Message from Håkan Ericsson, President and CEO
Positive growth in e-commerce, but sharp reductions in mail volumes and tough competition in the logistics market continue. Further cost-saving programs initiated.
Total mail volumes for the Group declined by 4% year-on-year: 6% in Denmark and 3% in Sweden. During the quarter, mail volumes were boosted by mailings in connection with personal health cards in Denmark and Sweden’s general election. The corresponding outcome for the year to date is a decline of 4% for the Group, whereof 10% in Denmark and 3% in Sweden.
Operating income for the Group improved during the quarter, to SEK 345m (242), as a result of actions taken. However, the level of profitability remains unsatisfactory and, as announced earlier, further restructuring measures will be necessary. An enhanced cost-saving program with approximately SEK 500 million in annual savings is being initiated, which will reduce the number of employees by 700-800 in administration and other support functions. The implementation of the program will start during the fourth quarter 2014, when the restructuring costs will be determined and the necessary provision made. In addition, we will be focusing on verifying further measures, mainly within production, to strengthen our long-term competitiveness.
Our work on customized services is making good progress. Within our strategic development of the logistics business, we have seen further successes for our concept. During the quarter, we signed agreements with for example CDON on coordination of their warehousing and distribution operations, and with Stadium in third-party logistics (TPL). In the heavy logistics sector, we signed an agreement with Spendrups.
In September, our new terminal at Rosersberg went on stream. It is one of the most modern terminals in the world. During construction of the facility, great care was taken to limit the environmental and climate impact; for example, the terminal’s energy supply needs are partly met by a solar power system. Volumes will be transferred in stages during 2014 and 2015.
Our integrated production operations will deliver increased cost efficiency, and a better customized service offering, which will profile us more clearly and increase our competitiveness.
Important events in July-September
2014 Extraordinary General Meeting
At an Extraordinary General Meeting held on August 25, 2014, it was resolved PostNord Logistics AB should be merged with Posten Meddelande AB and at the same time the merged company should be named PostNord Sverige AB. The purpose of the merger is to simplify the Group’s legal structure, and the intention is to complete the process by year-end.
Important events after the reporting period
PostNord is initiating an enhanced cost-saving program with approximately SEK 500 million in annual savings, which will reduce the number of employees by 700-800 people, of which the majority in Denmark, within administration and other support functions. The implementation of the program will start during the fourth quarter 2014, when the restructuring costs will be determined and the necessary provision made.
Analysis of conditions for possible divestment of the Strålfors operations
PostNord has taken the decision to analyze the conditions for a possible divestment of the Strålfors operations. PostNord is carrying out a comprehensive adjustment that demands leadership focus and financial resources. Divestment of Strålfors would free up capital and give PostNord the conditions to further focus on the adopted strategic direction. For Strålfors, a changed ownership structure could lead to better opportunities to fully participate in the dynamic development of the northern European communications market.
Changes to PostNord’s management group, Group Executive Team
Knud B. Pedersen has decided to retire from his position as Deputy CEO and Executive Vice President of PostNord AB at the end of the year. Knud B. Pedersen will also be leaving his post as Managing Director of Post Danmark A/S. As of next year, Knud B. Pedersen will serve as an advisor to PostNord’s President and Group CEO.
The legal and operative structure in Denmark will be consolidated at the beginning of next year when Head of PostNord Denmark Henning Christensen will also become Managing Director of Post Danmark A/S.
From and including January 1, 2015, group function Legal will report to the CEO. Incoming General Counsel Kristina Lilja will be a member of the Group Executive Team.
Following an analysis of the conditions for possibly divesting the Strålfors operations, as of today, Strålfors CEO Per Samuelsson will no longer be part of the Group Executive Team.
PostNord AB (publ) is required to disclose the above information under the provisions of the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.30 AM CET on October 29, 2014