Interim Report January-March 2012: Major changes in a continued challenging market
• Net sales totaled SEK 9,993m (10,032).
• Operating profit totaled SEK 293m (420).
• Net profit totaled SEK 210m (344).
• Operating margin was 2.9 (4.2)%.
• Operating profit before restructuring costs and non-recurring items totaled SEK 642m (514).
• Adjusted operating margin was 6.4 (5.1)%.
Message from the CEO, Lars Idermark:
PostNord is reporting satisfactory results for the first quarter of 2012 given the circumstances. Net sales for the group developed on par with last year, and underlying profitability improved.
2012 is a year of change for PostNord. We are streamlining and implementing cost reductions in parallel with implementing major investments in the business. This is in line with our strategy to reposition the business to secure profitability within the mail businesses and develop the logistics business. Results for the first quarter were charged with a total of 354 million Swedish kronor in restructuring costs. The group’s operating margin before restructuring costs and non-recurring items was 6.4%.
The global economic uncertainty also affects the Nordic countries and our businesses. Our mail businesses are also impacted by continued high levels of digital alternative substitution. The drop in mail volumes continued during the first quarter of the year and was, considering calendar effects, on par with last quarter. Our assessment of volume decreases for full-year 2012 remains around 12 percent in Denmark and 5 percent in Sweden.
All in all, the mail businesses reported acceptable results, and profitability before restructuring costs improved markedly. We are maintaining the level of cash flows from the mail businesses. This is of great importance for the financing of the planned investments being made to reposition the businesses in relation to anticipated volume decline.
We are developing the logistics business, and continue to implement our strategy to meet businesses’ demand for end-to-end solutions and cross-border capacity. The logistics business in Norway is growing steadily, and we are gaining market share. The Swedish business is also developing well. In Denmark, however, we are challenged by tough competition, price pressure and a weak economy. We will be carrying out additional streamlining activities within the business.
We announced two major transactions during the quarter, implemented in line with our strategy. The acquisition of Green Cargo Logistics gives us a leading position within third-party logistics in the Nordic region – an attractive and rapidly growing market area. We are also taking over operations within Svensk Morgondistribution, which strengthens our position within newspaper distribution in Sweden and produces significant synergy potential.