Posti Group Corporation. Interim Report January-March 2017 April 28, 2017

Transcription

1 Interim Report January-March 217 1

2 Agenda Group s result, Q1 217 Segments - Mail, Parcel and Logistics Services - Itella Russia - OpusCapita Appendices 2

3 Operating environment - Heavy traffic volumes have been growing since April 216 Bank of Finland s estimate: the growth of the global economy will increase compared to 216 and continue at an annual rate of slightly over 3% in Heavy traffic volumes, 12 months change, % Statistics Finland: Finns confidence in the economy at the end of March was the highest it has been since Forecast for the Finnish GDP growth in 217: - Danske Bank +1.5% - Handelsbanken +1.8% Finnish Transport Agency: transport volumes in heavy traffic have continued to increase since April 216. Competition has tightened following the entry into force of the amended Postal Act in June 216. In addition to Posti, there are currently 13 operators delivering mail in Finland. In Russia, the increase in oil prices, which began in summer 216, strengthened the Russian ruble by 21% year-on-year. The Russian Ministry of Finance forecasts GDP growth of 2% in % 6% 4% 2% % -2% -4% Source: Finnish Transport Agency 3

4 January-March in a nutshell Posti in figures Acquisitions ,58 4.5% Net sales (EUR million) Adjusted EBITDA (EUR million) Adjusted operating result (EUR million) Employees on average Share of USO deliveries HR Hoiva Oy (Posti Kotipalvelut Oy) Key events Posti started building a freight terminal of approximately 26, m² in Vantaa Annual General Meeting decided that a dividend of altogether EUR 6 million be distributed 1 Countries of operation Net sales and operating profit forecasts 217 are unchanged Working days The number of working days was three days higher than in the previous year, 64 (61) 4

5 Freight and parcel volumes continued to grow Freight volumes*, million pcs The growth of parcel volumes in the Baltics,7,6,5,4,3,2,1, % % Number of parcels going through parcel points Parcel volumes in Finland and the Baltics, million pcs % % *Domestic freight volumes are not fully comparable with previous year s volumes. Figures from the reporting period include Kuljetus Kovalainen s, merged into Posti on March 1, freight volumes.

6 Group s result January-March 217 The Finnish Government Shared Services Centre for Finance and HR (Palkeet) buys its software robotics solution from OpusCapita 6

7 Net sales and adjusted operating result Net sales % - 1.5% % 5% % -5% -1% -15% Adjusted EBITDA % 7.7% % 8% 6% 4% 2% % Adjusted operating result 3.8% 2.8% % 3% 2% 1% % EUR million Change, % EUR million Adjusted EBITDA, % EUR million Adj. operating result, % External net sales by segment Itella Russia 7% OpusCapita 14% Net sales by quarters, EUR million Mail, Parcel and Logistics Services 79% 1 Q1 Q2 Q3 Q

8 Key figures % % Net sales, EUR million Adjusted EBITDA, EUR million % % EBITDA, EUR million % % Adjusted operating result, EUR million % % Operating result, EUR million %.6.1% Result before taxes, EUR million % % Result for the period, EUR million %.1.% Cash flow from operating activities, EUR million Return on equity (12 months), % Return on invested capital (12 months), % Equity ratio, % Gearing, % Gross capital expenditure, EUR million The number of working days was higher than in the previous year by three days. Net sales increased by 6.% in Finland and by 14.5% in other countries driven by acquisitions. International operations accounted for 14.5% of net sales driven by the appreciation of the ruble. Special items amounted to EUR 5.5 million. The operating result improved and amounted to EUR 1. million. The Group's net financing costs amounted to EUR.3 million. Net sales in euros for the year are further expected to increase compared to the previous year. The Group s adjusted operating result is further expected to remain on par with the previous year. The operating result for 217 will include significant special items. 8

9 Change in costs excluding special items January-March 216 January-March 217 * 9 *External services grew due to acquisitions of Veine and Kuljetus Kovalainen

