non-recurring
items declined by 33%.
• Continued decline in mail delivery volumes.
• The ruble depreciated by 47% from the previous
year.
+
–
1 367,01 215,6
-6%
-11%-15%
-10%
-5%
0%
0
500
1000
1500
Q1–Q3 2014 Q1–Q3 2015
NET SALES
MEUR Growth %
27,323,3
2,0 % 1,9 %
1%
2%
3%
0
10
20
30
Q1–Q3 2014 Q1–Q3 2015
OPERATING RESULT before non-recurring items
MEUR Operating result %
Key figures January–September 2015
Posti Group10
• Net sales down 11%.
• Decline in net sales
due to falling postal
delivery volumes, the
weak logistics market
and the depreciation
of the ruble.
• The operating result
before non-recurring
items declined.
• The operating result
was improved by non-
recurring items of
EUR +23 million.
• Operating result
improved.
November 2, 2015
1–9/2015 1–9/2014 2014
Net sales, EUR million 1,215.6 1,367.0 1,858.7
Operating result (non-IFRS), EUR million* 23.3 27.3 50.8
Operating result (non-IFRS), %* 1.9 2.0 2.7
Operating result (EBIT), EUR million 46.2 -5.1 5.8
Operating result (EBIT), % 3.8 -0.4 0.3
Result before taxes, EUR million 37.2 -12.2 -4.6
Result for the period, EUR million 31.7 -8.9 -4.4
Return on equity (12 months), % 5.9 1.4 -0.7
Return on invested capital (12 months), % 6.3 1.3 1.0
Equity ratio 48.8 47.2 45.9
Gearing, % 8.1 19.9 17.2
Gross capital expenditure, EUR million 43.7 42.9 57.5
Change in costs* Q1–Q3/2014 => Q1–Q3/2015
Posti Group11
* Before non-recurring items
November 2, 2015
Employees
Number of employees in Finland and abroad
• At the end of September,
the number of employees
stood at 21,187
(23,459).
• Of these, 16,406 (18,340)
worked in Finland.
• The Group’s personnel
expenses decreased by
nearly 11% year-on-year.
• As of September 30, 2015,
a total of 1,195 employees
have applied for the Uusi
polku (New path) program,
and 797 have been
accepted.
Posti Group12
Employees
by business group
Other operations
includes all employees
in Operations and Group
Functions.
November 2, 2015
0
5000
10000
15000
20000
25000
30000
2011 2012 2013 2014 Q1-Q32015
Othercountries
Finland
Postal Services
Parcel andLogistics Services
Itella Russia
OpusCapita
Other functions
Business groups
Posti Group13
November 2, 2015
Postal Services
* excluding non-recurring itemsPosti Group14
November 2, 2015
7–9/2015 7–9/2014 Change % 1–9/2015 1–9/2014 Change %
Net sales 161.6 168.6 -4.2% 535.0 553.5 -3.3%
Operating result
(non-IFRS)*
5.7 7.5 -24.0% 31.6 29.0 8.7%
Operating result
(EBIT)
6.4 7.5 -14.6% 32.5 29.0 11.7%
Operating result
(non-IFRS), %*
3.5% 4.4% 5.9% 5.2%
Operating result
(EBIT), %
4.0% 4.4% 6.1% 5.2%
July–September
• The decrease in net sales was attributable to a
decline in domestic delivery product volumes.
Chinese e-commerce deliveries to Russia
started this year.
• Cost adaptation measures have not fully
compensated for the decline in the volume of
delivery products. The operating result
declined.
January–September
• The operating result before non-recurring items
improved due to the strong first quarter,
improvements in operational efficiency and the
increases in postage fees that took effect at the
beginning of 2015.
• Operating result improved.
Postal Services
July–September
• The volumes of addressed letters,
newspapers and magazines decreased.
• Chinese e-commerce deliveries to
Russia started this year.
