Swedish-Danish postal operator Posten Norden has rebranded to PostNord AB and acquired EekTransport, one of Norway’s ten largest transport and logistics companies, as its revenues and
profits declined during the first quarter of 2011 due to falling mail volumes.Following the merger of the Swedish Posten AB and Post Danmark in 2009, the group wastemporarily named Posten Norden AB with the aim to introduce a permanent and internationallymarketable name for the group later on. During the group’s annual general meeting on 15 April, thedecision was made to change the name of the parent company from Posten Norden AB to PostNordAB.
However, the names of the main operating companies, including Posten (Sweden), Post Danmark andStrålfors, will remain unchanged.
Meanwhile, PostNord AB has signed an agreement with Eek Holding AS for the cash acquisition ofEek Transport AS to complement its existing operations in Norway and strengthen the group’sposition and opportunities in the country’s growing logistics market.
As an important logistics provider in Norway, Eek Transport AS generated sales of about NOK 265million (€33.46 million) in 2010. It runs nationwide operations in Norway with its own capacity andagency collaborations, and has approximately 200 employees. Its major customers are from the autoparts and HVAC industries. Eek Transport was named 2010 Transport Company of the Year by theNorwegian Hauliers’ Association.
PostNord is currently active in the Norwegian logistics market through its wholly-owned companyTollpost Globe AS. With sales of NOK 2.4 billion (€303 million) in 2010, 900 employees and 800drivers, Tollpost Globe is Norway’s third-largest transport company. The acquisition of EekTransport complements PostNord’s existing operations and customer portfolio in Norway providingpotential synergies within sales, production and administration.
“With the Nordic region as its home market, PostNord will be the leading communication andlogistics operator in Northern Europe. An important component in achieving this goal isparticipating in collaborations and making acquisitions when we see the opportunity to strengthenour offer and our position. With the acquisition of Eek Transport, we are complementing ouroperations in Norway and strengthening our position and our opportunities in the country,” saidLars Idermark, President and CEO of PostNord.
Henrik Höjsgaard, head of Logistics at PostNord, commented: “Through Tollpost Globe, PostNordcurrently has a successful logistics business in Norway. With the acquisition of Eek Transport, weare enhancing our attractiveness as a supplier in the growing Norwegian logistics market andstrengthening our Nordic network.”
During the first quarter of 2011, PostNord saw revenues drop by 8% to SEK 10,032 million (€1,119million) which was an organic decline of 3% excluding currency changes. Operating profits fell 21%to SEK 420 million (€46.82 million) which equals a decrease of 8% excluding structural and currencychanges. Net profits declined 18% to SEK 344 million (€38.35 million) and the operating margin fellto 4.2%.
Overall, the group’s net sales fell during the quarter due to the strong Swedish krona and theprevailing competition for mail from digital alternatives and other market players for mail in bothSweden and Denmark.
At a divisional level, revenues at Mail Sweden (Posten) dropped 2% to SEK 3,886 million (€433.24million) while its operating profit declined even further by 7% to SEK 280 million (€31.21million). The continued strong Swedish economic recovery is reflected in PostNord’s volumes for andincome from non-priority mail and UDM, as well as in the logistics operations in Sweden.
In contrast, the continued weakness of the Danish economy, combined with heavy competition, hada negative impact on Danish operations. Mail Denmark (Post Denmark) revenues fell 21% to SEK 2,406million (€268.21 million), which was a 10% organic decline as operating profits fell dramaticallyby 79% to SEK 57 million (€6.35 million).
“Our Danish mail operations report a significant and accelerated drop in volumes as well asreduced income, reflecting a wave of a communication digitalisation on the part of governmentauthorities and large companies in Denmark. The provisions of the new Danish Postal Act allow BreveDanmark to use a new, more diversified price model that more closely links price to productioncost, and also improves efficiency potential,” Idermark explained.
The Logistics division had revenues of SEK 3,037 million (€338.54 million), down 4% on areported basis and 5% lower on an organic basis. It recovered from the last year’s loss of SEK 2million (€0.22 million) with its profits rising to SEK 50 million (€5.57 million).
The group continued to reduce costs during the quarter, but this did not entirely compensate forthe downward trend in sales.
“To meet the market changes, we are focusing on business and service development. We willcontinue to actively develop the underlying business. PostNord will also demonstrate the power ofinnovation and will grow where we see opportunities to develop new, profitable business. We willinvolve ourselves in partnerships or make acquisitions where we see that we can strengthen ouroffer or our position,” Idermark added.
“The market trend and the group’s earnings for the first quarter of the year also illustrate theimportance of continued, sweeping cost adjustments to counter the major and rapid changes and toimprove profitability,” he concluded.
