Norway Post made a record pre-tax profit of NOK 1,424 million (€177 million) in 2005 thanks toorganic growth driven by higher sales and improved productivity as well as acquisitions. This rise
of NOK 172 million was the highest profit since the post office became a limited company in1996.Earnings before interest and tax (EBIT) totalled NOK 1,377 million in 2005, an improvement ofNOK 140 million from 2004. Non-recurring items totalling NOK 518 million relating to finalsettlement with the Norwegian Public Service Pension Fund and restructuring costs were chargedagainst EBIT. The net operating margin in 2005 was 6.9 per cent, on a par with the levelachieved in 2004. The return on capital employed (ROCE) was 26 per cent compared with 23.2 per centin 2004. Return on equity in 2005 was 22.4 per cent compared with 21 per cent in 2004.
“Norway Post’s record-breaking result for 2005 shows that we have succeeded in our growthstrategy, and that our successful restructuring efforts have yielded results,” said Dag Mejdell,Norway Post’s Chief Executive Officer. “In the future Norway Post will focus on continued growthand the development of Nordic solutions. These results will be challenged, however, by a decline inthe volumes of A and B mail and banking transactions, at the same time as the potential foradditional efficiency gains is less now than it was before. Competition in the market is growingeven though liberalisation of Norway Post’s remaining licence area has been postponed to bring itin line with the EU,” Mejdell commented.
Norway Post’s revenues rose by 11.3 per cent to NOK 19,986 million last year. The largest growthwas in the Logistics segment, where the acquisition of Nor-Cargo in 2004 had the greatestimpact. Logistics now accounts for 20 per cent of Norway Post’s revenues. Acquisitions of entitiessuch as HSD Transport AS, EuroDynamic AS, Frigoscandia AB and the Johs Lunde Group will contributeto further growth in 2006.
Turnover from the Express segment increased as a result of growth in e-commerce and mail ordertransactions. Express now accounts for 18 per cent of Norway Post’s revenues. Parcel volumesincreased by 3.2 per cent in 2005.
The total volume of letter mail in Norway increased by 2.7 per cent in 2005. While volumes of Aand B mail declined by 5.5 per cent following a shift to electronic solutions, unaddressed directmail advertising has risen by 11.6 per cent, and addressed direct mail advertising by 3.2 per centcompared with 2004. In CityMail Sweden, letter volumes rose by 4.9 per cent in 2005. CityMail willestablish separate operations in Denmark in 2006. The Post segment accounts for 52 per cent ofNorway Post’s revenues.
Basic banking services offered through Norway Post’s sales network declined by 10.5 per cent in2005. Revenues from the sale of savings and loan products show a reduction of 2.3 per cent comparedwith the previous year. The decline in banking services has resulted in a five per centreduction in the number of customers in post offices in 2005. The reduction in banking transactionsis primarily due to a transition to internet banking services and the use of payment terminals.
Revenues in ErgoGroup were NOK 2,799 million in 2005, up NOK 177 million, or 6.8 per cent, from2004. This increase is due to major new outsourcing and consultancy contracts, as well as theacquisition of, among other things, Ementor’s outsourcing operations in Norway and Sweden, ServeASA, and Løsningsarkitektene AS, which took place in the fourth quarter of 2005. Operating profitsbefore depreciation (EBITDA) amounted to NOK 391 million, compared with NOK 412 million in 2004.The Electronic services segment accounts for 9 per cent of Norway Post’s revenues.
