TNT 2Q Results: Focus On Costs And Cash Pays Off - July 27, 2009 [Press Release.] Highlights:
Group
• Recessionary business environment persists in Q2
• Strong cash flow resulting from ongoing focus on working capital and tax
• Interim 2009 dividend of € 0.18 per share, at choice of shareholder in cash or stock
Express
• Volume decline stable throughout Q2
• Strong cost savings performance at € 135 million, full year target increased
• Underlying* operating income of € 89 million (€ 153 million in Q2 2008)
• Reported operating income at € 29 million due to one-offs, Easter and foreign exchange impact
Mail
• Revenue in line with last year
• Addressed mail volume decline in the Netherlands 6%, excluding various one-off mailings
• Operating income of € 150 million (€ 173 million in Q2 2008)
CEO Peter Bakker comments:
“The trading environment continued to be tough this quarter. In response, TNT’s management teams have once again significantly reduced costs without jeopardising our service levels. The underlying performance in our businesses clearly improved over Q1 this year. Our focus on cash has resulted in a strong free cash flow over the first six months this year. Our announcement today of a € 0.18 dividend per share, optional in cash or shares, is a sign of confidence in our operational performance.
Through the quarter, the rate of decline of Express volumes has been stable, with a small upturn in the last weeks of June. The decline of Express volumes seems to be bottoming out. The excellent implementation of cost savings measures has allowed us to increase our savings target for the full year. In the summer period, however, there remains the possibility of longer holiday stops in production lines of our customers, which may impact volumes.
In Mail, the operating result was impacted by lower volumes, higher costs of pensions and one-off costs in EMN. After the union members had voted down the CLA agreement for TNT Post in the Netherlands, we have launched significant restructuring plans. We continue, however, to aim to develop a renewed discussion with the unions to explore wage-based alternatives.
Going forward we assume continuation of tough trading conditions to persist in the second half of the year, as early signs pointing towards improvements in the general economic climate in the second half of 2009 are still too uncertain to indicate a positive trend line development.”
Itella Interim Report for January–June 2009 - July 23, 2009 [Press Release.]Highlights: • Itella Group's net sales fell by 0.8 percent to EUR 916.2 million during the first half of 2009 (EUR 923.5 in January-June 2008). Excluding the impact of acquisitions, net sales fell by 9.4 percent. • Consolidated EBIT decreased by 36.9 percent to EUR 27.7 million (EUR 43.9 million), representing 3.0 percent (4.8 percent) of net sales. EBIT improved in Itella Information but shrank in Itella Mail Communication and Itella Logistics.
The volumes of mail deliveries fell significantly. The volume decline was heaviest in first class letters (-9 percent), addressed direct marketing (-16 percent) and parcels (-10 percent).
Jukka Alho, President and CEO:? The economic recession has had the strongest impact on the business of Itella Logistics which is sensitive to economic fluctuations. Itella Mail Communication succeeded in compensating the decline in volumes through measures that improve productivity. Itella Information even improved its performance.?Market outlook for the key customer industries has a substantial impact on Itella's net sales and performance. In this respect, no material changes can be expected in the near future. Therefore, Itella's net sales for the full year are predicted to remain below last year's level. "
China Postal Revenue Up 13 percent to $11.2 Bln In First Half of 2009 - July 6, 2009 [Xinhua.]China's postal revenue rose 13.1 percent year on year in the first half of this year to an estimated 76.5 billion yuan (11.2 billion U.S. dollars), according to China's State Post Bureau.
"The country's postal industry had gradually waited out the adverse effects of the financial turmoil and economic slowdown, as the industry's revenues have begun to climb since the beginning of this year," said Ma Junsheng, director of China's State Post Bureau, on Monday.
Business revenues from express mail service increased 9.7 percent year on year to an estimated 21.25 billion yuan in the first six months.
China's postal revenue rose to 140.7 billion yuan in 2008, up 15.9 percent from 2007.
Ma said there were about 40,000 post offices in rural China, but farmers in some out-of-the way towns and villages still had no access to mail service, adding that the country was endeavoring to help all farmers enjoy mail services in coming years.
He said last month during an online interview on www.gov.cn that the nation would build more than 6,000 post offices in its vast rural areas over the next three years.
It has been a very challenging year for the postal market. Recession and e-substitution havehit mail volumes particularly hard and the annual rate of decline has accelerated to nearly10% i the quarter to March 2009.
