Trading update Q4 2009TNT has continued to see a positive development of its volumes in the Express division in Q4 2009. The volumes in air, road and domestic in Q4 were all above those in Q4 2008. TNT views this as encouraging after the sharp but as of Q2 stabilising volume decline in the first nine months of 2009 against 2008. For the first time in 2009, the Express operating margin in Q4 was above that in Q4 2008. The focus on cost savings has contributed substantially to this result, while price pressure has continued.
In Mail, the decline in addressed volumes in the Netherlands in Q4 2009 was in line with expectations as was operating income, helped in particular by good Master plan savings and strong “Christmas volumes”.
The first two weeks in 2010 saw a continuation of the somewhat more positive volume trend of Q4 2009 in Express. Price pressure is still noticeable, however. The cost savings programmes continue to be on track to optimise our cost base further. In Mail, in line with guidance given at the 3 December 2009 analyst meeting, volumes are under pressure due to liberalisation and substitution, whilst cost savings progress will continue to support a continued good cash contribution.
Impairments (non cash) at the end of 2009 of goodwill and certain assets in EMN will be approximately Euro 150 million. In Express, further impairments for already decommissioned planes and certain intangibles will be approximately Euro 20 million. Both impairments will be charged against the Q4 results and are roughly in line with indications given on 3 December.
Update Vision 2015
Vision 2015, announced on 3 December 2009, has defined five focus areas. In the Day-Definite Delivery Services four focus areas are identified: European Parcels; Freight; Special Delivery Solutions and Emerging Platforms. All areas offer attractive profitable growth opportunities.
The fifth area, Mail NL, will focus on cash flow, cost adjustment and business renewal in a continuously declining market. Mail NL will over time be prepared towards enabling partnerships, amongst others in the context of further European postal consolidation. European Mail Networks (EMN) will realise and free up its value through partnerships and sale.
Since the 3 December announcement, TNT has taken significant steps to progress towards implementing its Vision 2015. Projects have been established on expanding the day-definite delivery services by profitable growth in Parcels, Freight and Delivery Solutions.
In Mail NL preparations have started to enable the entering into partnerships.
Last week’s announcement of an agreement in principle on the CLA for Mail Netherlands provides a well balanced basis for an efficient Mail operation going forward in a socially responsible way. The objective to realise Master plan savings of Euro 75 million in 2010 is unchanged after this agreement. Furthermore the agreement, once approved by the union members, provides a strong basis for realising the 16% cash EBITDA / Revenue objective for Mail NL (in Vision 2015), due to the optimised cash requirements for restructuring.
These requirements will be around Euro 50 million per year on average in the years to come, which is in line with the objectives announced on 3 December 2009. The combination of the CLA and implementation of Master plans will clearly contribute to offsetting the pressure caused by declining volumes.
In European Mail Networks, in line with the objective to realise value through partnerships and sale TNT already announced various steps in January:
- termination of the addressed mail business and part of the unaddressed mail business in Austria;
- agreement with publishers in Germany to start a “mail alliance” with leading German publishers. The positive outcome of the minimum wage appeal provides a much welcomed point of clarity for TNT’s operations in EMN Germany;
- sale of TNT’s unaddressed business in Germany (TNT Direktwerbung);
- sale of TNT’s telemarketing activities (DomiCall s.r.o.) in the Czech Republic.
Further steps are expected in the next few months.
Future updatesAt the publication of the FY 2009 figures and the Annual General Meeting TNT will further update the market on business performance and the subjects mentioned above. The full agenda for the AGM will be published on 1 March and will include amongst others an item with an update by TNT and discussion on strategy / Vision 2015; an item on the adoption of the proposed new remuneration policy for the Board of Management and an item on proposals for corporate governance.
TNT provides businesses and consumers worldwide with an extensive range of services for their mail and express delivery needs. Headquartered in the Netherlands, TNT offers efficient network infrastructures in Europe and Asia and continues to optimise the performance of its networks. TNT serves more than 200 countries and employs some 160,000 people. Over 2009, TNT reported €10.4 billion in revenues and an operating income of €648 million. TNT is publicly listed on the stock exchange of Amsterdam. TNT recognizes its social responsibility, and has formed partnerships with the United Nations World Food Programme and the United Nations Environment Programme to fight hunger and pollution in the world. Our efforts are being recognised: in 2010, TNT was again designated the “Supersector Leader” for “Industrial Goods and Services” (including the “Industrial Transportation” sector) in the Dow Jones Sustainability Index (DJSI), More information about TNT can be found on its website http://group.tnt.com.
PostNL is the inventive partner in the world of sending and receiving. We have been so for 200 years already. We are primarily active in the fields of mail, parcels and e-commerce, but we also offer services in the areas of data and document management, direct marketing and fulfilment. Outside the Netherlands, we are active in Germany, the United Kingdom, Italy, Belgium and Luxemburg. PostNL employs a total of more than 59,000 people. In 2013 our revenues reached € 4.3 billion.
We like to stay ahead of things. We are the most modern postal company in the world. We are proud of that. As the first listed postal company, we are an example to the rest of the world in automatic letter sorting. And our innovative parcels network is completely adapted to the wishes of web retailers.