Norway Post Quarterly report Q

Transcription

1 Norway Post Quarterly report Q

2 Highlights Operating revenues increased by MNOK compared with the same period in 2007 Increase mainly due to acquisitions, increase in volumes for logistics products and high levels of activity in Ergo Group Earnings before non-recurring items amounted to MNOK 345 compared with MNOK 414 for the same period last year Launch of the new brand Bring, uniting Nordic mail and logistics operations In the 3rd quarter, costs connected to the new brand amounted to MNOK 138 New Nordic acquisitions in Q3: CombiTrans AB Emdal Transport & Spedisjon AS PNL AB - remaining 50% Lähettiryhmä OY Nor-Cargo UK (new in Q4) 2

3 Posten and Bring - two sides of the same story The launch of the new brand demonstrated that Norway Post is ready to meet the future, and that there is a connection between its offensive acquisition strategy in the Nordic countries and the traditional activities in Norway. The renewal of the logo illustrates that Posten and Bring belong to the same family. The new brand represents a huge economic undertaking, being a necessary and natural progression of a successful Nordic growth strategy. The total cost for 2008 will amount to MNOK 300, of which MNOK 138 was taken in the 3rd quarter. The reactions to the launch were positive: high levels of recognition, good understanding of the message, and positive target groups. 3

4 Operating revenues per quarter Average annual revenue growth of 13.1% (Q Q3 2008) * 2008 * Operating revenues per quarter in MNOK * As of September 2008, Ergo Group changed the accounting principle for the booking of telephony revenues from the gross to the net method. The figures for earlier periods in 2007 and 2008 have been restated accordingly. 4

5 Operating revenues from foreign subsidiaries Operating revenues in MNOK +50% +17% +141% +51% +23% +7% +20% Operating revenues from foreign subsidiaries From Q to Q3 2008, Norway Post s income were MNOK 747 (17 %) higher at the end of Q3 from foreign subsidiaries has increased by an 2008, than at the end of Q3 2007, and accounted average annual rate of 40.2% for 25.3 % of the Group s revenues (23.2% in 2007) 5

6 EBIT before non-recurring items and write-downs per quarter EBIT before non-recurring items and write-downs per quarter in MNOK * Branding costs ** EBIT before branding costs, non-recurring items and write-downs 6

7 Profit and Loss Q Q Change MNOK YTD 2008 YTD 2007 Change Operating revenues * EBITDA ** EBIT before non-recurring items and write-downs Write-downs Non-recurring items / (gains) EBIT Net financial items Net earings before tax * As of September 2008, Ergo Group changed the accounting principle for the booking of telephony revenues from the gross to the net method. The figures for earlier periods in 2007 and 2008 have been restated accordingly. ** Incl. operating costs of MNOK 138 connected to new brand in Q3 7

8 Key figures At the end of Q3, investments amounted to MNOK 1 745, a decrease of MNOK 739 compared with the same period in 2007, due to fewer in acquisitions in 2008 Net interest-bearing debt/ebitdafactor was 1.9*** (Q3 2007: 0.9) As at , Norway Post s long-term liquidity reserve, consisting of market investments and unused drawing rights, amounted to MNOK compared with at the same date in 2007 The decrease in ROIC before nonrecurring items compared with Q was due both to reduced profits (last 12 months) and increased invested capital MNOK YTD 2008 YTD 2007** Year 2007 Total capital Equity Interest-bearing liabilities Equity ratio (%) 28,4 33,7 33,2 Debt ratio (net) 0,6 0,3 0,3 ROIC (%) before branding costs, non-recurring items and writedowns* EBIT-margin before non-recurring items and write-downs (%) 9,3 11,2 9,8 1,7 2,1 3,0 * Moving 12 months average ** The figures for Q have been changed compared with the quarterly report last year as a result of changes in the comparison figures due to pension corrections in the 2007 annual report *** Net interest-bearing liabilities MNOK and 12 month moving EBITDA MNOK

9 Challenges for Norway Post I The State Budget for 2009 does not include funds to cover unprofitable mail and banking services In May 2008, when Norway Post was the subject of discussion in Parliament, the Government agreed to provide budget funds for the coming years in line with the principles of state ownership In 2009, Norway Post s cost for unprofitable mail and banking services will be MNOK 404. For the period of , the total cost of these services will amount to MNOK 636 According to the model for state ownership, the Norwegian Government is to provide funds covering costs connected to the unprofitable mail and banking services that it imposes on Norway Post: mail delivery 6 days a week throughout the country Post offices/pib (post office in shops) in all local districts banking services in post offices 9

10 Challenges for Norway Post II A large part of Norway Post s operating income is generated from unaddressed mail advertising. The acceptance of a requirement for pre-acceptance of unaddressed mail advertising, as proposed in the new marketing law, would practically put an end to Norway Post s distribution of advertising material. This would have serious consequences Operating income derived from unaddressed mail advertising covers a quarter of the costs of maintaining nationwide mail distribution. To compensate for such a loss in income is not possible The loss of this income would lead to a large loss in the Group s accounts More than 1000 jobs, distributed evenly over the whole country, would disappear and the remaining loss would have to be covered by the Government Norway Post supports the Government s proposal to maintain today s agreement on unaddressed mail advertising in the proposal for the new marketing law In order to limit distribution of unwanted advertising we recommend that today s requirement be extended to cover all distributors, including the newspapers. This would also ensure that all distributors have the same competitive terms 10

