Presentation of Year-end Report 2015
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In Q4 2015, PostNord reported a 2% decline in net sales year-over-year, largely due to decreasing mail volumes and intensified competition in the logistics market, although e-commerce parcel volumes grew by 17%. Adjusted EBIT increased by 14% to SEK 501 million as a result of successful cost-saving measures, while EBITDA fell 47%. The company's net debt improved to SEK -171 million, reflecting a positive financial position despite ongoing challenges in the market.
Presentation of Year-end Report 2015
- 1. Fourth quarter 2015 February 10, 2016
- 2. 2 Overview of results PostNord AB (publ), Q4 2015 SEKm Q4 2015 Q4 2014 FY 2015 FY 2014 Net sales 10,434 10,600 -2% 39,351 39,950 -1% EBITDA 278 520 -47% 2,436 2,198 11% Adjusted EBIT 1) 501 440 14% 927 861 8% EBIT -284 -70 564 351 61% Net income for the period -337 -80 278 176 Cash flow from operating activities 921 1,290 -29% 1,670 670 Net debt -171 3,672 -171 3,672 1) Adjusted for items affecting comparability. For more information, please refer to the year-end report for 2015.
- 3. Fourth quarter 2015 3 Market trends: − Record-breaking e-commerce in run-up to Christmas, B2C parcel volumes up 17% − E-commerce in Europe increasingly cross-border − Tough competition in the logistics market − Further declines in mail volumes Swedish and Danish postal legislation inquiry ongoing Higher postage for Danish express mail from Jan 1, 2016 Relocation to cost-effective headquarters for the Danish business Adjusted organization as of Jan 1, 2016: − Communication Services business area formed from Mail & Communications business area and Strålfors’ service development business − eCommerce & Logistics business area formed from Logistics business area and Group unit eCommerce PostNord AB (publ), Q4 2015
- 4. PostNord, Group High pace of change in challenging world 4 NET SALES AND EBIT MARGIN Net sales SEK 10,434m (10,600) – Net sales fell 2%, excluding exchange rates and acquisitions – Decreasing mail volumes and prevailing tough competition in logistics market Adjusted EBIT SEK 501m (440), 4.8% (4.2) – Positive impact from implemented savings programs and good parcel volumes in Christmas shopping season – Additional measures being implemented in pace with declining mail volumes, especially 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 Reported EBIT SEK -284m (-70), -2.7% (-0.7) PostNord AB (publ), Q4 2015 -4 -2 0 2 4 6 8 10 0 2 000 4 000 6 000 8 000 10 000 12 000 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Net sales, MSEK 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 4Q'15 Sweden, priority mail Sweden, non-priority mail Denmark, priority mail Denmark, non-priority and business mail Trends in the market 5 Mail volumes fell by a total of 5% compared to Q4 2014 – 9% in Denmark – 4% in Sweden Parcel volumes rose by a total of 8% compared to Q4 2014 – E-commerce-related B2C parcels increased 17% 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 4Q'15 Parcels, total MAIL, MILLIONS OF UNITS PARCELS, MILLIONS OF UNITS PostNord AB (publ), Q4 2015
- 6. PostNord Sweden 6 0 2 4 6 8 10 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Net sales, MSEK EBIT-margin, % NET SALES AND EBIT MARGIN Net sales decreased by 1% – Mail volumes decreased by a total of 4% – Parcel volumes increased, positive growth in e-commerce and goods distribution Adjusted EBIT SEK 260m (308), 4.2% (4.9) – Mix effect with lower proportion of income for mail business has negative effect along with higher social security costs for young people and a higher sick leave – Positively affected by implemented cost-cutting programs – Continued restructuring required in pace with falling mail volumes EBIT SEK 181m (187), 2.9% (3.0) PostNord AB (publ), Q4 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 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 0 1 000 2 000 3 000 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Net sales, MSEK EBIT-margin, % NET SALES AND EBIT MARGIN Net sales decreased by 1% – Mail income decreased 6% due to a 9% drop in mail volumes – Logistics income rose 10%, due to increased parcel volumes, especially in service logistics – The market remains characterized by tough competition Adjusted EBIT SEK 27m (122), 1.0% (4.5) – Declining mail volumes had a negative impact – Higher postage for express mail from Jan 1, 2016 – Extensive cost adaptation in progress – Relocation