PostNord: Year−end report 2022 – Ongoing challenges require continued structural changes

Comments from Annemarie Gardshol, CEO

Fourth quarter

Sales totaled SEK 10,947 million (10,843) in the quarter, a decrease of -2 percent (-1) in fixed currency for like-for-like units. Operating income totaled SEK -20 million (762). Adjusted operating income was recorded at SEK 247 million (653). The decrease in income is attributable in the main to our Swedish business. Items affecting comparability totaling SEK 267 million consist of costs arising from restructuring of the organization.

    Throughout the year, we were affected by challenging external factors that, in combination, led to declining parcel volumes. During the quarter, our parcel volumes decreased by -4 percent (-2), while mail volumes fell -13 percent (-11). In addition, the high cost situation has persisted, although we have largely managed to offset higher transport costs via fuel surcharges and price increases.

      Operating income for the full year 2022 totaled SEK 357 million (2,481). Adjusted operating income was recorded at SEK 666 million (2,260).

Work continues on adapting the business to the challenging external environment

Our business is cyclical and broadly follows economic trends. 2022 was a year marked out by extraordinary challenges. Economic uncertainty arising from the war in Ukraine and high inflation led to higher interest rates and so reduced consumer purchasing power. We are continuing the work that was ongoing throughout 2022, which includes adjustments to our capacity and terminal network and the phasing out of unprofitable parts of our offering. We have acted decisively with price adjustments on our products, and with fuel surcharges on transportation. Our operations are characterized by high fixed costs, which makes it challenging to quickly adapt capacity to changing volume trends. The process of moving over to a more flexible model is a priority that is also taking time.
    In our Swedish business, we are launching a new business-oriented, more cost-effective and flatter organizational structure.

Investing in the climate transition and our customer offering

It is natural for us to take the lead in the climate transition in the logistics and transport sector. We have high climate ambitions, and have set a goal to be fossil-free by 2030. At year-end, 60 percent of the energy consumed in our own vehicle fleet was from renewable sources. In order to maintain a high pace of climate transition, PostNord has signed an SEK 1.2 billion loan with the Nordic Investment Bank (NIB). The loan runs for ten years and will be used to renew PostNord's vehicle fleet. The initiative is expected to result in a reduction of 20,000 tonnes of emissions per year.
     In the fourth quarter, we approved several investments in renewable fuel vehicles. In Sweden and Norway, we will invest in an additional 382 electric vehicles of various sizes from delivery vans to trucks, together with 75 biogas-powered trucks.
     Our parcel box network is expanding steadily and at year-end we had more than 9,000 PostNord parcel lockers in operation across the Nordic region. It is strategically important to be able to offer consumers this highly valued delivery option and we are planning to further expand our network.
    At the end of the quarter, we signed a new agreement for the provision of Denmark’s universal service obligation on a compensated basis. The new agreement runs until December 31, 2023. In Sweden, the main report from the Commission of Inquiry on the scope and financing of the future universal service obligation has been handed over to the government. We will take note of the conclusions and develop our position in future referral response to the Government Office.

Further information

This report, presentation material and video are available on our Group website.

Contact person: Björn Bergman, Head of Group Brand & Communication. 
This information is of such a nature that PostNord AB (publ) is obliged to make it public pursuant to the EU Market Abuse Regulation. The information was submitted, through the agency of the contact person stated above, for publication at 8:30 CET on February 1, 2023.