11 Employees Full-time equivalents, segment Revenues/full-time equivalents KNOK Revenues last 12 months/full time equivalents Moving 12 month average

12 Quality development (moving 12 month average) Preliminary YTD delivery quality for overnight A-mail was 87.4% compared with 85.0% in The 3rd quarter result was 88.7% compared with 88.1% in 2007 Licence requirement Delivery quality, moving 12 month average 12

13 Acquisition of Nor-Cargo UK Bring Logistics AS will purchase Nor-Cargo UK from Det Stavangerske Dampskibsselskab (DSD) and Hurtigruten Group w.e.f. October 22nd, 2008 Nor-Cargo UK s field of operation is trans-border transports, mainly between the UK and the Nordic countries. Bring Logistics and Nor-Cargo UK already cooperate, and Nor-Cargo UK is (amongst others) an important cog in the North Sea activities of Bring Logistics. Adding the company to the Bring-family will create synergies and improve Bring s brand-recognition. Nor-Cargo UK will ensure and improve logistics operations in Europe and the Nordic countries, as well as strengthen the strategic and operational positioning of Bring. Facts about Nor-Cargo UK 60 employees Operating revenue: approx. GBP 18 million 6 offices: Stallinborough (main office), Ireland, London, Brimingham, North Shields and Manchester 13

14 Segment structure for Norway Post Group Mail Logistics IT 14

15 External operating revenues per segment per 3rd quarter Change in MNOK and % Share of external revenues in % +8% +14% +3% Mail Logistics IT 15

16 EBITDA per segment per 3rd quarter 35,1% 28,9% MNOK -36,2% 2007 * Mail Logistics IT 16

17 Segment mail logistics IT letter mail banking services sale of goods document management mail 17

18 Volume development mail logistics IT Volume - mail products Mail and banking products Mill sendings Bring Citymail Posten Norge AS Moving 12 month average % change pa YTD 2008 Mail Norway Post Group Mail Posten Norge AS A and B mail (Posten Norge AS) Direct Mail* Mail Bring CityMail Group Banking transactions ** 3,7-1,3 2,9 4,1-1,3 1,5 3,2-2,6 2,7 3,7-2,4-0,7-0,7-6,8-5,5-0,9-0,3 0,15 6,9 0,4 10,7 5,5-4,2-1,6 11,9 12,2 4,9 8,4 9,5 21,5-8,3-6,0-11,9-10,0-12,5-11, * Addressed and unaddressed mail advertising ** Previous year s banking transactions have been restated as a result of a new principle for the calculation of volumes Unaddressed mail advertising decreased by 1.2% from Q and accounted for 51.2% of parent company mail volumes (51.5%) 18

19 Key figures mail logistics IT Both Bring Citymail Sweden and Bring Citymail Denmark have experienced an upswing in volumes sold compared with last year, and together account for 28% of the total of Norway Post s volume of addressed mail The lower result is mainly due to a disfavourable change in product mix for mail products, increased personnel and transport costs, and the expansion in both Sweden and Denmark In September, the conversion of 15 of a total of 124 Post Offices to Post-inshops started. The conversion will be carried out over a three-year period The Government s proposal for the State Budget for 2009 did not include government procurements. MNOK * Operating revenues Change Change % * 259 2,8 EBITDA * ,2 EBITDA margin 3,4 5,5* -2,1 - * The figures for 2007 have been restated due to a change in the principle for allocating the common Group expenses and to adjustments in connection with the booking of internal revenues 19

20 Segment mail logistics IT cargo thermo express parcels warehousing logistics 20

21 Key figures mail logistics IT Increased operating revenues and result compared with the same period last year as a consequence of acquisitions, high volumes and improvements in production MNOK Change Change % Operating revenues from international operations amounted to MNOK (35% of segment revenues) compared with MNOK (32%) for the same period in 2007 The international package volumes through PNL have developed positively, increasing by 26.4 % compared with last year Operating revenues ,0 EBITDA * ,1 EBITDA margin 6,9 5,5* 1,4 - * The figures for first half-year 2007 have been restated due to a change in the principle for allocating the common Group expenses and to adjustments in connection with the booking of internal costs 3rd quarter acquisitions: Combitrans AB Emdal Transport & Spedisjon AS PNL (remaining 50%) Lähettiryhmä OY Nor-Cargo UK (new in Q4) 21

22 Segment mail logistics IT operations infrastructure solutions consulting services IT 22

23 Key figures mail logistics IT The increase in operating revenues of 14% was mainly due to a large volume of new contracts and the acquisition of Bekk Consulting AS Organic growth for the first 3 quarters of 2008 amounted to 9% compared with 5 % in 2007 As of Q3, ErgoGroup has entered into contracts with a total value of MNOK 2 000, including: MNOK Change Operating revenues * Change % ,5 EBITDA ,9 EBITDA margin 12,4 10,9 1,5 - * As of September 2008, Ergo Group changed the accounting principle for the booking of telephony revenues from the gross to the net method. The figures for earlier periods in 2007 and 2008 have been restated accordingly. 5-year service agreement with Securitas 5-year service and support agreement with Petoro 3-year service agreement with Lindorff Framework agreement with Helse Sør-Øst 23

24 Future focus areas Focus on integrated value chains, technological development and cost efficiencies Efficiency-improvement-programme Spinnaker New high-tech sorting terminal at Robsrud, South-East Norway Continued focus on Nordic growth and strategy Emphasis on specific HMS measures Strong focus on environmental and climate issues Regulatory issues New marketing law Need for government procurements 24