Interim report January-June 2013: Increased net sales – strong development in logistics
- Net sales totaled SEK 9,757m (9,487).
- Operating profit totaled SEK -84m (-142).
- Net profit totaled SEK -80m (-153).
- Cash flows from operating activities totaled SEK -17m (472).
- Net sales totaled SEK 19,589m (19,480).
- Operating profit totaled SEK 249m (188).
- Net profit totaled SEK 105m (55).
- Cash flows from operating activities totaled SEK 375m (763).
Message from K. B. Pedersen, acting President & CEO:
Due to growth within the Logistics business, PostNord reported increased net sales for the second quarter of 2013. Mail volumes continued to fall, calling for additional streamlining of the businesses and changes to national postal legislation. Political steps have been taken in Denmark towards a new Postal Act, with a parliamentary decision expected this fall.
The Roadmap PostNord 2015 corporate strategy is focused on ensuring sustainable profitability within Mail and developing our position in the logistics market. A key element of Roadmap PostNord 2015 is the streamlining and adjustment efforts being made within the business to meet long-term structural changes in the market, particularly competition from digital mail alternatives. In order to achieve the goal of reducing the underlying cost base by approximately one billion SEK in 2013, further cost reductions are now being implemented.
Despite the fact that the April-June period is normally a weak results quarter, operating profit improved year-on-year. Acquired businesses have been integrated satisfactorily. They developed well altogether, and made a positive contribution to the group’s operating margin during the quarter.
Net sales for Mail decreased due to continued revenue declines in Mail Denmark. Operating profit improved despite provisions for the closure of terminals in Mail Sweden. Mail volumes continued to fall in Sweden and Denmark, in line with expectations. We are making comprehensive efforts to adapt the business to lower volume levels, but in the long term this will not be enough to ensure satisfactory profitability and good postal service. The mail volume trend must be met with measures to harmonize national postal regulations with the dramatic changes in demand. A broad political majority in Denmark now supports an amendment of the Postal Act to further adapt demand for postal services to the market trend. A review is also needed in Sweden.
PostNord continues to develop the Logistics business in line with the strategy to grow under profitability. Business area Logistics now delivers over one-third of PostNord’s net sales. Net sales increased by 19 percent during the quarter and by 6 percent organically. The operating margin improved. The concluded acquisitions of Nordisk Kyl Logistik AB and Transbothnia AB complement the existing Logistics business in Sweden and further strengthen our position in the growing Nordic logistics market.
The growth of e-commerce has increased revenues from the distribution of goods within both Logistics and Mail. Among other things, group B2C parcel volumes rose 10 percent during the quarter. We also see a trend towards a stabilization of our Danish parcel operation, which has been part of business area Mail Denmark since the turn of the year.
Strålfors’ biggest market developed more weakly than expected during the quarter, and the business also made provisions for centralizing operations in Ljungby, Sweden. Net sales as well as operating profit decreased.
As previously announced, Håkan Ericsson will assume the post of PostNord’s President and CEO on October 1, 2013. He brings with him solid experience from the Nordic and international logistics and service industries.