The key recommendations made by the Hooper report, which was published last December,were promptly accepted by the Government and are incorporated in the Postal ServicesBill which is now being considered by Parliament. The measures that Richard Hooper andhis team recommended to secure the universal service have still greater significance andurgency given the pace at which Royal Mails letters business is contracting.
We welcomed the reports assessment of Royal Mail which mirrored our own judgement that the situation was no longer tenable without action to address its massive pensiondeficit, an injection of extra capital and a radical restructuring of the letters business.Another of its recommendations is to subsume Postcomms regulatory duties into Ofcom,the communications regulator.
The future may look challenging, but there are still real opportunities for the postalmarket. Our annual survey of business users of mail services showed that more than half ofrespondents regarded mail as a core activity of their business and almost one in three saidmail was critical for communication with their customers. The reason so much direct mailpours through the nations letterboxes is because the senders know that mail is more likelyto deliver a response than other media. People regard a letter as a personal communication.Its not caught by spam filters. If its on the doormat, they will pick it up and probably read it.The same cannot be said of e-mail.One way to secure a healthy mail market is to combine the speed and convenience ofelectronic media with the sales effectiveness of a letter to reach customers. Its alreadypossible to write a letter on your computer, send it electronically to a printer near itsdestination where it is printed, and have it enveloped and delivered from there. But firstand foremost it is essential that the modernisation of Royal Mail should be completedwithout further delay because without an efficient and innovative Royal Mail the prospectsfor the mail market as a whole will be bleak.
While we welcome the Governments decision to implement fully the recommendationsof the Hooper Report, we are concerned at the market uncertainty that the present risk ofdelay is causing. The planned reform of postal regulation and the initiatives to find a strategicpartner for Royal Mail have heightened uncertainty at the very time when certainty is neededto encourage new operators to enter the competitive mail market and for existing operatorsto expand their operations.
If the Postal Services Bill becomes law later this year, Postcomm will cease to exist. So inthis last annual report, it is appropriate to look back at what we have tried to do, and to lookforward to some of the challenges facing Ofcom.
Postcomm has been accused by some of being too hard on Royal Mail and of putting moreemphasis on the introduction of competition than we have on safeguarding the universalpostal service. Both these criticisms are misplaced.
As a monopoly, Royal Mail has been used to getting its own way. Without the stimulus ofcompetition it was (and still is) inefficient, it pays higher wages, salaries and bonuses thanits UK competitors and uses outdated practices compared with the best European operators.However, in the face of competition it has started to raise its game and has shown that it canmeet challenging service and quality standards.
The access competition that has developed in the UK where major bulk mailers and mailoperators collect, sort and trunk letters and pay Royal Mail a fee to deliver them to the letterbox accounted for 450 million items a month in December 2008 and is still growing. ButRoyal Mail is still responsible for more than 98% o mail deliveries in the UK and the financialreturns it makes on access mail are similar to those from bulk mail that it delivers end-to-end.At times it has been difficult for Postcomm to balance the often competing interests ofRoyal Mail and its competitors whilst also seeking to protect the customer. Even the bestregulators do not escape criticism, but we make no apology for offering mail customerschoice. However, one of our regrets is that a meaningful end-to-end market where operatorsduplicate Royal Mails operation collecting, sorting and delivering mail has not developed.In part this is because Royal Mail is exempt from adding VAT currently 15% to its prices.This is a major constraint to other operators who must make this charge. VAT policy is notsomething we can change it falls within the remit of Her Majestys Revenue and Customsand the European Commission.
The development of a competitive market has also not been helped by Royal Mailsunwillingness to provide more transparent costing information a practice which I thinkhas been to Royal Mails own disadvantage in that it has lead to some of its prices beingmisaligned to its costs.
We were intending to address this issue head-on as part of the first consultation of our post-2010 price control. That consultation was overtaken by the Hooper report. The work we havedone will now be passed to Ofcom who we hope will take up the challenge of ensuring propercost transparency from Royal Mail.
During the year, Lucy Scott-Moncrieff, an experienced solicitor, joined us as a Commissioner.I would like to thank her for her already valuable contributions.
Our former chief executive and Commissioner, Sarah Chambers, left Postcomm lastSeptember at the end of her four-year term to rejoin her former department, now theDepartment for Business, Innovation and Skills. She guided Postcomm through a challengingtime and had a very positive impact on postal regulation in the UK. We wish her well in hercareer post-Postcomm.