10 Universal service obligation and the delivery quality The 5-day delivery speed requirement which applies to Posti concerns only letters with stamps. The share of these mail items in January-March was: 4.5% Share of all mail items: Mail items covered by the universal service obligation accounted for 4.5% of all of Posti's mail items Fulfillment of the 5-day delivery speed requirement on a monthly basis Special measures were implemented during the review period to improve delivery quality. The 5-day delivery speed requirements for letters covered by the universal service obligation was fulfilled with over 99.8%, which exceeds the requirements set by the Finnish Communications Regulatory Authority. 1. 1, , , , % Share of the Group s net sales: Operations under the universal service obligation amounted to EUR 28.6 (38.2) million, or 6.9% of the Group's net sales , , , , , ,

11 Employees Number of empolyees on average converted into fulltime equivalents in January-March was 18,58 (18,542). Employees (FTE) by segment Mail, Parcel and Logistics Services Itella Russia OpusCapita Number of employees converted into full-time equivalents on March 31, 217 was: The Group: 18,141 (18,466) people Finland: 13,759 (14,18) people Other countries of operation: 4,381 (4,286) people Uusi polku (New path) program on March 31, 217 applied: 2,62 accepted: 1,829 Other functions Number of employees (FTE) in Finland and other countries 25, 2, The Group s personnel expenses, EUR million, decreased by EUR 16.7 million, or by 8.6% year-onyear. Personnel expenses included EUR 1.7 (1.8) million in restructuring costs. Excluding restructuring costs, personnel expenses declined by 4.1% year-on-year. 15, 1, 5, Mar 31, 217 Other countries Finland 11

12 Segments Elastinen s and Riku Uski s Warrior Coffee s products are shipped to customers in Finland and around the world by Posti 12

13 Mail, Parcel and Logistics Services The increase in net sales was mainly due to acquisitions, higher demand for freight and logistics services and the fact that the first quarter included three more working days than the corresponding period in the previous year. Addressed letter volumes decreased and the competition increased, which were partly compensated by the price increases. Parcel Services saw positive development particularly in the cross-border trade, in the Baltic countries and in the B2C parcels. The number of parcels going through parcel points grew by 28%. In Logistics Services, the net sales of domestic freight increased also due to acquisitions. In the warehousing business, processing volumes and fill rates increased. Adjusted EBITDA improved. The adjusted operating result increased. The volume of electronic letters fell by 12%. The number of Netposti users increased by 1% and stood at 725, (659,) on March 31. Posti had a total of 1,427 service points in Finland, of which 48 were parcel points. EUR million % of Net sales Net sales Net sales change, % 6.6% -9.5% % of Net sales Adjusted EBITDA % % EBITDA % % Adjusted operating result % % Operating result % % Volumes, million pcs Addressed letters Parcels Domestic freight % 4 +8% 8 9.2,7,6,5,4,3,2, %.6 13

14 Net sales of Mail and Marketing Services, Press Services, Parcel Services and Logistics Services EUR million % -2.5% +4.2% +34.4% MAIL AND MARKETING SERVICES PRESS SERVICES PARCEL SERVICES LOGISTICS SERVICES 14

15 Itella Russia Euro-denominated net sales increased strongly. In local currency, net sales decreased slightly. Net sales were negatively affected by weakness of the economy and international trade, as well as the optimization of warehouse space due to lower customer demand. Net sales were boosted by higher demand for air and sea freight, growth in e-commerce and the new business brought in by the MaxiPost acquisition. The decline was the steepest in the demand for contract logistics, particularly warehousing. Adjusted EBITDA improved. EBITDA declined. The adjusted operating result improved due to the optimization of warehouse space. Operating result decreased. The average fill rate for warehouses in Moscow was 76%, while that of other regions was 77%. The Russian ruble appreciated by 21.% compared to the previous year. EUR million % of Net sales Net sales Net sales change, % 31.% -24.3% % of Net sales Adjusted EBITDA.9 3.3% % 1% 9% 8% 7% Warehouse fill rates at the end of the review period 9% 93% 92% 84% 85% 86% 89% 85% 81% 81% 82% 89% 86% 86% 86% 87% 76% 76% 83% 75% 69% 77% 77% 8% 75% 75% EBITDA.9 3.3% % Adjusted operating result % % 6% 5% Moscow Other areas Operating result % % 15

