GLS reveals revenue drop
The GLS Group has announced its results for the year – revealing a drop in revenue of EUR 100m. Despite the economic crisis, the pan-European parcel, express and logistics service provider reported only a slight decline in the number of parcels delivered. However, revenues and profits declined reflecting price pressure.
For the year ended 31 March 2010, the number of parcels delivered fell slightly from 350m to 345m whilst revenues fell from EUR 1.8bn to EUR 1.7bn. EBITA declined by 15.3% to EUR 132m representing an EBITA margin of 7.9% which compares with a prior year 8.7%.
“The results reflect tough price competition as competitors have responded to the world-wide economic recession by seeking to maintain volumes with price reductions”, said Rico Back, CEO of the GLS Group. “In some European countries and regions this has led to considerable price declines, a trend which must now be reversed.”
A fast and reliable parcel service requires well trained staff, a strong physical network and the use of modern technology, said Back. “GLS offers high quality parcel services and to support this, we continuously invest in our business even in difficult economic times. However, customers who require high quality have to be prepared to pay for it. This is why we will raise our prices in all countries.”
In 2010/11, the GLS Group plans to invest approximately EUR 50m. Investments will be made in the physical network infrastructure such as land, buildings and conveyor equipment as well as IT harmonisation and development. “Modern IT solutions play a decisive role in making it easier to communicate with consignors and consignees”, said Back. “In addition, we will continue to optimise our processes without compromising quality.”
In the current year, GLS expects the economy and the CEP market to show only a slight recovery. “The crisis is not over. Markets will change and there may be consolidation; business insolvencies and take-overs across sectors are expected in the year ahead. In view of the still uncertain economic situation we think business will stagnate in 2010/11. Nevertheless, the GLS Group will continue to strengthen its European network to support the high quality service offered and to prepare the ground for the eventual economic upturn when it comes,” said the CEO.
