Posti Group Corporation Half-Year Financial Report January–June 2024
Unless otherwise stated, the figures in brackets refer to the corresponding period in the previous year.
April-June
Financial highlights
Net sales decreased by 2.3% to EUR 377.8 (386.5) million
Adjusted EBITDA increased to EUR 49.5 (38.0) million, or 13.1% (9.8%) of net sales
EBITDA increased to EUR 44.0 (36.3) million, or 11.7% (9.4%) of net sales
Adjusted operating result increased to EUR 17.9 (5.3) million, representing 4.7% (1.4%) of net sales
Operating result increased to EUR 12.4 (3.5) million, representing 3.3% (0.9%) of net sales
January-June
Financial highlights
Net sales decreased by 3.1% to EUR 759.9 (784.1) million
Adjusted EBITDA increased to EUR 102.5 (80.5) million, or 13.5% (10.3%) of net sales
EBITDA increased to EUR 94.0 (77.9) million, or 12.4% (9.9%) of net sales
Adjusted operating result increased to EUR 39.1 (14.9) million, representing 5.1% (1.9%) of net sales
Operating result increased to EUR 30.5 (12.3) million, representing 4.0% (1.6%) of net sales
Net debt to adjusted EBITDA was 1.2x (1.3x)
Operational highlights in Q2
Group net sales decreased. Weak customer demand affected especially Fulfillment and Logistics Services warehouse volumes negatively and consequently decreased net sales.
The Group’s adjusted EBITDA and operating result improved significantly. Continuous improvements in cost and operational efficiency, especially in the eCommerce and Delivery Services and Postal Services segments increased the share of the Group’s adjusted EBITDA of net sales to a high level.
In the eCommerce and Delivery Services segment, the total parcel volume grew by 5% (1%). This was driven by the improved e-commerce volumes in Finland and in the Baltic countries.
The addressed letter volumes continued to decrease by 10% (8%).
The share of mail items covered by the universal service obligation accounted for 2.6% (2.3%) of all Posti’s mail items delivered.
Outlook for 2024 unchanged
In 2024, Posti is expecting its net sales and adjusted EBITDA to be on the previous year’s level. In 2023, Posti’s net sales were EUR 1,586.1 million and adjusted EBITDA was EUR 197.7 million.
Current macroeconomic and market conditions bring uncertainty to economic projection and consumer confidence. Consumer behavior affects Posti's business and may further impact our actual results.
The Group’s business is characterized by seasonality. The net sales and adjusted EBITDA in the segments are not accrued evenly over the year. In consumer parcels and Postal Services, the first and fourth quarters are typically strong, while the second and third quarters are weaker. The postal volume decline is expected to continue. Key figures of Posti Group
4-6 2024 | 4-6 2023 | 1-6 2024 | 1-6 2023 | 1-12 2023 | |
|---|---|---|---|---|---|
Net sales, EUR million | 377.8 | 386.5 | 759.9 | 784.1 | 1,586.1 |
Adjusted EBITDA, EUR million | 49.5 | 38.0 | 102.5 | 80.5 | 197.7 |
Adjusted EBITDA margin, % | 13.1% | 9.8% | 13.5% | 10.3% | 12.5% |
EBITDA, EUR million | 44.0 | 36.3 | 94.0 | 77.9 | 188.6 |
EBITDA margin, % | 11.7% | 9.4% | 12.4% | 9.9% | 11.9% |
Adjusted operating result, EUR million | 17.9 | 5.3 | 39.1 | 14.9 | 66.4 |
Adjusted operating result margin, % | 4.7% | 1.4% | 5.1% | 1.9% | 4.2% |
Operating result, EUR million | 12.4 | 3.5 | 30.5 | 12.3 | -7.0 |
Operating result margin, % | 3.3% | 0.9% | 4.0% | 1.6% | -0.4% |
Result for the period, EUR million | 7.3 | 0.7 | 19.6 | 5.6 | -25.2 |
Return on capital employed (12 months), % | 1.6% | 7.4% | -1.0% | ||
Net debt, EUR million | 255.8 | 250.0 | 240.0 | ||
Net debt / adjusted EBITDA | 1.2x | 1.3x | 1.2x | ||
Operative free cash flow, EUR million | -7.1 | -14.3 | 28.6 | ||
Personnel, end of period | 16,592 | 19,515 | 17,024 | ||
Personnel on average, FTE | 13,396 | 14,752 | 13,264 | 14,549 | 14,272 |
Earnings per share, basic, EUR | 0.18 | 0.02 | 0.49 | 0.14 | -0.63 |
Dividend per share, EUR | 0.80 | ||||
Dividend, EUR million | 31.8 |
Timo Karppinen, Interim CEO
We again delivered strong profitability during the first half of 2024, which I’m proud to say is our best result in the past 10 years. We were prompt to respond to a declining market demand, and our long-term efforts in improving operational efficiency as well as prudent cost management are now bearing fruit. For this, I would like to thank every Posti employee.
In the second quarter, the Group net sales decreased by 2.3% to EUR 377.8 (386.5) million, whereas adjusted EBITDA increased to EUR 49.5 (38.0) million. In the first half the Group’s net sales decreased by 3.1% to EUR 759.9 (784.1) million and adjusted EBITDA increased to EUR 102.5 (80.5) million. Adjusted EBITDA growth is mainly attributable to the substantial increase in profitability in both eCommerce and Delivery Services and Postal Services. We have also invested more in automation and have optimized our delivery models, enabling us to operate more efficiently.
Looking at the first half on the segment level, eCommerce and Delivery Services’ profitability increased significantly, whereas net sales decreased due to a low consumer demand. We succeeded in improving our operations such as route optimization and introduced a more efficient way of sorting, which increased profitability. I am also pleased, that, the e-commerce parcel volumes increased. The Fulfillment and Logistics Services segment was particularly impacted by the continued weakness in customer demand, which led to low circulation of goods in warehouses. Despite this, the segment’s profitability was stable year-on-year, even though the net sales decreased. Profitability in the Postal Services increased considerably during the first half. Continued focus on cost discipline, extended automated sorting capabilities and more efficient mail delivery models improved the operational efficiency consequently increasing profitability. Postal Services’ net sales decreased due to the declined postal volumes. Overall, I am satisfied with the work we have done to achieve this result. This is a testament to hard work and dedication.
Although the overall economic growth is projected to be still ahead of us, we saw some early signs in the second quarter that the e-commerce market and level of consumer spending is starting to somewhat recover. We have been vigilant in a changing market and are well positioned when the market starts to improve. We continue to seek growth according to our strategy, and we do see the long-term market potential of e-commerce to continue positively in the Nordics.
In the second quarter we made determined progress in sustainability in line with our renewed sustainability program. A recent example of the strong integration of sustainability into our business and strategy is our new financing arrangement, the loan terms of which are tied to our climate targets, approved by the Science Based Targets Initiative. Adopting a sustainability linked loan and delivering on our ambitious climate targets will help us drive the clean transition of logistics in a profitable way. During the second quarter, we have updated our human rights impact assessment, and we are planning to launch our new human rights principles in the autumn.
Looking ahead, we will continue executing our strategy on all fronts; investing in digital services and automation, focus on cost management and keep our customers in the center of everything we do. We have now also started the preparations for the peak season and are aiming to have yet another successful one.