Strong first quarter 2019 in challenging times

First quarter 2019*

• Net sales totaled SEK 9,471m (9,102), an organic increase of 2%.
• Operating income totaled SEK 162m (−74).
• Net income for the period was SEK 56m (−167).
• Earnings per share were SEK 0.03 (−0.08).
• Cash flow from operating activities totaled SEK 435m (−25).

*Figures presented for comparison have not been restated in accordance with IFRS 16 Leases.

Message from Annemarie Gardshol Acting CEO

PostNord, now under the stewardship of Acting CEO Annemarie Gardshol, today reports its results for the first quarter 2019. PostNord needs to continue to adjust at an even faster pace for both the shrinking mail market and the growing parcel market, without sacrificing quality or service. In April, a number of changes were made at top management level and the then CEO and CFO departed from the Company. To meet the challenges from external changes in society, and thereby strengthen PostNord’s leading position in the Nordic region, our new management is now working on a plan to effect the necessary changes.

“I’ve worked at the Group for seven years, and I feel great pride in all our outstanding employees who go to work every day with a real will to make a difference. I sense that there’s a desire to make things right at the Company. People want nothing more than together to succeed in the huge journey of change that we’re on, to regain the trust of customers and the public and to bring our products and services to the attention of more people,” says Acting CEO Annemarie Gardshol.

The first quarter 2019 shows a strong improvement in income, and growth.

“Although it’s been a challenging period, with continued digitalization in the mail market, it’s a pleasure to announce a strong improvement in income. After a number of years of falling sales, we’re growing again. This has been made possible by robust growth in e-commerce logistics, but also by a certain slowing in the decline of volume in mail, compared with earlier quarters. To a certain extent, we’re also seeing a certain flow-back of customers from competitors on the mail side in Sweden, which of course is pleasing,” says Acting CEO Annemarie Gardshol.

PostNord’s main focus is on helping to make everyday life easier, in line with consumer expectations. The ambition is increasingly to offer the delivery method that best suits the individual consumer’s needs in any situation. To meet, improve and simplify the customer experience, we introduced several e-commerce related solutions during the quarter.

“In March, we began a test project in Denmark with 200 digital parcel lockers, called “Nærboks”, in partnership with the SwipBox company. The lockers, mostly located close to the home, are used with the PostNord app to provide a totally new infrastructure for simple, eco-friendly and convenient delivery. If the outcome of the trial is positive, parcel lockers will be rolled out all over Denmark and, in a slightly longer term, in the other Nordic countries. Another simplification that we’ve introduced is track-and-trace for our Varubrev product in Sweden. A delivery notification is now sent via SMS or the app as soon as the Varubrev item is posted. A further example is same-day delivery, which we launched as a test project in Sweden with the retail chain Lager 157, as the SameDay service. We have plans to make the service permanent and extend it to more businesses in 2019,” says Annemarie Gardshol.

To meet expectations, initiatives are also in progress to expand capacity.

“To handle the growth in parcels, going forward, PostNord will be investing in more parcel terminals. Recent investments include two separate terminals for parcels and third-party logistics in Helsingborg, new delivery vehicles and more than 700 additional service partners in Denmark and Sweden for increased availability. PostNord also maintains dialogue with e-commerce customers to adapt our offers so that terminals and vehicles can be used more efficiently 24/7. The benefits are increased capacity, reduced environmental impact and more delivery options,” says Annemarie Gardshol.

The accelerating process of digitalization in Sweden demands realignment of the service offering and a more cost-efficient production model. PostNord’s adjustments to an ongoing decline in mail demand are continuing with the aim of minimizing negative impact on our financial results.

“Although the first quarter was a relatively strong one overall, the future still looks challenging for our mail business, and it will be challenging to compensate for that case simply through internal actions. Transformation of an organization of this size takes time if it is to be done responsibly, without jeopardizing quality. Against that background, we must have a flexible, predictable and sustainable system of regulation in Denmark and Sweden,” says Annemarie Gardshol.

The current system of regulation is not sufficiently flexible and predictable to meet future developments. If we are to be able to maintain a long-term postal service for everyone throughout both Sweden and Denmark, the system of regulation needs to be brought up to date. Our decision-makers should make clear what kind of postal service is to be provided to our citizens, and how it is to be financed. We are engaged in positive dialogue with both Swedish and Danish governments on this point.

Our goal-focused work of improving trust in PostNord continues and has been given top priority.

“Certain improvements in trust ratings are evident, but are still far from an acceptable level. Our objective is to achieve this by maintaining a high level of delivery quality, being responsive to customer needs and delivering innovative customer- and consumer-led services. Via the initiative, we are obtaining direct feedback on our deliveries. The feedback is applied in our day-to-day focus on improvement,” says Annemarie Gardshol.

The improvement in delivery quality in our logistics products is maintaining an acceptable trend and mail quality during the quarter was good in both Swedish and Danish operations.

In Europe’s biggest brand survey focusing on sustainability, PostNord was recently named by consumers as the most sustainable logistics brand in the industry. This provides confirmation that the Group is on the right track with our sustainability work.

For further information, please contact PostNord Media Relations, tel: 46 10 436 10 10, e-mail: press@postnord.com      

Contact person: Thomas Backteman. This information is such that PostNord AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 12:30 p.m. CET on April 24, 2019.  

We deliver! PostNord is the leading supplier of communication and logistics solutions to, from, and within the Nordic region. We ensure the provision of a postal service to households and businesses in Sweden and Denmark. With our expertise and strong distribution network, we develop the conditions for tomorrow’s communication, e-commerce, distribution and logistics in the Nordic region. In 2018, the Group had around 30,000 employees and sales of just over SEK 37 billion. The Parent Company is a Swedish public limited company with Group headquarters in Solna, Sweden. Visit us at www.postnord.com