Sarahs successor, Tim Brown, joins us with considerable industry experience with RoyalMail, and more recently with Deutsche Post. This experience and his fresh perspective areproving invaluable at this critical time.
Lastly, on behalf of myself and my fellow Commissioners, I would like to thank all the staff atPostcomm. A small team, they continue to work diligently and professionally in this difficulttime of transition. The transfer of Postcomms functions to Ofcom will provide them withanother challenge, but my own experience of working with them makes me very confidentthat they will be more than able to handle it.
MaltaPost Interim Results - June 2, 2009 [Press Release.]For the six months ended 31 March 2009 MaltaPost p.l.c. registered a profit before taxation of.92m euro as compared to 2.60m euro for the same period last year. This represents a decrease of 26% over the six months ended 31 March 2008.
Last year’s profitability had been enhanced by two specific non-recurring events: the increased volumes generated during the National General Elections and the issue of philatelic material commemorating the introduction of the euro.
The main factors influencing this period’s performance are set out below:
• Turnover decreased by 4% over the same period last year from 10.96m euro to 10.50m euro. This was principally due to a decrease in local mail volumes and philatelic material partly offset by an increase in inbound mail;
• The increase in Operating Costs is mainly attributed to an increase in foreign letter mail volumes together with increases in indirect costs such as water and?electricity charges;
• A one-off credit was registered in 2008 resulting from the release of a provision that was no longer required following the reversion of a number of?employees to Government employment;
• Shareholders’ funds increased by 11.3% to 10.01m euro during the six month period;
• In March 2009, the Company paid a net dividend of €0.04 per share. A number of shareholders opted for the scrip dividend, as a result of which the share capital of the Company was increased by 282k euro to 7.28m euro1s.
The competitive environment and outlook for the Company continues to be determined, to a substantial degree by the effect that e-substitution is having on traditional mail volumes and the impact on its main source of revenue. The future of the traditional mail market is being substituted by increases in international inbound mail as a result of growth in internet mail-order. It is the intention of the Company to further diversify the business into low cost financial services and back office processes.
The Board has cautiously taken into consideration the present market situation when setting this year’s targets and to date the directors do not envisage any occurrence which could prevent the Company from achieving these. Furthermore, it believes that the Company continues to have a sound balance sheet which enables it to move forward with its plans from a position of strength.
Canada Post Annual Results - May 26, 2009 Canada Post Group of Companies:
Canada Post Group of Companies:
• Consolidated revenue from operations reached $7,729 million, an increase of $255 million, or 3 percent from 2007. • Consolidated net income for the fiscal period ended December 31, 2008 was $90 million, an increase of 36 million from the previous year. • Consolidated net income before taxes was $161 million, an increase of $1 million from 2007. • Consolidated cost of operations for fiscal 2008 totalled $7,594 million, an increase of $248 million over the $7,346 million recorded in the previous year. • Return on equity ratio was 6.1 percent, up from 3.8 percent in 2007. • The Canada Post Group processed 11.8 billion pieces in 2008. • With 72,000 employees, The Canada Post Group is one of the largest employers in Canada. • The Canada Post Group spends more than $2.8 billion annually on goods and services, thereby supporting an additional 30,000 jobs.
Segmented Highlights Canada Post The Canada Post segment represents approximately 80 percent of the Corporation’s consolidated revenue. • Canada Post's revenue from operations increased from $5,955 million in 2007 to $6,108 million in 2008. • Revenue from Transaction Mail totalled $3,234 million; Parcels revenue totalled $1,311 million; Direct Marketing revenue was $1,431 million. • Canada Post's income before taxes was $66 million for 2008, a decrease of $12 million from the previous year. • Canada Post paid a dividend of $22 million to the Government of Canada in 2008. • Lettermail on-time service performance met the corporate target of 96 percent. • Transaction mail volumes decreased by 2 percent in 2008. • Parcels volumes decreased by 8.3 percent in 2008. • Direct Marketing volumes rose by 0.9 percent in 2008. • Canada Post reduced planned expenditures by $150 million. This was on top of already budgeted costs savings of $100 million, of which $90 million was achieved. • Canada Post was named as one of the Top 100 Employers in Canada for a third consecutive year in Maclean’s magazine. • In 2008 Canada Post raised more than $1 million for mental health, the company’s cause of choice. The corporation also supports literacy, the Canada Post Canadian Freestyle Ski and the United Way.
