ANNOUNCEMENT OF FINANCIAL STATEMENTS 2013

Transcription

1 ANNOUNCEMENT OF FINANCIAL STATEMENTS 2013 OF POST DANMARK (UNAUDITED) - PART OF POSTNORD 21 February 2014 SUMMARY FOR THE YEAR 2013 Post Danmark s total income decreased from DKK 8,858 million in 2012 to DKK 8,243 million in 2013, or 6.9 per cent. The fall in income was mostly driven by declining volumes for letters and intensified competition for parcels. In 2013, it was not possible to adjust the total level of expenses in pace with the fall in income despite implemented cost savings and efficiency improvements of both production and administration. As a result, total operating expenses amounted to DKK 7,950 million in 2013 compared with DKK 8,340 million in 2012, equivalent to a fall of 4.7 per cent. Post Danmark s operating profit/(loss) (EBIT) amounted to DKK (147) million in 2013 compared with DKK (158) million in In 2013, total profit/(loss) after tax was DKK (102) million compared with an after-tax profit/(loss) of DKK (117) million in The profit/(loss) for the year should be viewed in light of Post Danmark s concentrated restructuring efforts to ensure profitability. OUTLOOK FOR 2014 Despite implemented activities to strengthen the supply of products and improve customer satisfaction, it is anticipated that total revenue will decrease as a result of the continuing decline in letter volumes. Enhanced competitive strength in the field of parcels and other products will still not be sufficient to compensate for the loss of letters despite anticipated growth not least for parcel volumes. It is anticipated that changes in Post Danmark s framework conditions will enable continued efficiency improvements of production and distribution so that it will be possible to adjust costs and capacity to the permanently changed market conditions and improve future profitability. FUTURE FINANCIAL REPORTING OF THE POST DANMARK GROUP The complete Annual Report 2013 will be available in March Post Danmark A/S Tietgensgade Copenhagen V CVR no Telephone Contact person: K. B. Pedersen, CEO

2 CONTENTS 1 Summary for the Financial Year Contents 3 Financial Highlights and Ratios 4 Management s Review 7 Financial Review 10 Outlook Management s Statement 12 Income Statement and Statement of Comprehensive Income 13 Balance Sheet 15 Statement of Changes in Equity 16 Cash Flow Statement 17 Notes to the Announcement of Financial Statements 2 / 18

3 FINANCIAL HIGHLIGHTS AND RATIOS DKK MILLION INCOME STATEMENT Income 8,243 8,858 9,676 10,528 11,253 Operating expenses (7,950) (8,340) (8,880) (9,523) (10,494) Profit/(loss) before depreciation and amortisation (EBITDA) , Depreciation, amortisation and impairment losses (440) (676) (575) (617) (623) Operating profit/(loss) (EBIT) (147) (158) Profits/(losses) after tax of associates 8 6 (2) 5 1,560 Other financials (12) 8 (21) (22) (20) Profit/(loss) before tax (151) (144) ,676 Tax on profit/(loss) for the year (55) (74) (36) PROFIT/(LOSS) FOR THE YEAR (102) (117) ,640 BALANCE SHEET Non-current assets 4,035 3,373 3,836 4,118 4,461 Current assets 2,572 3,829 3,646 4,499 4,844 TOTAL ASSETS 6,607 7,202 7,482 8,617 9,305 EQUITY 2,437 3,035 3,786 4,483 4,931 Non-current liabilities 1,256 1,315 1,061 1,114 1,309 Current liabilities 2,914 2,852 2,635 3,020 3,065 TOTAL LIABILITIES 4,170 4,167 3,696 4,134 4,374 TOTAL EQUITY AND LIABILITIES 6,607 7,202 7,482 8,617 9,305 CASH FLOWS Operating activities , Investing activities 92 (400) 486 (401) (254) Of which investment in property, plant and equipment (329) (382) (416) (380) (375) Financing activities (459) (48) (1,068) (876) (458) CHANGE IN CASH AND CASH EQUIVALENTS 23 (5) (11) (264) 191 FINANCIAL RATIOS EBITDA margin, per cent EBIT margin/operating profit margin, per cent (2) (2) Return on equity, per cent n/a n/a Solvency ratio Dividend as a percentage of profit before tax n/a n/a Dividend per share Carrying amount per share Average number of full-time employees 12,727 13,411 14,731 16,206 18,049 In 2013, the Group disposed of the companies Transportgruppen A/S and Budstikken Transport A/S, and the company Direct Parcel Distribution (Denmark) A/S was merged into the Group. Comparative figures for 2012 have been restated accordingly. 3 / 18

