Interim Report January – September 2011: Changes and efficiency efforts to counter market trends and earnings development
July - September 2011
- Net sales totaled SEK 9,195m (9,649), down 4% excluding structural and currency changes
- Operating profit (EBIT) totaled SEK 295m (450), down 27% excluding structural and currency changes
- Profit before tax totaled SEK 325m (436)
- Net profit totaled SEK 286m (363)
- Operating margin (EBIT) was 3.2 (4.6) %
- Return on equity, rolling 12-month, was 7 (4) %
- The equity-assets ratio was 47 (45) % at the end of the period
- Initiation of cost savings program to reduce administrative costs by approximately SEK 1 bn
January - September 2011
- Net sales totaled SEK 28,938m (30,798), down 3% excluding structural and currency changes
- Operating profit (EBIT) totaled SEK 926m (1,243), down 15% excluding structural and currency changes
- Profit before tax totaled SEK 1,018m (1,232)
- Net profit totaled SEK 784m (970)
- Operating margin (EBIT) was 3.2 (4.0) %
Message from the CEO, Lars Idermark:
As in previous quarters this year, PostNord’s third quarter earnings were characterized by a dramatic drop in letter volumes. Earnings were also impacted by the continued weak economic trend in Denmark and the deteriorated economic outlook in general. The Nordic e-commerce market continues to grow, compensating somewhat for drops in the mail operations and driving portions of the logistics operations. Our underlying earnings capacity is under pressure, but remains relatively stable under the circumstances. The group reported a 3.2 percent operating margin for the quarter.
The combination of a highly uncertain global economic trend and dramatic mail volume decreases presents a challenge for our business and imposes requirements for further adjustments to demand. During the third and early fourth quarter, we conducted extensive activities in several areas aimed at taking forceful action to reorganize the operations.
Such areas include group management and governance frameworks, which need to allow for greater agility in the execution of necessary changes in the business. Another area is the development of the group’s strategy, to ensure efficiency and profitability in the mail operations and profitable growth for the logistics operations.
We began work this quarter on the cost savings program that will reduce our administrative and indirect costs on all levels by approximately one billion SEK, with full effect as of 2013. We see potential efficiency improvements in the administrative function, particularly through improved coordination throughout the group.
In spite of the fact that we are implementing extensive group-wide changes, it is gratifying to note that our quality levels for mail remain high. In an international perspective, PostNord holds a leading position in terms of quality. We intend to preserve this position.
The earnings trend for the third quarter underlines the importance of implementing profound changes within the operations, so that we create the conditions necessary to counter changes in our markets. Ultimately, these efforts are aimed at ensuring satisfactory, sustainable value development for the group. The activities currently being conducted within the group will enable PostNord to be the leading communication and logistics operator in Northern Europe.
If you have any questions or require further information, please contact:
PostNord Media Relations, tel 46 8 23 10 10
PostNord was formed in 2009 through the merger of Post Danmark A/S and Posten AB. The group offers communication and logistics solutions to, from and within the Nordic region, with sales of approximately SEK 42 billion and over 40,000 employees. Operations are managed in business areas Breve Danmark (mail), Meddelande Sverige (mail), Logistics and Strålfors. The parent company is a Swedish public company headquartered in Solna, Sweden. Read more about PostNord at www.postnord.com.