TNT today announced good financial results for the third quarter of 2005, driven by strongexpress and mail growth in Europe and other markets. The logistics business, however, is facing
continuing pressure on margins.Third-quarter revenues for the Dutch mail, express and logistics group rose 8.6 per cent to3,230 million euros, while operating profit (Ebit) was up 2.1 per cent to 246 million euros. Netincome rose slightly by 0.7 per cent to 148 million euros. Over the first nine months, revenuesgrew 9.8 per cent to 9,891 million euros, operating income rose 0.3 per cent to 892 million euros,and net income increased 1.5 per cent to 551 million euros.
TNT Express increased revenues by 9.2 per cent to 1,234 million euros in the third quarter andimproved its operating profit by 37.1 per cent to 96 million euros. This increased its profitmargin from 6.2 per cent to 7.8 per cent. Over the first nine months, revenues rose 10.1 per centto 3,719 million euros, operating income was up 36 per cent at 321 million euros and the operatingmargin improved to 8.6 per cent.
The “continuing success story” of the express division was generated by high single- digitrevenue growth, “robust” pricing and successful application of the fuel surcharge along withefficiency improvements, TNT noted. In Europe, TNT Express increased revenues by a highsingle-digit percentage, with good growth in the Benelux countries, Germany, Italy, Switzerland andScandinavia and strong growth in Eastern Europe. International express remained the biggest growthfactor with double-digit growth rates. Road volume growth (+8%) outpaced air (+5%), and kilosgrowth (6%) outpaced the number of consignments (3%). In the rest of the world, revenues grew atdouble-digit rates, with China (+25%) and the Middle East (+24%) growing the fastest.
In the mail sector, TNT increased third-quarter revenues by 3.1 per cent to 906 million eurosand upped operating profits by 2.1 per cent to 147 million euros. The operating margin droppedfractionally to 16.2 per cent. Over the first nine months, revenues rose 1.8 per cent to 2,852million euros but operating profits dropped 4.4 per cent to 564 million euros. The operating marginfell to 19.8 per cent from 21.1 per cent. While Dutch mail volumes continued their decline, TNTPost’s European mail business increased third-quarter revenues by 33 per cent. TNT Post increasedoverall long-term cost savings to nearly 200 million euros.
TNT Logistics increased third-quarter revenues strongly by 14.8 per cent to 1,119 million eurosbut saw operating profits slump 66.7 per cent to just 13 million euros. The operating margindeclined from 4.0 per cent to only 1.2 per cent. Over the first nine months, the logistics divisionincreased revenues by 18.1 per cent to 3,379 million euros but saw operating profits decline by31.3 per cent to 68 million euros. Revenue growth remained largely due to consolidation of thefreight forwarding business (formerly the Wilson group). The European contract logistics businesssuffered revenue declines in the UK, Italy and France, where TNT is disposing of the bulk of itsactivities, but North America showed double-digit revenue growth.
