Year-end Report 2010: Improved operating profit despite declining volumes
- Operating profit totaled SEK 1,375m (284), up 28% excluding structural and currency changes
- Continued improvements in operating profit during fourth quarter of 2010. Operating profit up 44%, excluding structural and currency changes
- Net sales totaled SEK 41,669m (44,633)
- Profit before tax totaled SEK 1,348m (2,439)
- Net profit totaled SEK 1,031m (196), excluding participations in the earnings of and capital gains from the sale of bpost (formerly De Post-La Poste) in July 2009
- Net profit totaled SEK 1,031m (2,414)
- The Board proposes an ordinary dividend, in accordance with the company’s dividend policy, of SEK 600m (1,440) as well as an extraordinary dividend of SEK 400m (0)
- Lars Idermark appointed new President and Group CEO
Message from the CEO, Lars G Nordström:
2010 was a year of increased profit for Posten Norden, and operating profit was up by 28 percent excluding structural and currency changes. Our efforts to adjust costs have been successful and have served to streamline production and administration as well as capture synergy effects from the merger according to plan. We can confirm that we have accomplished an essentially successful Nordic merger while warding off the recession and successfully adapting operations to changed market conditions.
We operate on a market where competition is fierce and where substitution drives down letter volumes. The communication and logistics businesses are both impacted by pressure on prices. Yet there was an economic recovery in 2010 – particularly in Sweden and Norway – and demand for our services strengthened in these countries. Meanwhile, the economy in Denmark remains weak.
Low economic activity and widespread substitution in Denmark resulted in reduced sales for Breve Danmark, while operating profit was appreciably strengthened by significant cost adjustments. The economic upswing had a clear impact on Meddelande Sverige, and volumes were up for non-priority letters and direct mail. Sales fell somewhat, but the business area’s results improved. Earnings remained negative within business area Information Logistics despite comprehensive cost reductions, but were an improvement over last year. Thanks to the economic upswing and a rise in e-commerce, business area Logistics was able to report revenue growth for the full year despite price pressure and overcapacity. Successful efficiency measures contributed to Logistics’s return to profitability.
The group has decided to invest in a new terminal structure in central and northern Sweden, which will make us more competitive, reduce our environmental impact and improve our ability to meet the universal service obligation in Sweden. During 2010 and early 2011, new postal legislation came into effect in both Denmark and Sweden. The new Danish law is an important milestone and entails deregulation of the Danish postal market and securing universal service obligations. The new Swedish Postal Services Act does not provide the group with the same opportunities as the Danish law does in terms of meeting service needs and countering price changes in the market.
Posten Norden shall be the first choice among customers for sending and shipping items to, from or within the Nordic region. The prerequisites for achieving this were further bolstered in 2010 through increased customer satisfaction and profitability.