16 OpusCapita The year-on-year development of OpusCapita's volumes was as follows: electronic transactions (comparable) +18%, ipost products -5%. OpusCapita transmitted a total of 131 million transactions. The electronic transaction volume was 6 million transactions, which represents 46% of the total transaction volume. Net sales decreased. 58% of the net sales came from Finland, while the remaining 42% was from other countries. The Buyer-Supplier Ecosystem business grew by 21% during the first quarter mainly as a result of a business acquisition. Adjusted EBITDA improved, EBITDA declined. The adjusted operating result declined due to investments in growth. The operating result declined. EUR million % of Net sales Net sales % of Net sales Electronic transactions*, million pcs Net sales change, % -.7% -9.1% Adjusted EBITDA % % EBITDA.8 1.3% % Adjusted operating result % % % 6 Operating result % % 1 *comparable 16

17 Outlook 217 Net sales Net sales in euros for the year are further expected to increase compared with the previous year. The development of exchange rates, especially the ruble exchange rate, may affect the Group s net sales, result and balance sheet. Operating result The Group s adjusted operating result is further expected to remain on par with the previous year. The operating result for 217 will include significant special items. Capital expenditure Capital expenditure excluding possible acquisitions is expected to increase from the previous year. The Group s business is characterized by seasonality. Net sales and operating profit in the segments are not accrued evenly over the year. In postal services and consumer parcels, the first and fourth quarters are typically strong, while the second and third quarters are weaker. 17

18 Questions? Posti delivers Footway s mens, women s and children s shoes ordered from webshop to consumers in Finland 18

19 Attachments Kotipizzan boosts menekki sales kasvaa through Postisen coupons in kupongeilla Postinen, their impact on Postisen takasivun pizzakuponkien tiedetään aiheuttavan sales ryntäyksen is even ravintoloihin. more Se nähtiin jo ensimmäisessä kampanjassa kesäkuussa 215, kun kinkut effective pääsivät loppumaan than asiakasvyöryn TV vuoksi. - Olemme advertising huomanneet selkeästi, että Postisen kuponkeja käytetään. Ne vaikuttavat tuotteen menekkiin jopa tehokkaammin kuin tv-mainonta, Kotipizzan markkinointipäällikkö Kaisa Karjalainen sanoo. Itse pizzakaan ei syntyisi ilman Postia, sillä 27 ravintolaa ympäri Suomen saa kuivatarvikkeensa Postin kuljettamana. 19

20 Financial Targets Adjusted operating result percentage exceeds 5% Gearing does not exceed 35% Return on invested capital is at least 1% More than 1% of the Group s net sales will come from new business areas in 218 % Adjusted operating result, % % Gearing, % % Return on invested capital, % (rolling 12 months)

21 Group cost structure January-March 217 Indirect costs, EUR million %

22 Balance sheet EUR million Assets Equity and Equity ratio Goodwill Other non-current assets Tangible assets Current assets Equity Equity ratio, % 1,321 1, Mar 31, 216 Mar 31, % 5.1% Mar 31, 216 Mar 31,

23 Cash flow EUR million Result for the period Cash flow from operating activities before financial items and taxes Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities The consolidated cash flow from operating activities before capital expenditure was EUR 3.5 million. Investments according to the statement of cash flow amounted to EUR 23.1 million. During the year, the Group invested in the acquisition of HR Hoiva Oy, information systems, the transport fleet and production projects. At the end of the review period, liquid funds totaled EUR million. Undrawn committed credit facilities amounted to EUR 15. million Change in cash and cash equivalents Cash and cash equivalents at the end of the review period Cash flow from investing activities, EUR million Cash flow operating activities, EUR million

24 Net debt and the maturity structure of loans Net debt and gearing Maturity structure of loans and financing arrangements, EUR million 15 4% % 17.9% 3% 2% 1 1% % % % % -1% -2% Bonds Unused credit limits Net debt, EUR million Gearing, % 24

25 Thank you!