4 MANAGEMENT S REVIEW Like the previous year, 2013 was a challenging year for the Post Danmark Group. In recent years, Post Danmark has experienced a sharp fall in income driven by continued digitisation and fierce competition. In 2013, income fell by DKK 615 million to DKK 8,243 million from DKK 8,858 million in Income decreased despite continued activities to strengthen customer service and the supply of products. In 2013, it was not possible to adjust the total level of expenses in pace with the fall in income despite implemented cost savings and efficiency improvements of both production and administration. Total operating expenses decreased by DKK 390 million from DKK 8,340 million in 2012 to DKK 7,950 million in The profit/(loss) after tax of DKK (102) million was an improvement relative to the after-tax profit/(loss) of DKK (117) million in The profit/(loss) for the year should be viewed in light of a gain on sale of properties and Post Danmark s concentrated restructuring efforts to ensure profitability. A significant improvement of the profit performance for the coming years will necessitate changes in the company s framework conditions to ensure that these framework conditions underpin efficiency improvement activities of the company. MARKET SITUATION The Danish economy showed slight signs of recovery. However, this was not sufficient to counterbalance further digital substitution and competition which continued to put Post Danmark s revenue and earnings under pressure. During the past ten years, mail volumes have declined by more than 50 per cent. In 2013, the decline was 10 per cent compared with a decline of 12 per cent in The negative development in the mail business, which is expected to continue in the coming years, is largely driven by cost reductions in businesses and digitisation of the public sector which implies that, from autumn 2014, use will be required of digital alternatives in the communication between public authorities and citizens in line with the compulsory use of digital alternatives introduced in 2013 in the communication between public authorities and businesses. Post Danmark is taking active part in the development of attractive alternatives through, among other things, the offer of e-boks, which is an electronic mailbox service for businesses and others that prefer a digital communication solution. The parcel business is influenced by fierce competition. At the same time, it is strongly affected by the general economic activity in society. It is expected that growth in the parcel market will exceed GDP growth in the coming years. In the course of 2013, parcel volumes rose by one per cent. The volume of BtC parcels continued to rise, driven by growth in e-commerce. Post Danmark is continuously working on supporting growth in the parcel market by making it easier to send and receive parcels and ensuring improved accessibility to its services. This is reflected in, among other things, a further deployment of Pakkeboksen self-service stations that almost four out of ten Danes have visited and the establishment of post shops with extended opening hours. At year-end, the number of collection points had risen to 1,193 thanks to renewed agreements with the large retail chains and an agreement between Post Danmark and Coop on a new concept for parcels comprising the installation of approx. 300 Pakkeboksen self-service stations in Coop stores. Of these Pakkeboksen self-service stations, approx. 270 were installed in 2013 in addition to the approx. 175 Pakkeboksen self-service stations installed in other locations throughout the country. STRATEGIC ACTIVITIES Post Danmark s most significant challenges are, among other things, the continued digitisation of letters and the improvement of its competitive strength in the other markets which in recent years have seen a demand focussed on lower prices. In 2013, work was begun on strengthening the company s service culture in order to improve customer satisfaction with the use of Post Danmark s services and address the intensified competition. This is reflected in, among other things, internal programmes designed to sharpen focus of all employees on satisfying customer demands as well as in a strengthened dialogue with the largest customers. As no state subsidy is granted to Post Danmark, adjustments made through a close dialogue with public authorities and regulators in relation to the legal framework for the provision of postal services are essential when changes occur in market conditions. In summer 2013, a compromise was reached by a broad political majority to amend the Danish Postal Services Act. With reference to 4 / 18