Posti Group15
652605
0
100
200
300
400
500
600
700
Addressed letters
Q1–Q3/2014 Q1–Q3/2015
Million
units
160147
0
50
100
150
200
Magazines
Q1–Q3/2014 Q1–Q3/2015
-7%
-8%
November 2, 2015
298
209
0
50
100
150
200
250
300
350
Newspapers
Q1–Q3/2014 Q1–Q3/2015
-30%
January–September
• Electronic letter volume grew by 4%.
• The volumes of unaddressed deliveries
increased significantly due to Postinen.
• The number of Netposti users increased by
7% and stood at 622,000 at the end of
September.
* excluding non-recurring items
Parcel and Logistics Services
* before non-recurring itemsPosti Group16
November 2, 2015
7–9/2015 7–9/2014 Change % 1–9/2015 1–9/2014 Change %
Net sales 137.5 174.9 -21.4% 448.1 538.4 -16.8%
Operating result
(non-IFRS)*
2.1 -6.8 - 1.0 -9.1 -
Operating result
(EBIT)
4.3 -10.7 - -10.4 -14.0 -
Operating result
(non-IFRS), %*
1.5% -3.9% 0.2% -1.7%
Operating result
(EBIT), %
3.1% -6.1% -2.3% -2.6%
July–September
• Comparable net sales decreased.
• The decline in net sales was due to falling
volumes in domestic freight, a decline in the
processing volumes and fill rates in the
warehousing business, and the general
economic situation.
• Significant improvement in the result particularly
due to the divestment of international freight
operations.
January–September
• Comparable net sales decreased.
• The operating result before non-recurring items
improved particularly due to higher demand for
parcel services as well as the effects of warehouse
consolidation and efficiency improvement
measures implemented in supply chain solutions.
Operating result improved.
Parcel and Logistics Services
July–September
• Volumes continued to fall in domestic freight,
warehouse handling volumes and fill rates
declined.
• Parcel services volume continued to grow.
Posti delivered 7.8 million parcels. Parcel
services volume grew by 2.5%.
Posti Group17
Domestic freight
0
50000
100000
150000
200000
250000
300000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2014 2015
results
* before non-recurring itemsNovember 2, 2015
22
24
1516171819202122232425
Parcels
Q1–Q3/2014 Q1–Q3/2015
+4%
January–September
• Posti delivered 24.2 million parcels. Of these
7% went through parcel points. The number
of parcels going through parcel points grew
by 48% year-on-year. Parcel services volume
grew by 4%.
• 1,406 service points at the end of September.
23 new parcel points went into service and
their number totaled 482.Million
units
Itella Russia
* before non-recurring itemsPosti Group18
November 2, 2015
7–9/2015 7–9/2014 Change % 1–9/2015 1–9/2014 Change
%
Net sales 29.3 47.2 -37.8% 88.1 131.3 -32.9%
Operating result (non-
IFRS)*
-1.4 2.7 - -4.3 0.4 -
Operating result
(EBIT)
-9.0 2.7 - -12.2 0.3 -
Operating result (non-
IFRS), %*
-4.6% 5.7% -4.8% 0.3%
Operating result
(EBIT), %
-30, 7% 5.7% -13.8% 0.2%
July–September
• Measured in local currency, net sales decreased
by 8.6% due to the weak general economic
situation and the resulting fall in warehousing,
processing and transport volumes.
• Euro-denominated net sales decreased by
37.8%.
January–September
• Operating result in Russia turned losses.
• The ruble depreciated by 47% year-on-year.
• The decrease in the operating result was due to
lower volumes as well as the development of the
ruble exchange rate and the currency basis of
lease expenses.
Itella Russia
July–September
• Warehousing, handling and transport
volumes fell.
• Operational efficiency in warehousing
was improved.
