Posti Group Corporation’s Financial Statements Release
October–December
Financial highlights
The Group’s net sales decreased by 6.6% to EUR 392.9 (420.8) million.
The Group’s adjusted EBITDA decreased to 35.0 EUR (36.4) million, share of net sales 8.9% (8.7%) increased. The adoption of IFRS 16 improved the adjusted EBITDA by EUR 11.9 million.The Group’s EBITDA decreased to EUR8 (33.7) million, share of net sales 8.4% (8.0%) increased. The adoption of IFRS 16 improved EBITDA by EUR 11.9 million.
The adjusted operating result decreased and amounted to EUR4 (20.5) million, or 1.4% (4.9%) of net sales. The adoption of IFRS 16 improved adjusted operating result by EUR 0.9 million.
The operating result decreased and amounted to EUR -2.8 (16.5) million, representing -0.7% (3.9%) of net sales. The adoption of IFRS 16 improved operating result by EUR 0.9 million.
Posti has adopted IFRS 16 Leases -standard on its effective date of January 1, 2019 prospectively, thus the previous periods are not restated.
Operational highlights
Service Sector Employers Palta and the Finnish Post and Logistics Union PAU accepted the settlement proposed by the National Conciliator on a new collective agreement for the postal sector on November 27, 2019. A settlement was also reached on the separate matter concerning Posti’s parcel sorting personnel. The term of the new collective agreement between Palta and PAU ends on January 31, 2022. The two-year settlement reached between Palta and PAU will help increase flexibility needed by Posti, in shift planning, for example.
The Finnish Post and Logistics Union PAU’s strike began on November 11 and continued until November 27. The strike concerned some of Posti’s services and hindered the delivery of mail. Delivery of printed items––such as letters, magazines and advertisements––was disrupted and delayed, sometimes for weeks, due to the strike. Early-morning newspaper delivery was not affected by the strike. A significant portion of Posti’s annual results is normally made during the fourth quarter. The strike had a significant negative impact on Posti’s results.
Posti has succeeded in making changes in line with its strategy, which has strengthened the shift in net sales towards eCommerce and Logistics. Parcel and eCommerce and Logistics Solutions(EUR 200.3 million) was more than Postal Services (EUR 1 million) in net sales.
The parcel volume of Finland and the Baltic countries decreased -1 % (6%), while the number of addressed letters decreased by -24% (-10%) in Finland. Mail items covered by the universal service obligation accounted for only 6.7% (7.6%) of all Posti’s mail items. Christmas greetings are still part of the Finnish Christmas tradition, but especially due to the strike, the volumes declined strongly by 30%.
Posti has significantly expanded its parcel locker network. At the end of December, the total number of Posti´s parcel lockers were 1,673. The growth has been rapid; the number of Posti's parcel lockers has increased by over 8.3% in October-December 2019.
The quality of postal deliveries has been poor in certain specific areas during the fourth quarter due to shortage of staff and recruitment challenges as well as the strike organized by PAU. Corrective actions are in place to recruit delivery staff.
Year 2019
Financial highlights
The Board of Directors proposes a dividend of EUR 29.8 million, or a dividend of EUR 0.75 per share.
As a result of the strike Posti did not reach full year guidance. According to the guidance, the group’s net sales of continued operations, excluding possible new acquisitions and divestments, was expected to increase from 2018 driven by Transval acquisition. The Group’s adjusted operating result, of continued operations, was expected to increase from 2018 due to Transval acquisition and transition to IFRS 16 accounting principles. However, group’s net sales remained flat and adjusted operating result decreased because of the strike in Q4/2019.
The Group’s net sales increased by 0.3% to EUR 1,564.6 (1,559.3) million.
The Group’s adjusted EBITDA increased to EUR 155.1 (110.8) million, or 9.9% (7.1%) of net sales. The adoption of IFRS 16 improved the adjusted EBITDA by EUR 48.2 million.
The Group’s EBITDA increased to EUR6 (104.5) million, or 9.0% (6.7%) of net sales. The adoption of IFRS 16 improved the EBITDA by EUR 48.2 million
The adjusted operating result decreased to EUR0 (47.0) million, or 2.5% (3.0%) of net sales. The adoption of IFRS 16 improved the adjusted operating result by EUR 3.9 million.
The operating result decreased and amounted to EUR 18.5 (39.3) million, representing 1.2% (2.5%) of net sales. The adoption of IFRS 16 improved the operating result by EUR 3.9 million.
Posti has adopted IFRS 16 Leases -standard on its effective date of January 1, 2019 prospectively, thus the previous periods are not restated.
Operational highlights
The parcel volume of Finland and the Baltic countries increased by 7% (10%), while the number of addressed letters decreased by 16% (9%) in Finland. Mail items covered by the universal service obligation accounted for only 4.0% (4.6%) of all Posti’s mail items.
Posti’s structural transformation continued:
Posti completed the acquisition of the in-house logistics company Suomen Transval Group Oy in January 2019 and it was included in Posti’s reporting in February 2019.
Posti divested OpusCapita Solutions in March 2019 and the OpusCapita segment is presented as discontinued operations.
In September 2019, Posti acquired E-Log Services Oy, the owner of Pakettikauppa.fi, which offers parcel and e-commerce services.
At the end of 2019, Posti sold part of its temperature-controlled transport business.
Outlook for 2020
Net sales in 2020, excluding possible new acquisitions and divestments, is expected to remain on par with the previous year. The Group’s adjusted operating result in 2020 is expected to increase from the previous year.