Strong parcel and international mail growth almost compensated for a faster-than-expecteddecline in mail volumes for PostNL, as the Dutch mail operator today reported flat revenue and
profit figures for the second quarter to 30 June.Reported revenues increased year on year by 1.6% to €1.4 billion, and reported operating incomedecreased to €79 million. However, underlying revenues in Q2 2012 were €1.02 billion, a decrease of0.2% compared to the prior year.
Underlying operating income increased by 9% to €97 million, which represents an underlyingoperating margin of 9.5%, up from 8.7% in Q2 2011. Post NL said this increase was due to the dropin mail volumes and price/mix changes in Mail in the Netherlands (€13 million), additional costsfor inefficiency and quality measures(€10 million), higher autonomous costs (€10 million) andincreased Master plan implementation costs (€6 million), more than offset by lower pension expenses(€15 million), Master plan savings (€6 million), improved contributions from Parcels andInternational (€21 million) and other items (€5 million).
The one-offs of €18 million in Q2 2012 consisted of €9 million (of which €7 million in Mail inthe Netherlands and €2 million in PostNL Other) for restructuring-related charges, €6 million forrebranding costs in Mail in the Netherlands and €3 million from results related to TNT Express inPostNL Other.
Herna Verhagen, CEO of PostNL, commented: “The second quarter continued theweaker-than-anticipated start to the year. Parcels showed good volume and revenue growth in allbusiness lines and a strong operational performance. Trans-o-flex contributed positively to revenueand results. Also, International contributed positively to overall underlying cash operatingincome.”
She said quality issues that had started in March in the company’s Mail division in theNetherlands had resulted in additional costs and in the delay of its letter mail reorganisation,both clearly impacting the Q2 performance.
“In April, the decision was taken to stop the rollout temporarily because of larger thanexpected problems resulting in quality issues,” she explained. “During my first full quarter as CEOof PostNL, my priorities were to improve quality in order to retain customers. We establishedmeasures and solutions to facilitate a controlled roll out of the letter mail reorganisation.”
She said the company was currently piloting these solutions, which it developed in dialogue withthe firm’s Works Council. “After a careful review of the results, we will take a decision withrespect to the further rollout of the reorganisation at the latest in Q4,” she added.
In terms of outlook, the company said that on the basis of its Q2 results, it expected totalrevenues to be in line with 2011, “as Mail in the Netherlands is expected to show amid-single-digit decline, rather than the previously indicated low single-digit decline, andParcels is expected to exceed the high single-digit revenue outlook due to the acquisition ofTrans-o-flex.”
Verhagen concluded: “We remain confident we will reach our longer-term savings targets. Lookingat our performance during the first two quarters of the year, we reaffirm our underlying cashoperating income outlook for the year, although we expect that the full-year result will be at thebottom half of the range. The outlook is sensitive to further developments in the rollout of Masterplans and the sale of real estate.”