Posti Group19
90%91%91%92%93%94%93%
88%89%88%87%85%
82%83%
86%88%
94%93%92%93%92%92%90%
86%83%85%
83%81%80%
77%
82%
86%
89%
56%
61%
65%
68%70%71%
74%72%71%
73%73%
79%81%81%81%80%
76%76%
70%70%69%
72%72%
76%
73%
78%
81%82%80%
84%
89%
80%
85%
40%
50%
60%
70%
80%
90%
100%
1–
20
13
2–
20
13
3–
20
13
4–
20
13
5–
20
13
6–
20
13
7–
20
13
8–
20
13
9–
20
13
10
–2
01
3
11
–2
01
3
12
–2
01
3
1–
20
14
2–
20
14
3–
20
14
4–
20
14
5–
20
14
6–
20
14
7–
20
14
8–
20
14
9–
20
14
10
–2
01
4
11
–2
01
4
12
–2
01
4
1–
20
15
2–
20
15
3–
20
15
4–
20
15
5–
20
15
6–
20
15
7–
20
15
8–
20
15
9–
20
15
Moscow Other areas
Warehouse
fill rates
* before non-recurring itemsNovember 2, 2015
January–September
• As of September 30, 2015, the ruble had
depreciated by 47% year-on-year.
• The average warehouse fill rate in
January–September was 83% in Moscow
and 85% in other areas.
OpusCapita
* excluding non-recurring itemsPosti Group20
November 2, 2015
7–9/2015 7–9/2014 Change % 1–9/2015 1–9/2014 Change %
Net sales 60.8 60.4 0.6% 193.5 192.5 0.5%
Operating result
(non-IFRS)*
4.2 5.1 -16.5% 11.1 16.6 -33.2%
Operating result
(EBIT)
3.8 3.0 24.5% 9.7 12.7 -23.9
Operating result
(non-IFRS), %*
7.0% 8.4% 5.7% 8.6%
Operating result
(EBIT), %
6.2% 5.0% 5.0% 6.6%
July–September
• The non-IFRS operating result was reduced by a
decline in volumes in the printing business across
all countries of operation. The outsourcing business
was weakened by extra personnel expenses
related to customer projects. Investments in
development programs related to supply chain
financing solutions, robotics and internationalization
increased.
January–September
• Net sales grew slightly.
• The operating result before non-recurring
items declined. The operating result declined.
OpusCapita
July–September
• OpusCapita ceased its operations in
Slovakia on September 30, 2015.
Posti Group21
160173 180
191
141
0
50
100
150
200
250
2011 2012 2013 2014 Q1–Q3 2015
Electronic messages
November 2, 2015
January–September
• Continuous service business operations
accounted for 94% of net sales.
• Total transaction volume 400 million.
• Electronic transaction volume grew to 141
million, 35% of the total transaction volume.
• Patrik Sallner took up his post as CEO on
October 5.
Outlook for the rest of the year
Market environment
• The Group’s business is characterized by seasonality. Net sales and operating profit in the business groups are not accrued evenly over the year. In postal services and consumer parcels, the first and fourth quarters, in particular, are typically strong, while the second and third quarters are weaker in comparison.
• Uncertainty in Russia continues.
Net sales
• Comparable net sales in euros for 2015 are expected to decrease significantly compared to 2014.
Operating result (EBIT)
• The Group’s operating result before non-recurring items is expected to remain on par with the previous year if the negotiations on the collective agreement reach a conclusion without significant operational disruption. The operating result for 2015 will include significant non-recurring items.
Capital expenditure
• Capital expenditure is expected to increase from 2014.
Posti Group22
November 2, 2015
Appendices
Posti Group23
November 2, 2015
• Operating profit percentage exceeds 5%
• Gearing does not exceed 35%
• Return on invested capital is at least 10%
• More than 10% of the Group’s net sales will
come from new business areas in 2018.