5 the heavy decline in letter volumes in Denmark and a wish to maintain the provision on commercial terms of highquality postal services, consensus was reached on the need for an adjustment to the conditions for performance of the universal service obligation. Post Danmark is very pleased to note that the political compromise on an amendment to the Postal Services Act gives consideration to the market development. This provides Post Danmark with flexibility to address changes in customer demands and the very challenging market conditions reflecting these changes. The amended law allows for delivery of Economy Letters (B) within four weekdays instead of three weekdays. In addition, it will be possible for Post Danmark to omit delivery of Priority Letters (A) to private recipients on Mondays. In the case of abolition of Monday delivery to private recipients, Post Danmark will offer a new product a Monday Letter to customers with a need for delivery of letters on Mondays. Finally, the branch network will be composed of two types of service outlets including partly post offices and post shops offering a full service and partly post shops offering a basic service. This division of the branch network will ensure postal services based to a higher extent on the needs of customers. In 2013, efforts to implement required adjustments to the cost structure were continued in order to improve profitability with due consideration to the obligations that follow from Post Danmark s universal service obligation. Extensive efforts are made to optimise the entire process from box collection and collection of letters and parcels from business customers over processing at letter and parcel sorting centres to delivery of mail to individual private and business customers. In 2013, 50 electric vehicles were acquired which, together with approx. 1,800 electric bicycles and approx. 80 electric mopeds, must ensure both cost-effective and environmentally efficient distribution. With effect from 1 January 2013, Post Danmark acquired the company Distribution Services A/S that has been a subsupplier to Post Danmark since The acquisition was made in order to strengthen competitiveness and reduce costs relating to packing and preparation of advertising material. Another important area for focus is adaptation of the branch network to match the extent to which it is used by customers. This adaptation is the result of, among other things, the increasing share of stamps sold online and the deployment of self-service solutions, such as Pakkeboksen and mobile solutions to smartphones. These facilities enable customers to carry out postal transactions at times that are convenient to them. The adaptation of the branch network, including the transformation of post offices into post shops, allows for cost reductions while at the same time ensuring improved accessibility and that customers still experience a high service level. In the course of the year, Post Danmark renewed its framework agreements on the establishment and operation of post shops with De Samvirkende Købmænd, Dansk Supermarked and Coop, just as an agreement was concluded with the latter on the installation of Pakkeboksen self-service stations in 300 Coop stores. In addition, the collaboration agreement with Danske Bank on banking services was renewed until the end of 2015, which makes it possible for customers to make ingoing payments and withdrawals from 180 of Post Danmark s service outlets. The adjustments and efficiency improvements implemented as a result of declining letter volumes and intensified competition within Post Danmark s other main areas led to a significant staff reduction during the year. Thus, the Group employed 12,727 staff members in 2013 compared with 13,411 the year before. With effect from 1 January 2013, Post Danmark acquired the PostNord Group s parcel business in Denmark. Subsequently, Direct Parcel Distribution (Denmark) A/S (DPD) and Post Danmark Logistik A/S were merged with Post Danmark A/S as the surviving company. The purpose was to provide scope for additional efficiency improvements and thereby strengthen competitiveness within parcel distribution on the Danish market as well as to join forces under the common Post Danmark brand. In the course of the year, the PostNord Group launched a new brand subsequently to which the Group s range of Nordic logistics solutions will be consolidated in PostNord Logistics. The staged launch of the new brand will continue into As part of these activities, Post Danmark s subsidiaries Transportgruppen A/S and Budstikken Transport A/S were transferred to and merged with PostNord Logistics of the PostNord Group with effect from the beginning of the year. The disposal of Transportgruppen A/S and Budstikken Transport A/S as well as the merger of Post Danmark A/S, Post Danmark Logistik A/S and Direct Parcel Distribution (Denmark) A/S implies that the Danish parcel business is recognised in the financial statements of Post Danmark and that logistics activities are recognised in the financial statements of PostNord Logistics. Comparative figures for 2012 have been restated accordingly. In 2013, the subsidiary Data Scanning A/S increased its range of activities by the company s signing of an agreement on the acquisition of all activities in ISS Document A/S. The acquisition strengthens the Group s overall offerings and position in the growing market for scanning services and creates potential for synergy with the existing communication business. 5 / 18

