Itella seeks growth through e-commerce and the Russian market

Growth of digital communications threatens to halve traditional mail volumes

Itella seeks new growth and profitability in fast-growing e-commerce and the Russian market. Having renewed its strategy, Itella is investing in e-commerce services and the logistics chain by broadening its service network. The number of Posti’s service outlets in Finland will be increased to 1,700.

• Itella Group released its new vision and strategic goals today, which run until the year 2020. Customer focus now guides operations more strongly than before. Itella’s new vision is “Your first choice for postal, logistics and e-commerce services” and its mission statement is “Our main mission is to manage the flow of commerce and everyday life”.
• Underlying this is an international turning point in the postal industry, the most drastic of its kind in history. The brisk increase in the use of digital communications and the economic recession threaten to reduce the amount of traditional letter and publication distribution to half of the current amount by 2020. The change has had an impact on the demand for traditional postal work.
• Over the next years, Itella’s major goal is to ensure the profitability of operations, so that the company can make sufficient investments in growth areas and fund its universal service obligation as defined in the Postal Act. 
• The renewal of postal services also demands knowledgeable employees, especially on the service logistics side. Itella wants to be the best workplace in the industry despite the industry transition and the changes taking place.

- Ease, speed, reliability and responsibility are our key words. We are getting closer and closer to consumers. The number of Posti’s service outlets will be increased to 1,500 by 2016 and to 1,700 by 2020. People’s mobility and use of time are changing, and feedback from our customers tells us that they value flexibility and a diverse range of services. Customers can already receive services any day of the week, says Itella’s CEO Heikki Malinen.

Growth of digital communications to drastically reduce mail distribution

Half of letters distributed still contain bills, but invoicing is quickly going digital. The digitization of publications is also happening at a brisk rate. There is a risk that mail volumes will halve by the end of this decade.

- Itella cannot watch from the sidelines as this mega trend develops. Our goal is to transform the Finnish postal system to correspond to the changed behavior of customers and to preserve Itella’s financially stable position, Malinen stresses.

Itella intends to use its new strategy to raise its financial performance and profitability to a sustainable level. Without additional operations, there would be a risk of profitability dropping quickly.

- All of the company’s business operations must be profitable so that we are able to grow, make sufficient investments to secure competitiveness and finance the services that fall under the universal service obligation, says Malinen.

Growth from consumer e-commerce and the Russian logistics markets

By 2020, Itella’s main focus will shift from letter, publication and advertisement distribution to the management of e-commerce parcel flows, warehousing and goods distribution. Instead of expansion, the focus is on core business operations.

Itella seeks growth through consumer e-commerce, which is drastically increasing the distribution rates of parcels and goods. In order to accelerate growth, Itella founded a new eCommerce business unit this summer to promote e-commerce services.

The company aims to improve its profitability through growth in Russia, which, going forward, will be Itella’s second primary market alongside Finland. Itella’s Russian strategy also benefits Finnish export companies, as the expanding logistics network enables increased exports. In order to support the strategy, the company’s Russian operations will be organized from January 1, 2014 onwards into a separate business group and its resources will be strengthened.

- E-commerce in Russia is growing by dozens of percentages per year and its logistics markets offer significant growth potential for Itella. In this respect, geography is our trump card. We aim to double our net sales in Russia by 2020.

In Russia, Itella’s growth areas include the electronics and pharmaceutical industries, consumer goods and spare parts logistics. Itella aims to continue its investment in warehousing capacity and distribution.

A safe workplace that is the best in the industry

One of Itella’s strategies is to be the best workplace in the industry. Postal industry professionals will be needed in the future, too. The company is training its personnel to respond to the changing workforce needs, and will support them in finding new jobs if necessary as the demand for traditional postal work decreases.” A special focus is also being placed on occupational safety.

- We have thousands of employees who do physically demanding work in all sorts of different conditions every day. As an employer, too, occupational safety is very important to us, stresses Malinen.

Itella Information to become OpusCapita

As part of Itella’s new strategy, the Itella subsidiary Itella Information Ltd will be renamed OpusCapita Ltd as of 1 November 2013. OpusCapita, which offers automation and outsourcing services for financial management and cash flows, will aim for brisk growth in the future and toward strengthening its market position in Europe. The changes will enable the development and success of the company’s operations in its distinct growth areas.

OpusCapita will continue under the ownership of Itella as a subgroup.

Further information and interviews:

CEO Heikki Malinen
Senior Vice President, Strategy & Development Juhani Strömberg
Vice President, Stakeholder Relations Timo J. Anttila, tel. +358 400 508 540

Itella MediaDesk, tel. +358 20 452 3366

Itella is your first choice for postal, logistics and e-commerce services. We manage the flow of commerce and everyday life in 11 countries. Our net sales in 2012 amounted to EUR 1,947 million. We employ approximately 27,500 members of staff. We deliver corporate services under the Itella brand, while the Posti brand is used for services targeted at consumers in Finland. www.itella.com