Posten – Sales advance despite weakening economy

– Net sales totaled SEK 15,595m (15,062)
– Operating earnings totaled SEK 1,165m (1,388)
– A strong financial position put the equity-assets ratio at 39pct (36pct)
– On June 18, the Swedish parliament adopted the government’s proposal to merge Posten with Post Danmark, and on June 12 the Danish parliament approved the merger
– Lars G Nordström was appointed new President and CEO

Message from CEO

Posten’s net sales increased 4pct, mainly as a result of the acquisition of Tollpost Globe. Posten Logistics experienced organic growth of 9pct, while net sales increased 24pct including Tollpost. Stralfors’ operations in information logistics and graphics reported growth of 11pct. However, net sales for Posten Messaging fell again in the second quarter, decreasing a total of SEK 192m, or 2pct, during the first half of 2008. It is uncertain how much of a slowdown the economy will undergo and how that will affect the volumes in Posten’s core operations. However, we predict the negative trend in volumes will continue, mainly in mail operations as substitution accelerates. We are also encountering intensifying competition from international players in all core operations and across all markets where we are active.

Operating earnings totaled SEK 1,165m, SEK 223m less than for the same period the preceding year. Weaker operating earnings were attributable to lower sales for Posten Messaging and to increased costs of transportation and personnel.

We continue our long-term and goal-oriented work to strengthen the Group’s competitiveness. At Posten Messaging, rationalization efforts are underway to reduce the fixed costs in mail delivery. At the same time, we are enhancing our range of services. In June this year, the logistics operations set up an organization with a sharper geographic focus. The purpose is to offer a broader and more clearly defined Nordic logistics service while improving productivity across all product areas. Stralfors is proceeding with its European expansion, keeping productivity enhancement and streamlining high on the agenda.

In June, the Swedish and Danish parliaments voted to approve the merger between Posten and Post Danmark. Now, as the final pieces of the merger are put into place, we are working to develop an action plan. Our goal is to have a well-prepared and primed organization that is ready to realize the identified synergies and to seize upon the business benefits created by the merger.

Lars G Nordström
President and CEO