Transcript Bild 1 - Posten Norge

Norway Post - Half year report
1st half-year 2010
27 August 2010
Financial highlights

Operating revenues amounted to MNOK 13 374, a reduction of
MNOK 421 (3.1 %) compared with the same period last year. The
reduction is mainly due to falling volumes in the Mail and Logistics
segments and the economic downturn


Operating revenues in the second quarter were MNOK 6 711, a
reduction of MNOK 153 (2,2 %) compared with last year.
Government procurements for the first half year 2009 were granted
and taken to income in the second quarter, while government
procurements this year were taken to income in both the first and
second quarter
Earnings before non-recurring items and write-downs amounted to
MNOK 511, an improvement of MNOK 130 compared with the first
half year 2009. The improvement was mainly due to the effects of
cost-cutting measures

EBIT before non-recurring items and write downs in the second
quarter was MNOK 64 lower than second quarter 2009. Adjusted for
the difference in recognising government procurements, the second
quarter 2010 was MNOK 66 better than last year

The 12-month return on invested capital before non-recurring items
and write-downs (ROIC) was 12.2% compared with 8.0 % in 2009

The efficiency programme ”Spinnaker” was initiated in 2008 and has
achieved an accumulated effect of BNOK 1.6 as of 30 June 2010.
There is an ongoing effort to adjust costs to a declining activity level
in the market

EBIT for the first half year was positively affected by gains on the
sale of property and the non-recurring effect from taking MNOK 516
to income in connection with the transition to a new early retirement
(AFP) scheme as of 1.1.2011

The preliminary subsequent calculations of government
procurements for 2009 shows that Norway Post has been more
successful in reducing costs than expected and that the actual need
has been reduced from MNOK 518 to MNOK 211. Norway Post is
therefore planning to repay MNOK 307. This does not affect the
2010 accounts in any significant way
2
Important events;
Merger of EDB Business Partner og ErgoGroup

ErgoGroup AS and EDB Business Partner ASA
have entered into a merger agreement to
create a leading Nordic IT company with the
capacity for increased organic growth and the
financial strength to be able to exploit
strategic and structural opportunities. The
merger plan was approved by the companies’
general meetings on July 8 2010

EDB and ErgoGroup had total revenues in
2009 of BNOK 12.7

After the merger EDB’s shareholders will own
53% of the combined company. Norway Post
will own 47 % after the transaction and has
committed to reducing its ownership to 40 %
over a two-year period

The transaction is expected to be completed
during the course of 2010 and result in
annual synergies of MNOK 250-350 in the
combined company

Approval of the merger from the competition
authorities is pending
3
Other important events

Due to a difficult winter weather-wise, volcanic ash and
challenges with the start-up of the new South-East
terminal, delivery quality for overnight A-mail was 81.8%
in the first half year of 2010. Despite this, Norway Post
was able to fulfill the other five out of six licence
requirements for the period with a good margin

The EFTA Surveillance Authority ESA has imposed a fine of
MEUR 12,89 (MNOK 102) on Posten Norge AS for violating
the EEA competition regulations. Norway Post is
considering whether to appeal the decision

In the first half year of 2010 the new South-East Norway
terminal took over the letter production from the letter
centre in Oslo. During the course of 2011 letter production
from the terminals in Drammen and Hamar will also be
transferred to the South-East Norway Terminal

Bring Logistics Solutions opened a new logistics centre at
Berger, outside of Oslo. The warehouse has the capacity
for 82 000 pallets and will replace five smaller warehouses
in the South-Eastern part of Norway

