Presentation interim report Q3 2015
0 likes3,920 views
In Q3 2015, PostNord AB reported a 3% decline in net sales to SEK 9,218 million, primarily driven by decreasing mail volumes and heightened competition in the logistics sector. The company experienced strong growth in e-commerce with parcel volumes increasing by 9%, while adjusted EBIT saw a significant drop to SEK 81 million compared to SEK 345 million in Q3 2014. Ongoing restructuring and cost-cutting measures are essential due to the continued decline in mail volumes, particularly in Denmark, where priority mail dropped by 82% since the start of the millennium.
Presentation interim report Q3 2015
- 1. Third quarter 2015 October 28, 2015
- 2. 2 Overview of results PostNord AB (publ), Q3 2015 SEKm Q3 2015 Q3 2014 9M 2015 9M 2014 FY 2014 Net sales 9,218 9,535 -3% 28,917 29,350 -1% 39,950 EBITDA 461 768 2,158 1,678 2,198 Adjusted EBIT1) 81 345 426 421 861 EBIT 33 345 848 421 351 Net income for the period 22 232 615 256 176 Cash flow from operating activities -264 -271 749 -620 670 Net debt 1,308 4,197 1,308 4,197 3,672 1) Adjusted for items affecting comparability. For more information, please refer to the interim report for January-September 2015.
- 3. Third quarter 2015 3 Market trends: − Strong growth in e-commerce, parcel volumes increasing − Continued declines in mail volumes, dramatic drop in Denmark 82% drop in priority mail in Denmark since start of new millennium − Tough competition in the logistics market Swedish inquiry into postal legislation launched Danish inquiry into postal legislation ongoing Higher postage for Danish express mail Appreciated e-commerce forum with customers and suppliers on theme of consumer power and more international competition Strålfors to remain in the PostNord Group PostNord AB (publ), Q3 2015
- 4. PostNord, Group Still on the right track but in an even more challenging world 4 NET SALES AND EBIT MARGIN Net sales of SEK 9,218m (9,535) – Net sales fell 4%, excluding exchange rates and acquisitions – Decreasing mail volumes and prevailing tough competition in logistics business Adjusted EBIT SEK 81m (345), 0.9% (3.6) – Dramatically declining mail volumes adversely affect the result in Denmark – Mix effect with lower proportion of income for mail business has negative effect in Sweden along with higher social security costs for young people – Slowdown in the Norwegian economy related to substantial drop in price of oil has negative effect in Norway – Further measures required in pace with the accelerating decline in mail volumes PostNord AB (publ), Q3 2015 -2 0 2 4 6 8 10 0 2,000 4,000 6,000 8,000 10,000 12,000 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Net sales, SEK m. EBIT-margin, %
- 5. 0 50 100 150 200 250 300 350 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Sweden, priority mail Sweden, non-priority mail Denmark, priority mail Denmark, non-priority and business mail Trends in the market 5 Mail volumes declined by a total of 11% compared to Q3 2014 – 23% in Denmark – 7% in Sweden Parcel volumes increased by a total of 9% compared to Q3 2014 – E-commerce-related B2C parcels increased 13% 0 10 20 30 40 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Parcels, total MAIL, MILLIONS OF UNITS PARCELS, MILLIONS OF UNITS PostNord AB (publ), Q3 2015
- 6. PostNord Sweden 6 -2 0 2 4 6 8 10 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Net sales, SEK m. EBIT-margin, % NET SALES AND EBIT MARGIN Net sales unchanged – Mail volumes decreased by a total of 7% – Parcel volumes increased, positive growth in e-commerce and goods distribution Adjusted EBIT SEK 186m (387), 3.4% (7.1) – Q3 2014 included extra mailings related to the general election in Sweden and positive adjustments of pensions and IT costs – Positively impacted by cost-cutting programs implemented – Mix effect with lower proportion of income for mail business has negative effect along with higher social security costs for young people – Continued restructuring required in pace with falling mail volumes PostNord AB (publ), Q3 2015 Note: All figures are adjusted in line with the new organization and Group overheads are charged to all countries, but not PostNord Strålfors.
- 7. PostNord Denmark 7 -10 -5 0 5 10 0 1,000 2,000 3,000 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Net sales, SEK m. EBIT-margin, % NET SALES AND EBIT MARGIN Net sales were down 5% and 7% excluding exchange rates and acquisitions – Mail volumes fell by 23% – Parcel volumes increased but not by enough to compensate for the loss of mail volumes – The market remains characterized by tough competition Adjusted EBIT SEK -149m (-57), -6.4% (-2.3) – The accelerating decline in mail volumes adversely affects the result – Further cost-cutting measures are required PostNord AB (publ), Q3 2015 Note: All figures are adjusted in line with the new organization and Group overheads are charged to all countries, but not PostNord Strålfors.
- 8. PostNord Norway 8 -6 -4 -2 0 2 4 6 0 500 1,000 1,500 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Net sales, SEK m. EBIT-margin, % NET SALES AND EBIT MARGIN Net sales were down 11% and 7%, excluding exchange rates and acquisitions – The logistics market was negatively affected by the economic slowdown related to the drastic drop in the price of oil – Many of the customers are suppliers to the oil industry – The market remains characterized by tough competition EBIT SEK -31m (-7), -3.2% (-0.6) – Positively affected by implemented savings programs and greater flexibility, but not compensating for the economic slowdown – New terminal in Alfaset, Olso, has entailed higher costs during the construction period and adversely affected the result PostNord AB (publ), Q3 2015 Note: All figures are adjusted in line with the new organization and Group overheads are charged to all countries, but not PostNord Strålfors.