6 CUSTOMER AND EMPLOYEE SATISFACTION Since 1998, Post Danmark has worked systematically with the EFQM Excellence Model. This work is supported by, among other things, ongoing certifications of Post Danmark in relation to quality, environment and working environment. In 2013, Post Danmark was comprised by the PostNord Group s certification for quality and environment. Owing to its existing certification for occupational health and safety, Post Danmark has now received certification for all three areas. The EFQM Excellence Model is based on the philosophy of TQM. Using the commitment of management as its point of departure, TQM aims at involving everyone in ensuring continuous improvements through focus on customers, employees and facts. As part of this work, the Group carries out regular measurements of customer and employee satisfaction. The background to these measurements is a wish to identify relevant focus areas and strengthen Post Danmark as a supplier and workplace. On the customer side, measurements are carried out to monitor both private customer and business customer satisfaction with the use of Post Danmark s range of products and services. In 2013, despite major restructuring of production, Post Danmark managed to retain both business and private customer satisfaction. Thus, like in 2012, both groups evaluated Post Danmark at a score of 71 on a scale from 0 to 100 in relation to satisfaction. In 2013, the on-time delivery performance for letters was 93.2 per cent, which is above the service standard required according to the individual licence granted to Post Danmark. However, the performance level for on-time delivery was 0.3 per cent lower than in 2012, which mainly can be attributed to the running-in of new sorting equipment at letter sorting centres at the beginning of the year. In 2013, 88 per cent of Post Danmark s employees participated in the annual employee satisfaction survey (FOCUS) that gives a weighted score of, for example, cooperation, commitment and job satisfaction. Like in 2012, the score for 2013 was 68 on a scale from 0 to 100. In light of the significant changes experienced by the employees in relation to their daily work, the score is most satisfactory in terms of a very positive development of 9 points from 2011 to / 18

7 FINANCIAL REVIEW INCOME STATEMENT The consolidated financial statements consolidate the financial statements of Post Danmark A/S and its subsidiaries Post Fleet Management A/S, Distribution Services A/S and Data Scanning A/S. Profit/(loss) before tax amounted to DKK (151) million compared with DKK (144) million in 2012, while the profit/(loss) after tax amounted to DKK (102) million (2012: DKK (117) million). The past year was characterised by weak economic conditions which, in combination with increased substitution as a result of competition from digital alternatives, led to a heavy volume decline for Post Danmark s letter segment. Letter volumes thus declined by 10 per cent (in 2012 by 12 per cent). On the other hand, parcel volumes rose by one per cent. In 2013, targeted actions were taken by Post Danmark to adjust production and administration to the future level of activity, which entailed a considerable staff reduction and significant restructuring costs. Total income amounted to DKK 8,243 million, a decrease of DKK 615 million compared with Revenue for the year fell to DKK 8,146 million from DKK 8,784 million in The fall was driven by declining volumes for letters and intensified competition for parcels which resulted in lower average prices. Other operating income, which mainly relates to sale of properties and rental income, amounted to DKK 97 million against DKK 74 million in External operating expenses decreased from DKK 2,830 million in 2012 to DKK 2,762 million in The decrease was due partly to implemented cost savings. Staff costs fell by DKK 322 million during the financial year from DKK 5,510 million in 2012 to DKK 5,188 million in The fall resulted, in particular, from a staff reduction of just over 5 per cent, reflecting efficiency improvements and adjustments to the Group s production capacity which were partly offset by costs of implemented restructurings. Depreciation, amortisation and impairment losses decreased from DKK 676 million in 2012 to DKK 440 million in 2013, due to the implementation of a pan-nordic SAP platform in As a consequence of the afore-mentioned conditions, the operating profit/(loss) (EBIT) was improved from DKK (158) million in 2012 to DKK (147) million in Profits/(losses) of associates amounted to DKK 8 million against DKK 6 million in In conformity with the expectations expressed in the Annual Report for 2012, Post Danmark experienced a sharp decrease in revenue. As a result of the structural challenges connected with a continued adjustment of production capacity and the restructuring costs involved, it was not possible to reduce the level of expenses at the same pace. For this reason, the operating profit was negative as anticipated. AMOUNTS IN DKK MILLION Total income 8,243 8,858 External operating expenses (2,762) (2,830) Staff costs (5,188) (5,510) EBITDA Depreciation, amortisation and impairment losses (440) (676) Operating profit/(loss) (EBIT) (147) (158) Net financials (4) 14 Profit/(loss) before tax (151) (144) Tax on profit/(loss) for the year Profit/(loss) for the year (102) (117) Financial ratios EBIT margin/operating profit margin, per cent (2) (2) Number of full-time employees 12,727 13,411 The main items of the financial statements are analysed in the following. REVENUE Total revenue decreased by DKK 638 million compared with 2012, reflecting the heavy volume decline for letters and lower average prices for parcels as a result of intensified competition. The business mail segment continued to be most strongly affected by the fall in volume. This can be explained by electronic substitution, driven in large part by the wish of Danish businesses and public authorities to replace physical mail by digitised mail. At the same time, Priority Letters (A) experienced a substantial volume decline during the year, favouring the cheaper alternatives of Economy Letters (B) and Business Letters (C). This development was further accentuated by the increased accessibility as to private customers use of Economy Letters (B). Parcel revenue decreased compared with 2012, due mainly to lower average prices. 7 / 18

