TNT announces Q2 results and decision to split Mail and Express
TNT has reported generally improving business conditions in the second quarter, with Express volumes significantly higher and a good performance from its Mail division. Impacted by an initial € 68 million net Master plan III provision, consolidated operating income for the second quarter was €55 miillion (Q2 2009: €178m). Underlying operating income was €211 million (Q2 2009: €201m). with profit attributable to shareholders of €3 million (Q2 2009: €81m. Underlying revenue for the Express division was up 10.3% to €150 million, with underlying operating income of €73 million (Q2 2009: €63m. Volumes returned to around 2007 levels. Underlying revenue for the Mail division dropped 2.7% to €28 million, with underlying operating income of €136 million (Q2 2009: €139m). Addressed mail volumes in the Netherlands declined by 8.4%, although parcel volumes were up more than 10%. Whilst TNT sees a modest improvement in the European economy, the global economic recovery remains fragile and caution remains warranted. The focus on costs and cash will therefore continue. Express volumes and revenues are expected to be well above 2009 levels, with operating margin improvement for the year clearly tempered by yield pressure and cost inflation offsetting some efficiency gains. TNT expects addressed mail volume in the Netherlands to decline by between 7% and 9%, due to the first full-year effect of liberalisation combined with ongoing substitution. Master plan savings of €75 million are targeted. Mail operating income is expected to be below 2009 levels, including the impact of higher P&L charges for pensions. TNT has also announced its intention to separate its Mail and Express divisions in order to position both as two strategically coherent and financially strong businesses. Internal separation is expected to be implemented by January 1st, 2011. According to CEO Peter Bakker, the reality of structurally declining postal volumes and continuing low-wage competition has forced the company to redesign how its runs its business. "We have explored the best structure to secure the continued success of our Express and Mail divisions," said Bakker. "Based on this review, we have concluded that a full separation will best serve both units. On a standalone basis, Mail and Express will be able to operate as best-in-class in their respective industries, by building on strong management and a solid capital structure to successfully implement their strategies." Before full separation can be implemented, the supervisory and management boards have more work to do, including the involvement of the works councils and approval requests to its shareholders. Quelle: eyefortransport |