Purolator • Purolator generated revenue of $1,563 million in 2008, an increase of $115 million over the $1,448 million achieved in 2007.
Logistics • The Logistics segment accounts for revenue of $156 million, which is $10 million better than the previous year.
Swiss Post: 1Q ’09 Group Result Down - May 26, 2009 [Press Release.]In the first quarter of 2009, Swiss Post generated Group profit of CHF 198 million despite the difficult economic climate. However, this result is CHF30million down on the first quarter of the previous year.
In the first three months of 2009, Swiss Post generated Group profit of CHF 198 million (2008: CHF 228 million). This represents a fall of 13 percent. The drop in profit is attributable to pay rises, writedowns on financial investments necessitated by the situation on the financial market during the quarter under review, as well as the decline in letter volumes. The number of addressed letters dropped by 3.1 percent, which is significantly more than in the same period last year.
The Economic Downturn Is Affecting Norway Post's Results - May 21, 2009 [Press Release.]Norway Post's earnings (EBIT) came to NOK 98 million in the first quarter. The economic downturn led to a fall in the volumes of mail and goods, while efficiency measures and the Easter effect (more workdays in March) had a positive impact on the results compared to last year.
The economic downturn has affected the demand for the Group's services and the capacity utilisation in all segments: mail, logistics and IT. The first quarter operating revenues came to NOK 6,932 million, compared to NOK 6,851 million in 2008. The earnings before non-recurring items came to NOK 90 million, as against NOK 74 million for the same period in 2008.
In addition to the Easter effect, the operating revenues were positively affected compared to 2008 by last year's acquisitions and expansions in Sweden and Denmark. The earnings (EBIT) were also improved by efficiency measures implemented through the Spinnaker programme, additional adaptations to the operations due to the economic downturn, and by the agreement with DnBNOR regarding the transfer of 170 financial advisers.
As at 30 April, which includes Easter and provides a better basis for comparison with last year, the operating revenues amounted to NOK 9,058 million, a reduction of NOK 331 million compared to the same period the year before. The earnings before non-recurring items came to NOK 41 million as at 30 April, NOK 167 million less than on the same date in 2008.
«Mail and logistics are cyclically sensitive operations and the international economic downturn is becoming directly apparent in lower volumes and numbers of assignments,» says Dag Mejdell, the CEO of Norway Post.
An economic downturn and structural challenges?In the Mail Segment, the volume of letters sent in Norway fell by 14 per cent compared to the first quarter of last year, with mail advertising decreasing by 25 per cent. The number of customers using the post office network declined by seven per cent and the number of banking transactions dropped by 10 per cent compared to the same period in 2008.
Physical mail is affected structurally by technological developments involving a transition to electronic solutions such as e-mail, e-invoices and online banking. These are permanent changes in customer needs. In order to compensate for declining volumes, Norway Post implemented Spinnaker, a profitability programme, in 2008. This programme produced good effects in the first quarter.
«The Mail Segment is facing both short- and long-term challenges. In the short term, we are adapting our capacity and operational system to the lower demand in the market. In the long term, we must continue to restructure our operations in order to meet new customer needs with competitive offers and profitable operations,» says Mr Mejdell.
The Norwegian State will pay for unprofitable services?In its revised national budget, the government has proposed granting NOK 518 million as payment for unprofitable postal and banking services. This is payment for the delivery obligations that Norway Post has to carry out according to its licence but which do not make a profit for the company.
Business Post Results 2008-09 - May 21, 2009 [Press Release.] Highlights:?
• Group revenues up 7.6% to £386m (2008: £359m)
• UK Mail revenues up 19.8% to £164m (2008: £137m)
• Profit before tax (before exceptional items) up 23.2% to £17.5m (2008: £14.2m)
• Pre-tax exceptional charges of £1.1m (2008: £nil)
• Profit before tax up 15.5% to £16.4m (2008: £14.2m)
• Proposed final dividend of 10.8p per share (2008: 10.8p)
• Strong balance sheet with net cash balances at year end of £9.5m (2008: £6.2m)
Guy Buswell, Chief Executive of Business Post, said:
“We have again made good progress in the year, despite the challenging trading environment in the second half. We have reacted quickly to the changing conditions, reducing our cost base further which helped us to deliver another significant improvement in financial performance.