8 Overall, unaddressed mail, magazine mail, magazines and local weekly newspapers showed a fall in revenue in The fall was, in particular, attributable to intensified competition from other suppliers. OTHER OPERATING INCOME Other operating income, which includes external rental income, a net gain on disposal of assets etc., totalled DKK 97 million in 2013 compared with DKK 74 million in EXTERNAL OPERATING EXPENSES External operating expenses amounted to DKK 2,830 million in 2012 and DKK 2,762 million in The decrease was due to implemented savings on other external expenses. STAFF COSTS Staff costs amounted to DKK 5,188 million in 2013 compared with DKK 5,510 million in 2012, a decrease of DKK 322 million. The total number of staff, translated into full-time equivalents, was 12,727, a reduction of 684 full-time equivalents compared with the year before, or just over 5 per cent. The fall in the number of staff was due to concentrated efforts to improve efficiency and adjust production costs to the declining level of activity which resulted from shrinking volumes. In addition to the staff reduction, staff costs were affected by significant restructuring costs incurred in DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES Depreciation, amortisation and impairment losses for the year amounted to DKK 440 million compared with DKK 676 million in The decrease was attributable to the implementation of a pan-nordic SAP platform in July 2012 replacing most of the previous SAP platform in Post Danmark. OPERATING PROFIT/(LOSS) (EBIT) Primary earnings were improved by DKK 11 million from DKK (158) million in 2012 to DKK (147) million in Thus, it was not possible to adjust the level of expenses fully to the changed market conditions which, among other things, should be viewed in light of initiated restructuring activities during the year. FINANCIALS The share of profit or loss in associates was DKK 8 million in 2013 compared with DKK 6 million in Financial income and expenses amounted to DKK (12) million net in 2013 compared with DKK 8 million in The difference is attributable to the recovery of interest on the Danish Customs and Tax Administration s VAT refund in TAX ON PROFIT/(LOSS) FOR THE YEAR Tax on profit/(loss) for 2013 was DKK 49 million, equivalent to an effective tax rate of 32 per cent. The difference in relation to the income tax rate of 25 is primarily attributable to an adjustment related to previous years. ALLOCATION OF PROFIT It is proposed that the profit/(loss) for the year of DKK (102) million be transferred to equity. BALANCE SHEET 31/ / AMOUNTS IN DKK MILLION Non-current assets 4,035 3,373 Current assets 2,572 3,829 TOTAL ASSETS 6,607 7,202 Equity 2,437 3,035 Non-current liabilities 1,256 1,315 Current liabilities 2,914 2,852 TOTAL EQUITY AND LIABILITIES 6,607 7,202 Financial ratios Solvency ratio, per cent NON-CURRENT ASSETS Intangible assets rose from DKK 379 million at year-end 2012 to DKK 426 million at 31 December 2013, due mainly to the acquisition of Distribution Services A/S. Property, plant and equipment decreased from DKK 2,925 million at year-end 2012 to DKK 2,747 million at 31 December In 2013, properties totalling DKK 90 million were transferred to assets held for sale. The remaining decrease was attributable to depreciation etc. Of properties transferred to assets held for sale, properties were sold at DKK 70 million net during the year. In addition, properties were written down for impairment at an amount of DKK 2 million, after which properties totalling DKK 200 million were classified as assets held for sale under current assets in the balance sheet. Financial assets of DKK 862 million at 31 December 2013 are primarily a new loan of DKK 800 million to the parent company PostNord AB and investments in associates. Calculated at equity value, financial assets amounted to DKK 62 million at 31 December 2013 compared with DKK 69 million at year-end RECEIVABLES In 2013, receivables decreased by DKK 1,299 million from DKK 3,539 million at year-end 2012 to DKK 2,240 million at 31 December The decrease can primarily be 8 / 18