Financial targets
Posti Group24
November 2, 2015
22,1 23,521,1
17,2
8,1
0
5
10
15
20
25
2011 2012 2013 2014 Q1-Q32015
-0,2
4,7
1,3 1,0
6,3
-2
0
2
4
6
8
2011 2012 2013 2014 Q1-Q32015
%%
Return on invested capitalGearing
1,6
2,7 2,6 2,7
1,9
0
1
2
3
2011 2012 2013 2014 Q1-Q32015
Operating profit percentage
%
We will create new
warehouse
and transport services in
areas such as food
logistics
We will develop digital
marketing and
information services by
leveraging Posti’s
data
We will develop Home
services including
meal delivery, care,
security and property
services
• The EUR 100 million target for the
performance improvement program for
2013–2014 was reached ahead of
schedule. The target was exceeded, with
total savings amounting to nearly EUR 140
million.
• A new performance improvement program
for 2015–2016 targeting savings of EUR 75
million. The Group expects to reach this
target ahead of schedule.
• The aims include achieving synergy
benefits through the consolidation of
production, improving the efficiency of the
ICT function, achieving savings in sourcing,
and simplifying the product portfolio.
Performance improvement programs
Posti Group25
November 2, 2015
140
42
0
20
40
60
80
100
120
140
160
2013-2014 2015-2016
EUR million
Target: 100 million
Target: 75 million
Group cost structure January–September 2015
Posti Group26
47%
9%
17%
7%
6%
4%1%
9%
Personnel expenses Subcontracting
Freight and transport Lease expenses
Depreciation IT expenses
Sales and marketing Other
November 2, 2015
Indirect costs, EUR million
386
320
0
50
100
150
200
250
300
350
400
450
Q1-Q3/2014 Q1-Q3/2015
-17%
Balance sheet
Posti Group27
November 2, 2015
EUR million
180 186
577422
135
172
483507
13751287
30.9.2014 30.9.2015
TOTAL ASSETS
Goodwill Property, plant & equipment
Other non-current assets Current assets
628 605
47,2 % 48,8 %
30.9.2014 30.9.2015
EQUITY AND EQUITY RATIO
Total equity Equity ratio (%)
Cash flow
Posti Group28
November 2, 2015
1–9/2015 1–9/2014 2014
Result for the period 31.7 -8.9 -4.4
Cash flow from operating
activities before financial items
and taxes
30.9 65.8 108.6
Cash flow from operating
activities
29.2 50.7 93.2
Cash flow from investing
activities
-42.9 -18.3 -46.3
Cash flow from financing
activities
-4.8 -19.8 -23.2
Change in cash and cash
equivalents
-18.5 12.5 23.7
Cash and cash equivalents at
the end of the review period
79.6 91.7 98.7
86119
81 93
29
-67-123
-49 -46 -43
-150
-100
-50
0
50
100
150
2011 2012 2013 2014 Q1–Q3 2015
Cash flow from investing activities, EUR million
Cash flow from operating activities, EUR million
• Cash flow from operating activities before
capital expenditure was EUR 29.2 (50.7)
million.
• Capital expenditure amounted to EUR
38.7 (32.5) million. The Group invested in
vehicles, production projects, parcel
points, terminal improvement projects and
the transport fleet.
• Proceeds from divestments totaled
EUR 135.8 million.
Net debt and the maturity structure of
loans
Maturity structure of loans and financing
arrangements, EUR million
Posti Group29
November 2, 2015
Net debt and
gearing
147
161
139
99
49
22,1 %23,5 %
21,1 %
17,2 %
8,1 %
0%
5%
10%
15%
20%
25%
0
20
40
60
80
100
120
140
160
180
2011 2012 2013 2014 Q1–Q3 2015
Net debt, EUR million Gearing (%)
150
100
150
0
20
40
60
80
100
120
140
160
2015 2016 2017 2018 2019 2020
Bonds Unused credit limits
Result announcements
in 2016
Financial statements for 2015:
February 12, 2016, at 10:00 a.m.
Q1: April 29, 2016, at 10:00 a.m.
Q2: July 18, 2016, at 10:00 a.m.
Q3: October 31, 2016, at 10:00 a.m.
Posti Group30
November 2, 2015