TNT’s express division achieved higher volumes and operating margin in the final quarter of 2009,while the mail volume decline was in line with expectations, the Dutch group announced today in a
trading update.TNT said it continued to see a positive development of volumes in the Express division in Q42009, with higher volumes in air, road and domestic than in the same period of 2008. That quarterhad seen a dramatic slump in volumes, however.
“TNT views this as encouraging after the sharp but as of Q2 stabilising volume decline in thefirst nine months of 2009 against 2008. For the first time in 2009, the Express operating margin inQ4 was above that in Q4 2008. The focus on cost savings has contributed substantially to thisresult, while price pressure has continued,” the group said.
The “more positive” Express volume trend continued in the first two weeks of 2010, althoughprice pressure was “still noticeable”. The cost savings programmes continue to be on track tooptimise the cost base further, the company added.
TNT pointed out that it has taken significant steps since the December 3 announcement of thenew Vision 2015 strategy by setting up projects to expand its day-definite delivery services byprofitable growth in Parcels, Freight and Delivery Solutions.
In its mail business, the decline in addressed volumes in the Netherlands in Q4 2009 was inline with expectations as was operating income, helped in particular by good Master Plan savingsand strong Christmas volumes, TNT announced. The company has started planning for partnerships inthe Dutch mail business.
The agreement in principle for a new collective labour agreement (CLA) for Mail Netherlandsand implementation of Master Plan savings, including €75 million this year, will clearly contributeto offsetting the pressure caused by declining volumes, it added. The new CLA would help to achievethe 16% cash EBITDA / revenue objective, which would be necessary to ensure about €50 million ayear is available for restructuring cash requirements.
Regarding European Mail Networks (EMN), where partnerships and disposals are being sought tofree up the value of the businesses, TNT noted that it already announced various steps in January,including the termination of the addressed mail business and part of the unaddressed mail businessin Austria, the “mail alliance” agreement with German publishers and sale of the unaddressedbusiness in Germany (TNT Direktwerbung). Further steps are expected in the next few months.
In financial terms, TNT expects (non-cash) impairments for 2009 of about €150 million forgoodwill and certain assets in EMN, and about €20 million in the Express division for alreadydecommissioned planes and certain intangibles.
The Dutch group said it will give further updates on its strategy at the February 22 annualresults announcement and at its Annual General Meeting on April 8 where there will be a strategydiscussion.
