TPG replaces logistics chief
TPG, the Dutch postal group, yesterday replaced the head of its logistics business and announced restructuring costs, write-downs and impairment charges as it moved to improve the unit’s stuttering performance.
The company also trimmed guidance for full-year net income growth to about 5 per cent, excluding pension payments and at constant exchange rates, from 5-10 per cent, reflecting continued “sluggish” economic conditions.
Second-quarter net profit fell 1.4 per cent to Euros 143m (Dollars 162m), hit by currency movements, higher pension costs and restructuring charges at logistics, which undermined robust performances in its mail and express divisions.
The need for restructuring in the world’s second-largest logistics business by revenues was partly the result of a failure to successfully integrate small acquisitions.
Peter Bakker, chief executive, said TPG would adopt a “more cautious” acquisition policy in future.
David Kulik replaces Roberto Rossi as unit chief. Mr Rossi leaves with a Euros 1.93m pay-off, which TPG said reflected contractual obligations.
“Our conclusion is that it is time for new leadership in the division,” said Mr Bakker. Mr Kulik was chief executive of TPG’s US logistics operations and heads the restructuring programme.
The bulk of Euros 65m restructuring charges will be taken in the second half, delivering Euros 55m in annual savings within two years. It estimated up to Euros 195m in goodwill impairment and asset write-downs this year.
Logistics earnings before interest, tax, depreciation and amortisation fell 53 per cent to Euros 41m from Euros 88m in the first half, with currency movements accounting for 10 per cent of the decline. However, excluding one-off charges and currency movements, the operational shortfall compared to the same period in 2002 was only Euros 15m, TPG said.
Copyright © 2003: Financial Times Group