The logistic centre at Berger opened in the first half year of 2010
The divisional structure was changed in June 2010. The
Group is now organised into 4 market-oriented divisions
(incl. ErgoGroup)
4
Operating revenues per quarter
Average annual revenue growth of 4.5% (Q2 2006 – Q2 2010)
7,908
7,406
7,215
6,851
6,659
6,608
6,553
6,932
6,690
5,626
6,663
6,711
6,350
6,243
5,737
6,968
6,864
5,646
2006
2007
2008
2009
2010
Operating revenues per quarter in MNOK
5
Operating revenues from foreign subsidiaries
 Operating revenues in MNOK
+19% -3%
7,000
+50%
6,000
7,428
5,000
+140%
7,216
6,240
-3.1%
4,000
3,000
+20%
2,000
+23%
1,000
1,097
0
Operating revenues from foreign subsidiaries
decreased by MNOK 113 (3.1%) from Q2 2009,
and accounted for 26.4% of the Group’s revenues,
which is at the same level as last year
2002
1 350
2003
4,153
+7%
1,443
2004
3,645
3 532
Q2
2009
Q2
2010
1,727
2005
2006
2007
2008
2009
From Q2 2002 until Q2 2010, Norway Post’s foreign
operations had an average increase in operating
revenues of 29.1%
6
EBIT before non-recurring items and
write-downs per quarter
454
402
352
476
338
291
225
252
267
238
219
284
227
145
49
2006
2007
90
74
34
2008
2009
2010
EBIT before non-recurring items and write-downs per quarter in MNOK
7
Profit and Loss
Q2
Q2
2010
2009
Change
MNOK
YTD
YTD
2010
2009
Change
Year
2009
13 374
13 795
-422
27 104
973
848
125
1 959
511
381
130
1 021
23
126
-103
372
Non-recurring losses / (gains)
-510
-2
-508
168
EBIT
998
256
741
482
Net financial items
-116
-129
12
-284
Net earnings before taxes
881
128
754
198
6 711
6 864
-152
Operating revenues
459
526
-68
227
291
-64
22
126
-104
Write-downs
-488
7
-494
692
158
534
-58
-36
-22
634
122
513
EBITDA
EBIT before non-recurring
items and write-downs
8
Key figures

Investments in the first half year 2010
MNOK
amounted to MNOK 549, a decrease of
MNOK 114 compared to 2009

YTD
YTD
Year
2010
2009
2009
18 247
17 828
18 441
Equity
5 819
5 204
5 214
Interest-bearing liabilities
4 035
4 075
4 046
Equity ratio (%)
31.9
29.2
28.3
drawing rights, amounted to MNOK
Debt ratio (net)
0.5
0.7
0.4
4 523, compared with MNOK 4 846 at
ROIC (%) before non-recurring
items and write-downs*
12.2
8.0
10.6
3.8
2.8
3.8
Net debt/EBITDA-factor was 1.4**
Total capital
(Q2 2009: 2.1)

As of 30 June 2010, Norway Post’s longterm liquidity reserve, consisting of
market investments and unused
the same date last year
EBIT-margin before non-recurring
items and write-downs (%)
* Moving 12 month average
** Net interest-bearing liabilities MNOK 2 982 and 12 month moving
EBITDA MNOK 2 085
9
Employees
30,000
167
2,452
Number of Employees
25,000
20,000
25,851
23,566
15,000
Group 31.12.08
Acquisitions
Reduction of employees
Group 30.06.10
Quality development
(moving 12 month average)
100

Delivery quality for over night Amail was 81.8 % in first half of
95
2010 compared with 88.6 % for
the same period in 2009. This
Licence requirement
90
reduction was due to a difficult
winter weather-wise, volcanic ash,
airports closed at night and
85
challenges in relation to the
commencement of the New South-
80
East Norway terminal
75
70
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Delivery quality, moving 12 month average
11
Segment structure for Norway Post Group
group
mail
logistics
IT
12
External operating revenues per segment
Share of external revenues in%
Change 2009 – 2010 in MNOK and %
-69
-162
-2,9%
17 %
17 %
45 %
45 %
38 %
38 %
YTD 2010
YTD 2009
-209
-2,6%
-4,0%
Mail
Logistics
IT
13
Segment

Letter mail

Banking services

Dialog services
mail
logistics
IT
mail
14
Volume development
mail
logistics
IT
Mail products
% change pa.
2005
2006
2007
2008
2009
YTD
2010
Mail Norway Post Group
2.9
4.1
-1.3
-0.8
-10.6
0.1
Mail Posten Norge AS
2.7
3.7
-2.4
-3.3
-11.6
0.6
A and B mail
(Posten Norge AS)
-5.5
-0.9
-0.3
0.7
-10.1
-7.4
Direct Mail*
(Posten Norge AS)
10.7
5.5
-4.2
-6.2
-13.7
6.4
*
Addressed and unaddressed direct advertising mail
Unaddressed advertising mail accounted for 50.2% of the parent company mail volums
compared with 47.4% in 2009
15
Key figures