UK Mail achieved good revenue and profit growth, and further increased its market share. Parcels profits increased with reduced operating costs more than offsetting the impact of lower revenues, and here also we grew market share. Specialist Services also performed well.
Over the past three years, Business Post’s performance has been transformed and we are now the UK’s leading independent integrated postal group. Our aim now is to consolidate this position, using our highly efficient and integrated network to drive profitable revenue growth.
Trading in the early weeks of the new financial year has been in line with management expectations. Whilst there have been some tentative signs of an improvement in market conditions, it is too early to discern any sustainable trend. However, our business model and strategy, underpinned by a strong balance sheet, are proving resilient in the current economic climate. We are encouraged by our performance to date and are confident of the Group’s ability to continue to outperform the markets in which we operate.”
Austrian Post – 1Q 2009 Results: Difficult Market Environment In 2009 Due To Economic Recession - May 19, 2009 [Press Release.] Highlights:
- Difficult market environment in the recessionary year 2009;Deteriorating economic climate negatively impacts letter mail and parcel volumes - Q1 2009 featured two fewer working days than Q1 2008 - Group revenue down 2.4 percent, or EUR 14.7m o Mail (-4.6 percent): Decline in daily business mail and direct mail items o Parcel & Logistics (-0.1 percent): On balance stable development based on core business in Austria and Germany and consolidation effects o Branch Network ( 5.6 percent): Positive development in sales of retail products and financial services - Measures initiated to improve efficiency and reduce costs; positive effects expected in upcoming quarters - Earnings before interest and tax decrease 4.3 percent, to EUR 47.8m - Balance sheet and cash flow o Free cash flow before financial investments in securities at EUR 22.9m o Cash and cash equivalents and financial investments in securities rise by EUR 15.4m in the first quarter, to EUR 356.0m
Outlook for 2009
The first months of 2009 have already demonstrated that a more difficult economic environment is to be expected for the year as a whole than originally forecast at the beginning of the year. Economic expectations for the markets in which Austrian Post operates have been continually revised downwards. In December 2008, the Austrian Institute of Economic Studies (WIFO) and Institute for Advanced Studies (IHS) predicted negative growth rates in Austria of -0.5 percent and -0.1 percent Austria respectively. In April 2009, the EU Commission already forecast that the Austrian economy would contract by -4.0 percent in 2009. Austrian Post will not be immune against the consequences of this immense economic downswing. We expect that the deteriorating economic situation will continue to have a negative effect on letter mail, parcel delivery and direct mail volumes. ??We anticipate that the trends manifested in the first quarter will continue for the time being. In the Mail Division, recessionary tendencies will continue to have a negative impact on business mail and direct mail volumes. In the Parcel & Logistics Division, the focus on selected branches and the positive impetus for growth provided by Internet-based businesses will contribute towards reducing the consequences of the economic downturn compared to other logistics segments. Positive effects are anticipated as a result of Austrian Posts growing B2C parcel business in Austria during the second half of the 2009 financial year. The Branch Network Division is also expected to show a stable development.
Based on the uncertain economic situation, Austrian Post is not in a position to seriously provide a detailed revenue and earnings outlook for 2009 at this time. As already predicted and demonstrated by first quarter developments, revenue will be negatively impacted by the unfavourable economic situation and the accompanying decline in letter mail and parcel delivery volumes. For this reason, the main goal of Austrian Posts management team is to do its best to counteract the impending revenue decline by implementing operational cost savings and thereby keep earnings reductions at a minimum. This approach involves implementing appropriate measures to carry out a sales offensive and enhance efficiency. Austrian Post is more intensively promoting the increased use of direct mailings in the communications mix of companies as well as new services such as mailroom services or document printing.
Moreover, efficiency improvements and rationalisation measures are essential in order to compensate for falling revenue by means of cost reductions. In an initial step, the Management Board of Austrian Post has launched a programme to cut the cost of materials and all operating expenses (excluding staff costs) in the Group by about EUR 30m over the next 12 months. In addition, planned capital expenditure (CAPEX) will be cut back by 20 percent in 2009, to about EUR 80m.
Efficiency improvements are also planned for operational processes. Austrian Post aims to have a cost structure in its letter mail delivery services which is appropriate for a competitive environment. In the Branch Network Division Austrian Post will start replacing 300 unprofitable company-owned branches with partner-operated postal service points in the second half of 2009, which will also have a positive effect on earnings.