9 explained by a decrease in receivables from group enterprises and a decrease of DKK 36 million in trade receivables resulting from lower revenue during the year. EQUITY Equity at 31 December 2013 amounted to DKK 2,437 million, falling by DKK 598 million since the previous year. The change in equity was mainly due to payment of DKK 496 million as dividend and the effect of the profit/(loss) for the year of DKK (102) million. The solvency ratio, calculated as equity as a percentage of the balance sheet total, was 37 per cent at 31 December 2013 compared with 42 per cent at 31 December NON-CURRENT LIABILITIES Non-current liabilities amounted to DKK 1,256 million at 31 December 2013, DKK 59 million less than on the same date in The decrease mainly reflected that other provisions were diminished by DKK 29 million and that deferred tax was diminished by DKK 30 million. CURRENT LIABILITIES Current liabilities amounted to DKK 2,914 million at 31 December 2013, which is slightly more than the prior-year figure of DKK 2,852 million. The most significant changes under this item were an increase of DKK 219 million in payables to other companies of the PostNord Group, partly offset by a decrease of DKK 139 million in trade payables. CASH FLOW STATEMENT In 2013, the cash flow from ordinary operating activities was DKK 390 million. The cash flow from investing activities was DKK 92 million. The cash flow from financing activities was DKK (459) million relating, in particular, to dividend paid. The cash flow from financing activities was DKK 23 million lower than the cash flow from operating activities and investing activities. Cash and cash equivalents therefore rose by DKK 23 million to DKK 126 million at 31 December SUBSEQUENT EVENTS No events have occurred subsequent to the closing of the financial statements which have materially affected the consolidated financial statements for / 18

10 OUTLOOK 2014 Despite implemented activities to strengthen the supply of products and improve customer satisfaction, it is anticipated that total revenue will decrease as a result of the continuing decline in letter volumes. Enhanced competitive strength in the field of parcels and other products will still not be sufficient to compensate for the loss of letters despite anticipated growth not least for parcel volumes. It is anticipated that changes in Post Danmark s framework conditions will enable continued efficiency improvements of production and distribution so that it will be possible to adjust costs and capacity to the permanently changed market conditions and improve future profitability. 10 / 18

11 MANAGEMENT S STATEMENT The Board of Directors and the Executive Board have today considered and approved the Annual Report of Post Danmark for the Financial Year 1 January 31 December The Annual Report is presented in accordance with International Financial Reporting Standards as adopted by the EU. In addition, the Annual Report is presented in accordance with additional disclosure requirements pursuant to the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the financial statements give a fair presentation of the Group s and the company s assets, liabilities and financial position at 31 December 2013 and of the results of the Group s and the company s operations and cash flows for the Financial Year 1 January 31 December We believe that the Management s Review gives a fair presentation of the development in the Group s and the company s operations and financial performance, of the results for the year and of the Group s and the company s financial position as well as a description of the most significant risks and elements of uncertainty to which the Group and the company are exposed. Copenhagen, 18 February 2014 EXECUTIVE BOARD K. B. Pedersen CHIEF EXECUTIVE OFFICER Nikolaj Ahrenkiel Henning Christensen BOARD OF DIRECTORS Håkan Ericsson CHAIRMAN Lars Chemnitz Peter Madsen K. B. Pedersen Henrik Rättzén Isa Rogild Jørn Schmidt 11 / 18

12 INCOME STATEMENT NOTE DKK MILLION Revenue 8,146 8,784 Other operating income Total income 8,243 8,858 External operating expenses (2,762) (2,830) Staff costs (5,188) (5,510) Profit/(loss) before depreciation and amortisation (EBITDA) Depreciation, amortisation and impairment losses (440) (676) Operating profit/(loss) (EBIT) (147) (158) Share of profit or loss in associates 8 6 Financial income Financial expenses (28) (27) Profit/(loss) before tax (151) (144) 8 Tax on profit/(loss) for the year PROFIT/(LOSS) FOR THE YEAR (102) (117) STATEMENT OF COMPREHENSIVE INCOME NOTE DKK MILLION Profit/(loss) for the year (102) (117) COMPREHENSIVE INCOME (102) (117) 12 / 18

