TNT update on 'Focus on Networks' strategy – UK tax matters settled, Dividend pay-out up to 40 pct by 2010, Next tranche share buyback of EUR 100 million announced
Key announcements by the Board of Management include:
– The outlook for the year 2007 is confirmed;
-The Express business segment sharpens its growth objectives for the period 2008-2012 and enhances transparency by adding objectives for its emerging platforms;
– The Mail business gives an update on the negotiations with the unions regarding the restructuring in Mail Netherlands and refines the objectives for its emerging businesses to include Parcels and European Mail Networks;
– TNT indicates restructuring charges in a range of GBP 125-175 million in Mail for the period 2007-2009, following earlier announcements, leading to GBP 150 million savings in 2008/2009, growing to GBP 360 million annually as of 2015;
– The indicated range includes all charges for the earlier announced Master plans and restructuring of Parcels UK;
– The recent protectionist developments on postal liberalisation in Germany have led to a full revision of TNT’s position in the German mail market, with further restructuring as a possible outcome;
-TNT has notified the appropriate Government authorities in The Netherlands about its concerns that there is clearly no level playing field in Germany and the UK;
-The Group has begun to investigate further accelerated growth in the shifting competitive environment of delivery networks;
As for the financial strategy, TNT makes various announcements, of which the main ones are:
– Sharper and more transparent financial objectives for all businesses;
– The objective to reduce the effective tax rate from 32 pct in 2006 to a range of 25-26 pct by 2010;
– The intention to grow the dividend pay-out from today’s ~35% of normalised net income to 40 pct by 2010. Including the underlying growth of TNT’s earnings, this will further fuel the growth of cash returns per share;
– An additional tranche of EUR100 million of share buybacks, under the earlier announced EUR 500 million programme, on top of the EUR 200 million currently underway.
In its financial strategy, TNT will continue to drive value aimed at its shareholders and other stakeholders in the short, medium and long term. This will include incidental share buybacks from excess cash going forward.
Warning about forward-looking statements
Some statements in this press release are “forward-looking statements”. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are outside of our control and impossible to predict and may cause actual results to differ materially from any future results expressed or implied. These forward-looking statements are based on current expectations, estimates, forecasts, analyses and projections about the industries in which we operate and management’s beliefs and assumptions about future events. You are cautioned not to put undue reliance on these forward-looking statements, which only speak as of the date of this press release and are neither predictions nor guarantees of future events or circumstances. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
