Year-end report 2011: New strategic direction for PostNord
October - December 2011
- Net sales totaled SEK 10,528m (10,871).
- Operating profit (EBIT) totaled SEK 645m (132).
- Net profit totaled SEK 441m (61).
- Operating margin (EBIT) was 6.1 (1.2) %.
- Net sales totaled SEK 39,466m (41,669).
- Operating profit (EBIT) totaled SEK 1,571m (1,375).
- Net profit totaled SEK 1,225m (1,031).
- Operating margin (EBIT) was 4.0 (3.3) %.
- The Board proposes a dividend of SEK 368m (1,000).
Message from the CEO, Lars Idermark:
PostNord reported satisfactory results for 2011 given the market situation. Net sales were down 3 percent for the fourth quarter and 5 percent for 2011. Market trends were met with the continued and successful cost adjustments and ongoing streamlining activities. We reduced our operating expenses by a total of SEK 2.2 billion during the year. The operating margin was 6 percent for the fourth quarter and 4 percent for the full year.
Group performance was strongly marked by domestic economic trends in the Nordic countries and by ongoing structural changes for mail operations with falling mail volumes. The sharp decline in mail volumes continued during the fourth quarter in Denmark, while the decrease in volumes has not yet been as dramatic in Sweden. Due to the growing number of available forms of communication and the prevalence of digitalization, we expect mail volumes to continue their sharp decline in coming years, in both Denmark and Sweden.
Despite improved results, underlying profitability is under pressure and there is a great need to restructure PostNord’s operations in the next few years. The economic trend for 2012 is also subject to great uncertainty.
A cost reduction program was launched during the fall. The program will reduce the group’s central administrative costs by SEK 1 billion by the close of 2012. This will be achieved on top of cost reductions in the businesses.
A new corporate strategy for the group’s development through 2015 was established, involving the repositioning of PostNord. We will implement major changes and make significant investments in production and infrastructure in the mail business to improve flexibility, efficiency and profitability. We will expand our logistics operation profitably – organically and through potential acquisitions – to further broaden our offer and take the position as Nordic market leader.
Implementation of the strategy means that our operating profit will be burdened with significant non-recurring restructuring costs in 2012 and 2013.
The changes that will be needed to adapt the operations to market trends will impact many people. They will also set us on a new and exciting path that we will travel along with our customers, and will open up new structures and business opportunities. The changes also improve our potential for growth and profitability and better enable us to deliver continued high levels of service and quality in accordance with the requirements under which we operate.