Posten Norden sees profits grow despite falling volumes
Posten Norden has improved operating profit by 28% in 2010 despite declining mail volumes. The operator – created in 2009 after the merger of Post Danmark and Swedish operator Posten – recorded operating profit of SEK 1.38bn (EUR 157m), up SEK 284m (EUR 322k) from the previous year.
This was partly attributable to a successful Q4 where operating profit rocketed by 44%, excluding structural and currency changes.
CEO Lars G Nordström (pictured) added that the company had also successfully adjusted costs as well as streamlining production and administration.
However, the company recorded net sales of SEK 41.7bn (EUR 473m), down from SEK 44.6bn (EUR 506m) for 2009.
Profit before tax fell from SEK 2.4bn (EUR 27.2m) to SEK 1.35bn (EUR 153m), with net profit totalling SEK 1.03bn (EUR 117m) – excluding participations in the earnings of and capital gains from the sale of bpost (formerly De Post-La Poste) in July 2009.
Nordström said: “2010 was a year of increased profit for Posten Norden, and operating profit was up by 28% excluding structural and currency changes.
“We can confirm that we have accomplished an essentially successful Nordic merger while warding off the recession and successfully adapting operations to changed market conditions.
Posten Norden admitted that market competition was fierce, especially as a result of e-substitution.
The economy in Denmark remains weak. Posten Norden admitted the ongoing economic turbulence in Denmark, together with a widespread substitution, resulted in low sales figures at Breve Denmark, while operating profit was appreciably strengthened by significant cost adjustments.
However, the company’s position has strengthened in Sweden and Norway, as a part of the global economic recovery.
Nordström added: “The economic upswing had a clear impact on Meddelande Sverige, and volumes were up for non-priority letters and direct mail. Sales fell somewhat, but the business area’s results improved. Earnings remained negative within business area Information Logistics despite comprehensive cost reductions, but were an improvement over last year.
“Thanks to the economic upswing and a rise in e-commerce, business area Logistics was able to report revenue growth for the full year despite price pressure and overcapacity. Successful efficiency measures contributed to Logistics’ return to profitability.”
In a bid to become more competitive in the market, Posten Norden confirmed that it is set to invest in a new terminal structure in central and northern Sweden.
The new terminal will also have a positive effect on the company’s environmental efficiency, as well as improving its ability to meet the universal service obligation in Sweden
Nordström concluded: “During 2010 and early 2011, new postal legislation came into effect in both Denmark and Sweden. The new Danish law is an important milestone and entails deregulation of the Danish postal market and securing universal service obligations.
“The new Swedish Postal Services Act does not provide the group with the same opportunities as the Danish law does in terms of meeting service needs and countering price changes in the market.
“Posten Norden shall be the first choice among customers for sending and shipping items to, from or within the Nordic region. The prerequisites for achieving this were further bolstered in 2010 through increased customer satisfaction and profitability.”
On 1 March, Nordström will make way for Lars Idermark, who was previously CEO of the Swedish Cooperative Union (KF).
Posten Norden chairman Fritz H Schur praised the outgoing Nordström, announcing that with “untiring commitment” the departing President and CEO had done a “splendid job implementing the merger of two national postal groups and establishing Posten Norden while countering the effects of the economic crisis”.