13 BALANCE SHEET NOTE DKK MILLION 31 DEC DEC 2012 ASSETS NON-CURRENT ASSETS INTANGIBLE ASSETS Goodwill Development projects in service Other intangible assets ,7 TOTAL INTANGIBLE ASSETS PROPERTY, PLANT AND EQUIPMENT Land and buildings 1,592 1,696 Leasehold improvements Plant and machinery Fixtures and fittings, tools and equipment Property, plant and equipment under construction and prepayments ,7 TOTAL PROPERTY, PLANT AND EQUIPMENT 2,747 2,925 FINANCIAL ASSETS Investments in associates Receivables from group enterprises TOTAL FINANCIAL ASSETS TOTAL NON-CURRENT ASSETS 4,035 3,373 CURRENT ASSETS 5 ASSETS HELD FOR SALE INVENTORIES 6 5 RECEIVABLES Trade receivables Receivables from group enterprises 1,167 2,345 Tax receivable Other receivables Prepayments TOTAL RECEIVABLES 2,240 3,539 CASH AND CASH EQUIVALENTS TOTAL CURRENT ASSETS 2,572 3,829 TOTAL ASSETS 6,607 7, / 18

14 BALANCE SHEET NOTE DKK MILLION 31 DEC DEC 2012 EQUITY AND LIABILITIES EQUITY Share capital Retained earnings 1,937 2,035 Proposed dividend TOTAL EQUITY 2,437 3,035 NON-CURRENT LIABILITIES Provision for deferred tax Other provisions Debt to mortgage credit institutions Other non-current payables TOTAL NON-CURRENT LIABILITIES 1,256 1,315 CURRENT LIABILITIES 9 Other provisions Debt to other credit institutions Prepayments received from customers Trade payables Payables to group enterprises Payables to associates 2 1 Other payables 1,334 1,371 Deferred income TOTAL CURRENT LIABILITIES 2,914 2,852 TOTAL LIABILITIES 4,170 4,167 TOTAL EQUITY AND LIABILITIES 6,607 7,202 1 Accounting policies 2 Accounting judgements and estimates 3 Segment information 6 Acquisition of enterprises 10 Contingent liabilities and contingent assets 11 Related parties 12 Subsequent events 14 / 18

15 STATEMENT OF CHANGES IN EQUITY DKK MILLION SHARE CAPITAL RETAINED EARNINGS PRO- POSED DIVIDEND TOTAL EQUITY Equity at 1 January , ,509 Comprehensive income for the year (117) (117) Capital injection by group enterprise Dividend paid (397) (397) Dividend of treasury shares 3 (3) Proposed dividend (500) 500 EQUITY AT 31 DECEMBER , ,035 Equity at 1 January , ,035 Comprehensive income for the year (102) (102) Dividend paid (496) (496) Dividend of treasury shares 4 (4) EQUITY AT 31 DECEMBER ,937 2, / 18

16 CASH FLOW STATEMENT DKK MILLION Profit/(loss) before tax (151) (144) Adjustments for operating items not affecting cash: Depreciation, amortisation and impairment losses Share of profit or loss in associates (8) (6) Increase (Decrease) in provisions (37) 57 (Gain)/disposal of non-current assets 9 (11) Gain on disposal of assets held for sale (23) (27) Financial income and expenses 12 (8) Other adjustments (1) (2) OPERATING CASH FLOW BEFORE CHANGE IN WORKING CAPITAL Change in working capital: Change in receivables and inventories Change in trade payables and other payables 12 (181) OPERATING CASH FLOW Interest received Interest paid (17) (20) Income tax paid (net) (16) (43) CASH FLOW FROM OPERATING ACTIVITIES Purchase of intangible assets, property, plant and equipment (265) (384) Sale of property, plant and equipment Purchase of investments in associates (139) - Decrease/increase in loans to group enterprises 360 (176) Dividends received from associates CASH FLOW FROM INVESTING ACTIVITIES 92 (400) Incurrence of interest-bearing debt Principal repayments net on debt to mortgage credit institutions and credit institutions as well as bond debt - (31) Dividend paid (496) (397) Capital injection by group enterprise - 40 CASH FLOW FROM FINANCING ACTIVITIES (459) (48) Cash flow for the year 23 (5) Cash and cash equivalents, beginning of year CASH AND CASH EQUIVALENTS, END OF YEAR Cash and cash equivalents at year-end are composed as follows: Cash and bank balances TOTAL / 18

