Posti Q4 : our parcel volumes in Finland and the Baltics grew by 47%
Posti Group has released its Q4 results revealing that the adjusted operating result has improved significantly, driven by rapid and flexible scaling of operations.
October–December
Financial highlights
- Net sales grew by 16.0% to EUR 455.9 (392.9) million.
- Adjusted EBITDA was EUR 64.1 (34.0) million, or 14.1% (8.7%) of net sales.
- EBITDA increased to EUR 56.0 (32.8) million, or 12.3% (8.4%) of net sales.
- The adjusted operating result improved to EUR 33.5 (4.4) million, representing 7.3% (1.1%) of net sales.
- The operating result improved to EUR 25.4 (-2.8) million, representing 5.6% (-0.7%) of net sales.
Outlook for 2021
The COVID-19 situation continues to make the macro economic outlook difficult to predict. Because of these exceptional circumstances, Posti’s full-year outlook includes a significant level of uncertainty.
Posti is replacing adjusted operating result with adjusted EBITDA as one of its long-term financial targets. Due to this change, Posti will also give a short-term outlook for the development of its adjusted EBITDA, in addition to net sales.
In 2021, Posti is expecting its net sales to remain at the previous year’s level, excluding possible new acquisitions and divestments. The Group’s adjusted EBITDA in 2021 is expected to decrease from the previous year. In 2020, Posti’s net sales were EUR 1,613.6 million and adjusted EBITDA was EUR 186.5 million.
The Group’s business is characterized by seasonality. Net sales and operating result in the segments are not accrued evenly over the year. In Postal Services and consumer parcels, the first and fourth quarters are typically strong, while the second and third quarters are weaker.
Turkka Kuusisto, President and CEO commented: “I am very pleased with our fourth quarter and full year 2020 result. In the fourth quarter, our net sales grew by 16% to EUR 456 (393) million and adjusted operating result improved to EUR 33.5 (4.4) million, representing 7.3% (1.1%) of net sales. I want to express my sincere thanks to every employee at Posti and our partners.
Our ambitious goal is to push our own emissions to zero by 2030. We are well on our way in reaching this goal. Last year, our own emissions already fell by 14%. The use of renewable fuels increased to 10% at the end of the year, and in total, we drove more than four million kilometers with electricity, renewable diesel, and gas. In 2020, we also committed to the Science Based Targets initiative and we are in process of submitting our targets to the SBTi for their approval.
During the last quarter, the strong customer demand of our Parcel and eCommerce services continued. The peak season starting from Black Friday and ending to Christmas was very strong for us. During this period, the Parcel and eCommerce business group broke all previous records and delivered approximately 7.7 million parcels. Overall, our parcel volumes in Finland and the Baltics grew by 47% in the fourth quarter. For our postal services, the peak season turned out to be even busier than expected. There were almost 18 million Christmas cards sent, an increase of almost 20% compared to last year. However, the overall volume of addressed letters decreased by 3% in the fourth quarter compared to the same period last year. So, despite the stronger than expected demand of season greetings, the rapid transformation of postal services continued. Regarding both the parcel and mail volumes, the comparability to the fourth quarter was influenced by the postal strike in the latter half of 2019.
Transval’s net sales grew and the business group continued to work on its efficiency during the fourth quarter. The COVID-19 pandemic impacted the operations of Aditro Logistics and the company continued to focus on improving its efficiency, especially related to its new Arlanda site. Our Freight Services grew their net sales and their turnaround program continued to deliver a significant profitability improvement. Under difficult market circumstances and due to a strong comparison period, Itella Russia’s profitability decreased in the fourth quarter.
The full year 2020 result was very strong for us, as well, thanks to the successful and flexible development of our operations, restructuring activities and cost efficiency measures. Especially the successful turnaround program in Freight Services, the fast and agile scaling of operations and the excellent performance of our Parcel and eCommerce business group were the main drivers behind this.
I want to sincerely thank our employees for their incredibly hard work and flexibility in making this happen. This was an excellent performance, especially considering the extremely high volumes during the peak season and the demanding COVID-19 circumstances. We rewarded our personnel for their outstanding work by paying some EUR 3 million in Spot bonuses, directed in particular to those employees working in our operations.
Today, we announced our revised group strategy. Tomorrow’s Posti is a modern delivery and fulfillment company with progressive profitability. The core of our growth is in parcels and contract logistics in Finland, Sweden and the Baltics, along the entire delivery and fulfillment value chain. In a rapidly changing operating environment, a success requires industry-leading operational efficiency, ongoing reassessment of our business portfolio and integrated value chain that covers both logistics outsourcing and eCommerce.
The market transformation during the last decade has been drastic and it has challenged us in many ways. While building future growth, we need to manage the unavoidable changes to our organization and businesses in a controlled and responsible way. I am confident that our revised strategy brings us clarity, and by working together in a systematic and persistent way, we have all the prerequisites to succeed.”
