Posti Group Corporation Interim Report January–September 2024
Unless otherwise stated, the figures in brackets refer to the corresponding period in the previous year.
July-September
Financial highlights
Net sales decreased by 3.9% to EUR 357.9 (372.3) million.
Adjusted EBITDA decreased to EUR 50.9 (52.9) million but share of net sales remained at the same level of 14.2% (14.2%).
EBITDA increased to EUR 49.8 (46.5) million, or 13.9% (12.5%) of net sales.
Adjusted operating result stayed on a similar level at EUR 19.3 (19.9) million, representing 5.4% (5.4%) of net sales.
Operating result increased to EUR 18.2 (-50.2) million, representing 5.1% (-13.5%) of net sales. The comparison period was impacted by the impairments and other special items.
January-September
Financial highlights
Net sales decreased by 3.3% to EUR 1,117.8 (1,156.4) million.
Adjusted EBITDA increased to EUR 153.5 (133.4) million, or 13.7% (11.5%) of net sales.
EBITDA increased to EUR 143.8 (124.4) million, or 12.9% (10.8%) of net sales.
Adjusted operating result increased to EUR 58.4 (34.8) million, representing 5.2% (3.0%) of net sales.
Operating result increased to EUR 48.7 (-38.0) million, representing 4.4% (-3.3%) of net sales. The comparison period was impacted by the impairments and other special items.
Net debt to adjusted EBITDA was 1.2x (1.3x).
Operational highlights in Q3
Operational efficiency continued to develop positively which led the Group’s relative adjusted EBITDA to remain on the same level year-on-year.
Group net sales were affected by the declined volumes in Fulfillment and Logistics Services and continuous decrease in letter volumes in Postal Services.
In the eCommerce and Delivery Services segment, the total parcel volume grew by 3% (3%).
The addressed letter volumes continued to decrease by 11% (18%).
The share of mail items covered by the universal service obligation accounted for 2.6% (2.6%) of all Posti’s mail items delivered.
Posti started a new service Small Parcel to Door, where a parcel will be delivered by the recipient’s doorstep with a daily mail delivery nationwide.
All Posti Group companies are gradually starting to operate under one Posti brand from September 2024.
Service Sector Employers PALTA and the Finnish Post and Logistics Union PAU approved the result of the negotiation on the utilization of the option year in the collective agreement.
Outlook for 2024 adjusted
Posti is adjusting its outlook for 2024. Net sales are expected to decrease from the previous year. The Group’s adjusted EBITDA is expected to increase from the previous year (previously it was communicated that net sales and adjusted EBITDA is expected to be on the previous year’s level).
The new outlook states:
Posti is expecting its net sales to decrease from the previous year. The Group’s adjusted EBITDA is expected to increase from the previous year. 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
7-9 2024 | 7-9 2023 | 1-9 2024 | 1-9 2023 | 1-12 2023 | |
|---|---|---|---|---|---|
Net sales, EUR million | 357.9 | 372.3 | 1,117.8 | 1,156.4 | 1,586.1 |
Adjusted EBITDA, EUR million | 50.9 | 52.9 | 153.5 | 133.4 | 197.7 |
Adjusted EBITDA margin, % | 14.2% | 14.2% | 13.7% | 11.5% | 12.5% |
EBITDA, EUR million | 49.8 | 46.5 | 143.8 | 124.4 | 188.6 |
EBITDA margin, % | 13.9% | 12.5% | 12.9% | 10.8% | 11.9% |
Adjusted operating result, EUR million | 19.3 | 19.9 | 58.4 | 34.8 | 66.4 |
Adjusted operating result margin, % | 5.4% | 5.4% | 5.2% | 3.0% | 4.2% |
Operating result, EUR million | 18.2 | -50.2 | 48.7 | -38.0 | -7.0 |
Operating result margin, % | 5.1% | -13.5% | 4.4% | -3.3% | -0.4% |
Result for the period, EUR million | 11.9 | -53.6 | 31.5 | -48.0 | -25.2 |
Return on capital employed (12 months), % | 11.9% | -1.7% | -1.0% | ||
Net debt, EUR million | 258.3 | 255.8 | 240.0 | ||
Net debt / adjusted EBITDA | 1.2x | 1.3x | 1.2x | ||
Operative free cash flow, EUR million | -5.8 | -2.4 | 28.6 | ||
Personnel, end of period | 15,038 | 17,288 | 17,024 | ||
Personnel on average, FTE | 13,075 | 14,208 | 13,201 | 14,435 | 14,272 |
Earnings per share, basic, EUR | 0.30 | -1.34 | 0.79 | -1.20 | -0.63 |
Dividend per share, EUR | 0.80 | ||||
Dividend, EUR million | 31.8 |
Antti Jääskeläinen, President and CEO
First, I’d like to thank all the colleagues for a welcoming and warm start as the President and CEO of Posti Group. During the third quarter we continued to be agile and were able to continue the operational efficiency improvements. Our determined work in this area continued which led to a significant improvement in adjusted EBITDA during January-September. I would like to thank the entire Posti team for this achievement. In the third quarter we also saw some positive development in the parcel volumes.
The Group’s net sales decreased by 3.9% to EUR 357.9 million (372.3) in the third quarter and by 3.3% to EUR 1,117.8 (1,156.4) million in January-September. Our adjusted EBITDA decreased to EUR 50.9 (52.9) million during the third quarter but increased to EUR 153.5 (133.4) million during January-September.
In the third quarter eCommerce and Delivery Services’ net sales increased slightly while the adjusted EBITDA remained stable year-on-year. The parcel volumes increased, which contributed positively to the segment’s net sales. Low customer demand affected the overall volumes negatively in the Fulfillment and Logistics Services segment consequently decreasing net sales. However, the acquisition of Swedish Cargo Support in May 2024 impacted the net sales positively. Continued operational efficiency in the Fulfillment and Logistics Services improved the segment’s adjusted EBITDA. The declining trend of the letter volumes in the Postal Services continued as expected and this impacted net sales negatively. Also, the segment’s adjusted EBITDA decreased in third quarter.
The third quarter presented us many exciting and positive developments. In September the Service Sector Employers association PALTA and the Finnish Post and Logistics Union PAU approved the results of the negotiation on the utilization of the option year in the collective agreement. This was a result of a constructive negotiations and will now allow us to fully focus on the upcoming peak season. I was also happy that after a successful pilot period, we launched the new Small Parcel to Door service nationwide utilizing our Postal services distribution network. In September we took an important step towards a more unified Posti as we announced the transition of all our companies in Finland, Sweden and in the Baltics to operate under one Posti brand. This allows our customers to easily access a vast range of logistics solutions under one roof, therefore supporting our growth.
We were again invited to participate in the UN General Assembly in September as part of Finland’s official delegation. We engaged in an important discussion on the 2030 Agenda for Sustainable Development with other leaders from around the world. At Posti we have always committed to respecting internationally recognized human rights and strived to prevent adverse human rights impacts caused by our own operations. During the third quarter we updated our new Human Rights Principles stating our commitment, and we are expecting the same from our partners. We are committed to our goal to transport fossil-free by 2030 and we continue our work towards it.
My first couple of months at Posti have been exciting and full of interesting encounters with colleagues, customers and other stakeholders. As we have now entered the last quarter of the year, we continue to implement our strategy and strive to serve our customers well during the peak season, which is just around the corner. At this point, I already want to thank every Christmas maker in Posti for your efforts in spreading the joy to our customers.