- 9. PostNord Finland 9 -4 -2 0 2 4 0 100 200 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Net sales, SEK m. EBIT-margin, % NET SALES AND EBIT MARGIN Net sales rose by 18% percent and 4%, excluding exchange rates and acquisitions – Parcel volumes rose – Challenging economic situation in Finland EBIT SEK 4m (2), 2.0% (1.2) – Positively affected by increased sales and implemented savings programs Acquisition of Finnish company Uudenmaan Pikakuljetus Oy (UPK) completed on September 1 – Strengthens PostNord’s position in Finland within domestic parcel transportation, scheduled deliveries, logistics solutions for healthcare and e-commerce and temperature-controlled transport services PostNord AB (publ), Q3 2015 Note: All figures are adjusted in line with the new organization and Group overheads are charged to all countries, but not PostNord Strålfors.
- 10. PostNord Strålfors Fulfilment business excluded 10 -10 -8 -6 -4 -2 0 2 4 6 8 10 0 500 1,000 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Net sales, SEK m. EBIT-margin, % NET SALES AND EBIT MARGIN Net sales fell by 8% – Higher sales for standardized printing solutions – Lower sales in the areas most vulnerable to digital competition EBIT SEK 23m (8), 4.4% (1.4) – Positively impacted by cost-cutting programs Strålfors to stay in the PostNord Group Annemarie Gardshol appointed CEO PostNord AB (publ), Q3 2015 Note: All figures are adjusted in line with the new organization and Group overheads are charged to all countries, but not PostNord Strålfors.
- 11. 9 251 SEKm 9 244 SEKm 11 Costs development *Excluding restructuring costs GROUP’S OPERATING EXPENSES, SEKmTREND OF GROUP’S COSTS PostNord AB (publ), Q3 2015 0 2,000 4,000 6,000 8,000 10,000 12,000 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Personnel expenses* Transportation expenses Other expenses, depreciation and impairments* Restructuring costs *Including cost inflation -2% 0% +1% 0%+1%
- 12. 12 Trend of cash flow PostNord AB (publ), Q3 2015 155 -419 252 10 -300 -250 -200 -150 -100 -50 0 50 100 150 200 FFO Change in working capital Investments Financing CASH FLOW, THIRD QUARTER 2015, SEKm Change in working capital − Incoming payments from sale had positive impact − Outgoing payments of pensions and holiday compensation had negative impact Cash flow from operating activities SEK -264m Investments positively affected by − Cash payment of SEK 495m from divestment of property − Lower level for investments SEK -198m (-385) Cash flow for the period SEK -2m
- 13. 13 Net debt SEKm Sep. 30 2015 Jun. 30 2015 Dec. 31 2014 Interest-bearing debt -3,849 -3,816 -5,384 Pensions* -57 0 -1,223 Total -3,906 -3,816 -6,607 Financial receivables 1,155 1,628 1,092 Cash and cash equivalents 1,443 1,445 1,843 Net debt -1,308 -743 -3,672 Net debt/EBITDA, times 0.5 0.3 1.7 Net debt ratio, % 15 8 46 Financial preparedness 3,443 3,445 3,843 *Includes plan assets. On June 30, 2015 the plan assets exceed the estimated present value of the pension obligations and are recognized in Financial receivables. PostNord AB (publ), Q3 2015 Net debt increased by SEK 565m to SEK 1,308m – Negatively affected by revaluation of the pension liability and lower return on pension assets – Positively affected by final payment of SEK 495m related to divestment of property in Q2 Financial preparedness amounting to SEK 3,443m, of which cash and cash equivalents total SEK 1,443m
- 14. 14 Credit profile Credit Total amount SEK bn Amount utilized SEK bn Revolving credit facility, maturing in 2017, SEK 2.0 0.0 Commercial paper, SEK 3.0 0.0 Credit institutions 1.5 0.7 MTN bonds, SEK 6.0 2.9 Total utilized, Sept. 30, 2015 3.7 Credit lines with short maturity 0.0 MATURITY STRUCTURE, SEPTEMBER 30, 2015, SEKmOVERVIEW OF LINES OF CREDIT, SEPTEMBER 30, 2015 PostNord AB (publ), Q3 2015 0 500 1,000 1,500 2,000 2,500 2015 2016 2017 2018 2019 2020- Commercial papers Overdraft credit Credit institutions MTN bonds An undrawn revolving credit facility (RCF) of SEK 2.0bn is in place, maturing in 2017.
- 15. Area Key ratio Outcome, Q3 2015 Target Profitability Return on capital employed (ROCE) 7.0% 10.5% Capital structure Net debt ratio 15% 10-50% Dividend policy Dividend 2014: No dividend 40-60% of net income for the year (guide value 50%) Financial targets 15 The targets are long-term and are to be assessed over a period of 3-5 years. The financial targets were adopted at the 2014 AGM PostNord AB (publ), Q3 2015
- 16. 16 Disclaimer This document does not contain an offer of securities in the United States or any other jurisdiction; securities may not be offered or sold in the United States absent registration or exemption from the registration requirements under the U.S. Securities Act of 1933, as amended. Any offer of securities will be made, if at all, by means of a prospectus or offering memorandum issued by PostNord. Forward-looking statements Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of PostNord. Forward-looking statements herein apply only as at the date of this document. PostNord will not undertake any obligation to publicly update or revise these forward-looking statements to reflect future events, new information or otherwise except as required by law. PostNord AB (publ), Q3 2015
- 17. 17 postnord.com Gunilla Berg, CFO, +46 10 436 28 10 Per Mossberg, Chief Communications Officer, +46 10 436 39 15 Susanne Andersson, Head of Investor Relations, +46 10 436 20 86 PostNord AB (publ), Q3 2015