TNT profit falls by 58%
TNT reported a 58% drop in year-on-year profit for Q4 2009 and an overall drop in group profit of 50% for the last financial year. The Dutch company made €25m profit in Q4, compared to €59m for the same period of 2008. Yearly profit fell from €556 to €281m, despite cost savings of €527m.
Group operating income stood at €128m (€160m in Q4 2008), including one-off charges of €191m, whilst underlying operating income was €322m, an improvement for the first time since Q2 2008, year-on-year. Net cash from operating activities was described as “strong” at € 52m.
TNT’s Express business saw a sequential improvement in Express volume development with a first year-on-year volume increase. Cost savings were reported at €60m, whilst underlying operating income was up 20.5% to €106m (€ 88m in Q4 2008).
The company’s Mail arm reported a drop in volume in the Netherlands of 5.9%, in line with global trend. Master plan savings of €33m in the quarter was reported. Underlying operating income was down 1.3% to €229m (€232m in Q4 2008).
A TNT spokesman said that the company “sees early signs of a somewhat improving trend in the economy, but remains cautious on a continuation of the economic recovery. Express volumes, revenues and results are expected to be above 2009 levels. Mail volumes and results are expected to be below 2009 levels. A continuous focus on cost and cash remains essential.”
Peter Bakker, CEO of TNT, said: “Operating results in Q4 2009 were relatively solid in a trading environment that continued to improve, leading for the first time since Q2 of 2008 to a higher group operating income than the same quarter last year.
“However, this trading environment is still clearly below 2006 economic activity levels. TNT saw positive development in core Express volumes and Parcels, as well as a robust performance in Mail Netherlands. For the full year, significant cost savings and a strong focus on cash have made us come out of the severe economic crisis as a financially and operationally stronger company.
“In the fourth quarter and the first weeks of 2010 TNT took concrete steps towards implementing the Vision 2015 strategy by, amongst others: exiting the first of a number of the European Mail Networks and simultaneously entering into a German partnership. We are also pushing forward in implementing the five focus areas as announced on the 3 December Analysts’ Meeting: Parcels, Freight, Emerging Platforms, Special Delivery Solutions and Mail NL.
“Mail succeeded in achieving an in-principle CLA with the unions in early 2010, which will be presented to the union members with a positive advice. The agreement is balanced and will give a sufficient basis for the required downsizing and efficiency improvements in Mail related to volume decline and realisation of our Master plans.
“The first weeks of 2010 make me somewhat optimistic on improving economic conditions, however, we will continue to manage our group from cautious assumptions, leading to continued strong focus on cash and cost.”
TNT also took the opportunity to unveil its plan to reduce CO2 emissions by 45% by 2020, compared to 2007 levels. Commenting on the ambitious target, Bakker said: “TNT is also pleased to announce today that we aim to improve our CO2 efficiency by 45% by 2020. With this ambitious objective, TNT substantiates its global Planet Me programme and underscores its commitment to minimise its impact on the environment.”