Total A and B mail volume was 7.4 % lower
than the corresponding period in 2009.
Falling volumes resulting from increased
electronic substitution and the economic
downturn were partly offset by price
increases
Cost-cutting measures in the Spinnaker
programme, including the new post office
structure, more effective administrative
functions, reduced IT cost and the
implementation of the Group’s productivity
system have affected results positively

Bring Citymail Sweden had an increase in
volume compared to 2009 and the company
has carried out extensive measures to
improve profitability

As of June 2010, 115 out of 124 post offices
have been converted into Post-in-shops. The
conversion has been well received by the
customers. Norway Post has also decided to
modernize its remaining post offices over a
three year period in order to meet changing
customer’s needs. By the end of second
quarter 31 post offices had implemented the
new concept
mail
MNOK
Operating
revenues
EBITDA
EBITDA margin
logistics
YTD
2010
YTD
2009
IT
Change
10 - 09
Change
%
6 200
6 451
-251
-3.9
586
525
61
11.6
9.5%
8.1%
1.4
16
Segment
 Cargo
mail
logistics
IT
logistics
 Thermo
 Express
 Parcels
 Warehousing
17
Key figures


Operating revenues in 2010 were 2.5%
lower than the same period in 2009,
mainly as a result of falling volumes and
pressure on prices within groupage/part
load and termo. The transport industry
strike contributed to the reduction in
volume
Bring Logistics Solutions opened a new
logistics centre at Berger, outside of Oslo,
in the first half year. The warehouse has
capacity for 82 000 pallets and will replace
five smaller warehouses in the Southeastern part of Norway

Revenues for the Logistic segment’s
operations outside of Norway amounted to
MNOK 2 370, which comprised 38.6% of
total revenues in the segment

The segment’s earnings were negatively
affected by the volume decline, increased
transport costs due to delays in rail
delivery, start-up costs for the new
warehouse at Berger and the transport
strike. However, the negative effects were
partly offset by cost-cutting measures
mail
MNOK
Operating revenues
EBITDA
EBITDA margin
logistics
YTD
2010
YTD
2009
IT
Change
10 - 09
Change
%
6 137
6 296
-159
-2.5
253
263
-10
-3.8
4.1%
4.2%
-0.1
18
Segment
 Operations
mail
logistics
IT
IT
 Infrastructure
 Solutions
 Consulting services
19
Key figures

Operating revenues in the first half of 2010
were 2.0 % lower than the same period in
2009, mainly due to the sale of operations
and the economic downturn in the IT market


In the second quarter, ErgoGroup again
experienced organic growth of a little over
3%, and there was growth in all service
areas, both in Norway and Sweden
Revenues outside of Norway comprised 27%
of the total revenues in the period, which is
on the same level as the corresponding period
in 2009. Sales to Norway Post comprised
13 % of total revenues, which is on the same
level as last year

ErgoGroup entered into contracts worth MNOK
2 312 during the first six months of 2010

Profitability improved within Operations &
infrastructure services, but remained
unsatisfactory in the Norwegian part of the
business. The ongoing restructuring process
within this area continues as planned

A good level of chargeable hours was
maintained within Solutions & applications
services
mail
logistics
MNOK
YTD
2010
Operating revenues
2 628
2 692
-64
-2.4
238
235
3
1.3
9.1%
8.7%
0.4
EBITDA*
EBITDA margin
YTD
2009
IT
Change
10 - 09
Change
%
*The positive effect in ErgoGroup of MNOK 84 regarding the transition to
the new AFP scheme as of 1 January 2011, was taken to income as a
non-recurring item in the segment Other as of 30 June 2010
20
Future focus areas

The Group’s earnings development is expected to
continue to be negatively affected by low demand,
price pressure and strong competition. The decline
in revenues in the first six months of 2010
compared to last year was due to a continuous fall
in volumes, but at a lower rate, and there are signs
of a flattening out and an upswing

The Spinnaker profitability programme has good
results and further cost-cutting measures will be
taken

The merger between EDB Business Partner and
ErgoGroup is expected to be completed during the
second half of 2010, and the combined company
will become a leading Nordic IT company with the
capacity for increased organic growth and the
financial strength to exploit future strategic and
structural opportunities

There continues to be a focus on long-term and
systematic work in the areas of HSE, environment
and climate
21