Norway Post - Quarterly report. 4 th quarter 2010 Preliminary figures for 2010

Transcription

1 Norway Post - Quarterly report 4 th quarter 2010 Preliminary figures for /02/2010

2 Financial highlights Operating revenues from continued operations in 2010 amounted to MNOK , a reduction of MNOK 163 (0.7%) compared with previous year. The reduction is due to falling volumes in the Mail segment, as well as the transport industry strike in May/June and the continued economic downturn which negatively affected the Logistics operations in the beginning of the year The revenue development in the Logistic segment turned around in the second half of Revenues for the Group in the fourth quarter were MNOK 230 (4.0%) higher than the previous year Earnings before non-recurring items and write-downs from continued operations amounted to MNOK 943 in 2010, an improvement of MNOK 172 (22%) compared with previous year, mainly due to the effects of cost-cutting measures EBIT before non-recurring items and write downs amounted to MNOK 299 in the fourth quarter, an improvement of MNOK 26 from the same period in 2009 The 12-month return on invested capital before nonrecurring items and write-downs (ROIC) from continued operations was 15.8% compared with 12.4% in 2009 The groups efficiency programme Spinnaker has resulted in a reduction in costs of NOK 1,9 billion since There is an ongoing effort to adjust costs and improve margins EBIT in 2010 was positively affected by the non-recurring effect from taking MNOK 759 to income in connection with the transition to a new early retirement (AFP) scheme as of , as well as gains on the sale of property 2

3 Important events in 2010 ErgoGroup AS and EDB Business Partner ASA entered into a merger agreement in June 2010 to form a leading Nordic IT company. The merger was carried out in October, but implemented with effect for accounting purposes from 30 September. Norway Post s ownership share of the new company, EDB ErgoGroup ASA, was 47% at the time of the merger. The shareholding was reduced to 40% through the sale of shares in November 2010 Norway Posts ownership interest in EDB ErgoGroup ASA is accounted for as an associated company, and the share of the profit and loss is classified under operations. The share of loss after taxes for the fourth quarter amounts to MNOK -30 In 2010 the new South-East Norway terminal took over letter production from the letter centre in Oslo. During 2011 it will also take over letter production from the terminals in Drammen and Hamar The City of Oslo approved the development plan for the terminal area at Alnabru in This enables the Group to plan a future oriented, efficient and environmentallyfriendly center for its logistics operations in Norway Post and Bring Bring Logistics Solutions opened a new logistic center in 2010 at Berger outside of Oslo. The warehouse has space for pallets and will replace five smaller warehouses in the South-East Norway Area Delivery quality for A mail delivered overnight was 83.5% in 2010 (84% in fourth quarter of 2010), and was influenced by a harsh winter, ash clouds, airports closed at night in parts of the year and relocation to the South-East Norway terminal. Norway Post met the other five of six requirements by a good margin in

4 Norway Post launches a digital mail box For more than 360 years Norway Post has been a trusted third party for the distribution of letters During the spring, Norway Post will launch a new digital mail box, a supplement to the traditional, physical mail box It is not easy being a consumer today, with several web-sites, user identities and passwords. Norway Post will gather the communication in one digital mail box Norway Post s new digital mail box will make it easy to send, receive, process and file important mail 4

5 Yes please, both! Ordinary physical mail has been reduced over the past ten years as a result of digitalisation Norway Post s digital initiative will have an impact on ordinary mail, but digital mail is here to stay 5

6 Bring acquires Coldspeds cold storage operations Bring Frigo has acquired Coldspeds cold storage operations effective 1 April The acquisition consists of the cold storage plants in Örebro, Jordbro, Kalmar, Kristianstad, Eslöv and Malmö In 2010 the cold storage operations had revenues of MSEK 84 and 57 employees Through the acquisition of Coldspeds cold storage operations, Bring will strengthen its position as a complete supplier of logistics for the food industry The acquisition will increases its geographical presence so that Bring comes closer to the customers production plants. In addition, it effectively connects storage and transport, and offers the customer one contact point for all logistics related to the food industry 6

7 Mill.units Banking services requirement can be completely or partly removed according to an independent review by Copenhagen Economics ,7 87, : -90 % 80 65, ,5 46,7 37, ,2 25,6 23,7 21,3 18,4 16,5 14,2 12,3 11,2 10, On behalf of the Ministry of Transport and Communication, Copenhagen Economics has assesed the need for the statutory requirment to offer banking services throughout the sales network, and the effect on government procurements. The report, published 7 February 2011 concluded: The statutory requirement to offer banking services throughout the sales network can be completely or partly removed Only about 0.5% of the population needs banking services throughout Norway Posts sales network The rural delivery service will be able to meet future needs Limited to the rural delivery service and provided further conversion from post offices to Post in Shops, the government will be able to save about MNOK

8 The Norway Post Group in development Mrd NOK External revenue per segment ,5 35,0 32,5 30,0 27,5 25,0 IT 22,5 20,0 17,5 15,0 Logistics 57% 12,5 10,0 7,5 5,0 Mail 43% 2,5 0, IT: Posten owns 40 % of EDB ErgoGroup ASA Revenue: MNOK (100%) FTE: Logistics: Revenue: MNOK FTE: Mail: Revenue: MNOK FTE: /02/2011 8

9 Operating revenues per quarter Average annual revenue growth of -4.4% (Q Q4 2010) Operating revenues per quarter in MNOK 9