to cost-effective headquarters for the Danish business EBIT SEK -391m (54), -14.5% (2.0) PostNord AB (publ), Q4 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 8 10 0 500 1 000 1 500 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Net sales, MSEK EBIT-margin, % NET SALES AND EBIT MARGIN Net sales decreased by 9%, and by 4% 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 – The market remains characterized by tough competition Adjusted EBIT SEK 0m (-54), 0.0% (-4.9) – Positively affected by implemented savings programs and greater flexibility, but not fully compensating for the economic slowdown EBIT SEK -9m (-65), -0.9% (-5.9) PostNord AB (publ), Q4 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 6 8 10 0 100 200 300 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Net sales, MSEK EBIT-margin, % NET SALES AND EBIT MARGIN Net sales rose by 39%, and by 5% excluding exchange rates and acquisitions – Increased volumes in parcels and pallets – Continued challenging economic situation in Finland EBIT SEK -5m (-2), -2.0% (-1.1) – Integration costs related to acquisition of the company Uudenmaan Pikakuljetus Oy (UPK) impacted negatively – Higher sales and implemented savings programs had a favorable impact on the result PostNord AB (publ), Q4 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 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 0 200 400 600 800 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Net sales, MSEK EBIT-margin, % NET SALES AND EBIT MARGIN Net sales decreased by 3%, and by 2% excluding exchange rates and acquisitions – Higher sales from new customer agreements and higher volumes from digital communication offerings – Lower sales within physical printing solutions as a result of a shrinking market Adjusted EBIT SEK 29m (14), 4.9% (2.3) – Positively affected by implemented cost-cutting programs EBIT SEK -93m (-50), -15.8% (-8.3) PostNord AB (publ), Q4 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. 11,107 SEKm 11 Trend of costs *Excluding restructuring costs GROUP’S OPERATING COSTS, SEKmTREND OF GROUP’S COSTS PostNord AB (publ), Q4 2015 0 2 000 4 000 6 000 8 000 10 000 12 000 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Personnel expenses* Transportation expenses Other expenses, depreciation and impairments* Restructuring costs *Including cost inflation -3% -1% 0% +1% 10,790 SEKm
- 12. 12 Trend of cash flow PostNord AB (publ), Q4 2015 449 472 -435 -31 0 100 200 300 400 500 600 700 800 900 1 000 FFO Change in working capital Investments Financing CASH FLOW, FOURTH QUARTER 2015, SEKm Change in working capital − Positively affected by increased trade payables at end of year − Negatively affected by lower incoming payments of receivables at end of year Cash flow from operating activities SEK 921m Investments SEK -435m − Continued tight investment structure Cash flow for the period SEK 455m
- 13. 13 Net debt SEKm Dec. 31, 2015 Sep. 30, 2015 Dec. 31, 2014 Interest-bearing debt -3,840 -3,849 -5,384 Pensions* 0 -57 -1,223 Total -3,840 -3,906 -6,607 Financial receivables 2,117 1,155 1,092 Cash and cash equivalents 1,894 1,443 1,843 Net debt 171 -1,308 -3,672 Net debt/EBITDA, times -0.1 0.5 1.7 Net debt ratio, % -2 15 46 Financial preparedness 3,894 3,443 3,843 *Includes assets under management. When the assets under management are greater than the estimated net present value of the pension liabilities, they are accounted for under the line item Financial receivables. PostNord AB (publ), Q4 2015 Net debt fell by SEK 1,479m to SEK -171m (positive net) – Positively affected by revaluation of the pension liability and higher return on pension assets Financial preparedness amounting to SEK 3,894m, of which cash and cash equivalents total SEK 1,894m
- 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 0.6 MTN bonds, SEK 6.0 2.9 Total utilized, Dec. 31, 2015 3.6 Credit lines with short maturity 0.1 MATURITY STRUCTURE, DECEMBER 31, 2015, SEKmOVERVIEW OF LINES OF CREDIT, DECEMBER 31, 2015 PostNord AB (publ), Q4 2015 0 500 1 000 1 500 2 000 2 500 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 Dec. 31, 2015 Target Profitability Return on capital employed (ROCE) 5.4% 10.5% Capital structure Net debt ratio -2% (positive net) 10-50% Dividend policy Dividend 2015: Proposal for no 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), Q4 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), Q4 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), Q4 2015