17 NOTES TO ANNOUNCEMENT OF FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES The Annual Report of the Post Danmark Group for 2013 is presented in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional Danish disclosure requirements for annual reports covered by reporting class D pursuant to the Danish Financial Statements Act. Additional Danish disclosure requirements are those laid down by the statutory order on the adoption of IFRS issued pursuant to the Danish Financial Statements Act. The Annual Report for 2013 contains a complete description of accounting policies applied. The Annual Report for 2013 is presented in DKK million. With effect from 1 January 2013, Post Danmark has implemented IFRS 9 and subsequent amendments to IFRS 9, IFRS7 and IAS 39, IFRS 10-12, amendments to IFRS 10, 11 and 12, IAS 27 (2011), IAS 28 (2011), amendments to IAS 27 (2011), amendments to IAS 19, amendments to IAS 32, amendments to IAS 39, annual improvements to IFRSs cycle, annual improvements to IFRSs cycle and IFRIC 21. IFRS 9 and subsequent amendments to IFRS 9, IFRS 7 and IAS 39, amendments to IAS 19, annual improvements to IFRSs cycle, annual improvements to IFRSs cycle and IFRIC 21 have not yet been adopted by the EU. The new and changed accounting standards and interpretations have not affected the annual report. Disregarding the implementation of the afore-mentioned standards and interpretations, the accounting policies applied are unchanged compared with previous years. 2. ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of annual reports requires the Management to make accounting judgements and estimates that affect the application of accounting policies as well as recognised assets, liabilities, income and expenses. Actual results may differ from these estimates. For a description of the most significant judgements made by the Management in applying the Group s accounting policies and the uncertainty associated with a significant estimate, please refer to the Annual Report SEGMENT INFORMATION Segments are not included in Post Danmark s management reporting due to the large extent of shared production of the products. Consequently, segment information is not presented in the annual report. 4. ACQUISITION AND DISPOSAL OF NON-CURRENT ASSETS In the 2013 financial year, the Group s additions of intangible assets, property, plant and equipment amounted to DKK 425 million and disposals to DKK 249 million. 17 / 18

18 5. ASSETS HELD FOR SALE Assets held for sale (properties) are composed as follows: DKK MILLION COST ACC. DEPRECIATION CARRYING AMOUNT Balance at 1 January Transferred for sale during the year Sold during the year (105) (35) (70) Impairment losses for the year - 2 (2) Balance at 31 December Recognised profit from properties sold: Total selling expenses, net 93 Carrying amount (70) Accounting profit 23 Assets are classified as held for sale when their carrying amount primarily will be recovered through a sale within 12 months on the basis of a formal plan instead of through use. 6. ACQUISITION OF ENTERPRISES With effect from 1 January 2013, Post Danmark acquired the shares in the company Distribution Services A/S and the group enterprise Direct Parcel Distribution (Denmark) A/S. Immediately after the acquisition, the latter company was merged into Post Danmark A/S. 7. IMPAIRMENT TEST At 31 December 2013, tests were carried out by the Management of the indication of any impairment of the Group s assets. On the basis of these tests, no need was established for impairment of the Group s assets. 8. TAX ON PROFIT/(LOSS) FOR THE YEAR The Group s total tax on profit/(loss) for the year amounted to DKK 49 million, equivalent to an effective tax rate of 32 per cent. 9. OTHER PROVISIONS Other provisions decreased by DKK 37 million, due mainly to a decrease in provisions for dismissals in connection with organisational changes. Apart from this, no significant changes in provisions have occurred subsequent to the Annual Report for CONTINGENT LIABILITIES AND CONTINGENT ASSETS Post Danmark is engaged in competitor complaints filed with and under consideration by the Danish Competition Authority. The complaints are disputed by Post Danmark. In addition, Post Danmark is engaged in a number of litigation/arbitration proceedings. In the opinion of the Management, the outcome of these litigation/arbitration proceedings and the investigations of the Danish Competition Authority will not materially affect the Group s financial position. 11. RELATED PARTIES For a review of related party transactions, please refer to Post Danmark s Annual Report for SUBSEQUENT EVENTS No events have occurred subsequent to the closing of the financial statements which have materially affected the consolidated financial statements for / 18