10 Operating revenues from foreign subsidiaries Operating revenues in MNOK % 0% +4 % % % % +16% Operating revenues from foreign subsidiaries decreased by 4% from 2009 to 2010, and accounted for 26.5% of the group s revenues, approximately the same level as the previous year From 2003 until 2010, Norway Post s foreign continued operations had an average increase in operating revenues of 24.2% 10

11 EBIT before non-recurring items and write-downs per quarter EBIT before non-recurring items and write-downs per quarter in MNOK 11

12 Profit and Loss Q Q Change MNOK Change Operating revenues EBITDA EBIT before non-recurring items and write-downs Write-downs Non-recurring losses / (gains) EBIT before share of net income(losses) of associated companies Share of net income(losses) of associated companies EBIT Net financial items Income before taxes from continued operations Net income discontinued operations Net income (loss)

13 Key figures Investments in continued operations in 2010 amounted to MNOK 667, a decrease of MNOK 430 compared with previous year related to the completion of the new South-East Norway terminal MNOK Total capital Equity Interest-bearing liabilities As of , Norway Post s liquidity reserve, consisting of market investments and unused drawing rights, amounted to MNOK compared with MNOK previous year Equity ratio (%) Debt ratio (net) ROIC (%) before non-recurring items and write-downs* EBIT-margin before non-recurring items and write-downs (%) * Moving 12 month average

14 Number of Employees Employees Group Acquisitions/discontinued operations * Reduction of employees - continued operations Group * Including ErgoGroup

15 Segment structure for Norway Post Group group mail logistics 15

16 External operating revenues per segment Change in MNOK and % Share of external revenues in % 1.3% % 56 % % 44 % -3.1% Mail Logistics 16

17 Segment mail logistics Letter mail Banking services Dialog services mail 17

18 Volume development mail logistics Mail products % change pa Mail Norway Post Group * Mail parent company A and B mail (parent company) Direct Mail** (parent company) * Volumes for 2009 included Bring Citymail Denmark which was closed down as of The change in volume from 2009 to 2010 excluding Bring Citymail Denmark was +0,9% ** Addressed and unaddressed mail advertising Unaddressed mail advertising accounted for 52.3% of the parent company mail volumes compared with 49.6% in

19 Key figures post logistics The development in operating revenues was negatively affected by electronic substitution, which was reinforced by the economic downturn. Total A and B mail volume in the parent company in 2010 was 7.2% lower than previous year. The decline in volumes was smaller for B mail than for A mail. The fall in volumes was partly compensated for by an increase in volumes for unaddressed advertising (increase of 5.7% from 2009) The results were positively affected by comprehensive cost-cutting measures Bring Citymail Sweden had an increase in volume of 6% from 2009, and new customer contracts and comprehensive measures to improve profitability had positive results The last conversion of 124 post offices to Post in Shop was carried out November 1, The remaining post offices will be modernized over a three year period to meet changing customer s needs Norway Post conducted a competitive bid for the Post in Shops agreements for the coming three year period. NorgesGruppen and Coop will have the majority of Post in Shops. The agreements are valid from July 1, 2011 to July 1, 2014 with an option to extend the contract period for up to two years ESA has imposed a fine of mill. EUR (approximately MNOK 101) regarding previous exclusivity clauses in the Post in Shops agreements from Norway Post disputes the ESA decision and has appealed the courts to rule the fine invalid MNOK Change Operating revenues Change % EBITDA EBITDA margin 11.8% 9.1%

20 Segment mail logistics Cargo Thermo Express Parcels Warehousing logistics 20

21 Key figures post logistics Operating revenues in 2010 were 1.0% higher than 2009 Volume reduction and pressure on prices within groupage/part load and thermo, in addition to the transport industry strike in May/June, contributed to a revenue reduction in the first half year The development turned around in the second half year, as a result of increased activity and a positive development in the market Total parcel volume was 5.2% above previous year, with a positive development in both cross-border parcel distribution and B2C parcels and domestic B2B parcels Increased online Christmas shopping contributed to record parcel volumes in both November and December The activity within Home Delivery, Supply Services and temperature-controlled transport has had a positive development in the second half of 2010 The segment s earnings were negatively affected by the volume decline in the first half of 2010, pressure on prices, start-up costs for the new warehouse at Berger, delays in rail delivery and the transport strike The negative effects were partly offset by the volume increase for parcels and express as well as cost-cutting measures Further measures are being implemented to ensure an improvement in profitability. A separate improvement programme has been initiated to increase synergies between the production of parcel products and groupage/part-load MNOK Change Operating revenues Change % EBITDA EBITDA margin 5.0% 5.8%

22 Future focus areas 2010 was characterized by low demand and strong competition. However, improvements in the Norwegian and Swedish economies gave a more positive development in the market in the second half year The Group will continue with its growth strategy and further develop and strengthen its market positions Expectations of a continued drop in volume of letters has resulted in a focus on offering services tailored to customers needs. In connection with this a new digital mail system, a supplement to the traditional, physical mail box, will be launched in 2011 There will be a strong focus on continued improvement of profitability and the implementation of efficiency programmes throughout the Group There is a focus on continuous, long-term and systematic work within the areas of HSE, environment and climate The Ministry of Transport and Communication has extended Norway Post s licence from its expiry date of to An independent external review undertaken on behalf of the Ministry of Transport and Communication concludes that Norway Post s statutory requirement to offer banking services throughout its sales network could either be removed or at least limited to rural delivery services 22