TNT has outlined its medium-term revenue goals, following the announcement yesterday of “robust”results for 2006, targeting, between 2007 and 2012, annual growth from express of 10-15% and 18% a
year from the expansion of its European mail networks.The group reported 2006 revenues of over EUR 10 billion, up 7.8% on 2005, and full-year EBITrising 11% to EUR 1.27 billion at a news conference yesterday. It forecast overall revenue growthof around 15% for this year, but said the contribution from the mail division would be in the orderof around 5%.
TNT shares continued yesterday’s fall this morning, down at lunchtime (CET) by EUR 1.11 toEUR 33.22, over 3.2% on Friday’s close. Analysts thought the fall was due to the mail business’outlook.
The group also yesterday announced a further share buyback of EUR 400 million, to start afterits AGM in April, and a proposed shared dividend of EUR 292 million, up 7% on 2005.
In TNT’s 2006 annual report released yesterday, chief executive Peter Bakker pointed out thegroup’s medium-term targets and strategy.
For the express division between 2007 and 2012, TNT expects to grow revenues 10-15% a yearand maintain an operating income margin of around 10%. (The express segment posted a record marginof 10.7% in Q4 of last year, helping the group as a whole to increase earnings before interest andtax by 11.3% to EUR 355 million during the quarter.)
To do this, TNT Express had to “expand our leading position in Europe” and “build leadingpositions in emerging markets – particularly China, India and Brazil – and special services”, saidBakker.
“For Mail between 2007 and 2012: actively maintain our strong Dutch mail position amidliberalisation; expand European Mail Networks revenues by an average of approximately 18% annually,with a margin increasing to 10% in 2012,” Bakker added.
“For TNT as a whole between 2007 and 2012: optimise our capital structure, while maintainingan investment-grade credit rating; find ways to reduce the effective tax rate and increase freecash flow.”
