Posti sees 2.5% fall in net sales

The Finnish postal operator Posti has reported that its net sales for Q4 of 2016 were €456.5 million, 5.4% up on the same quarter the year before. For the year as a whole, net sales were down 2.5% at €1.607bn.

The same winds that are buffeting the whole postal sector are having an impact on Posti too – a decline in mail volumes, digitisation, and the need to diversify in order to survive the changes in business.

In a statement issued by Posti, Heikki Malinen, Finland’s President and CEO, said; “During the past five years, Posti has gone through the most radical period of transformation in its entire history. Digitization has drastically reduced traditional communication while, at the same time, the Finnish economy and the entire logistics industry have been in a recession. It was another challenging year for the Group in 2016 but, particularly in the last quarter, there were already signs of a turn for the better.

“The Group’s net sales turned to an increase of more than 5% in the final quarter of the year. Particularly gratifying was the substantial growth achieved in parcel services, where B2C volume increased by almost 13%, boosted by e-commerce, and cross-border parcel services volume grew by more than 7%. The net sales of parcel services grew by nearly 6% in the fourth quarter.  We also saw growth in our logistics services. Organic growth was nearly 8% and the overall net sales of logistics services grew by 29% in the fourth quarter.

“Posti’s profitability in 2016 remained good in spite of the difficult market situation. Adjusted EBITDA even improved in the Mail, Parcel and Logistics Services segment. The Group’s adjusted EBITDA, EUR 126.7 million, was on par with the previous year. We are very pleased that Itella Russia finished a difficult year with a better result than previous year. OpusCapita also improved its profitability in the last quarter of the year.

“Our operating cash flow from operating activities was good at EUR 63.1 million. The consolidated balance sheet remains strong in spite of the repayment of a EUR 150 million bond late in the year. Due to the strong balance sheet, the Board of Directors proposes the payment of a significant extra dividend.

“Although Posti is Finland’s leading company in the postal and logistics industry, [the] company will continue its resolute renewal to adjust to the rapid trend of digitization in society. Digitization is inevitable, with addressed letter volumes falling by another 7% in 2016. For this reason, renewal and growth are the main focus of our strategy, which was updated last year. In spite of the decline in volume, postal services will remain a central area of our operations. Postal services are very significant to Posti’s profitability and we believe that the upcoming reform of the Postal Act will help extend the life cycle of traditional communication.

“Parcel and logistics services represent the engine of Posti’s future growth. We provide the most extensive nationwide logistics and retail network as well as a comprehensive supply chain. Last year, Posti acquired Veine and Kuljetus Kovalainen, two transport companies that specialize in temperature-controlled logistics, to support our pursuit of new growth in food logistics. It is also very significant that Posti is now part of DHL’s European parcel alliance, which improves our competitiveness in international e-commerce and parcel delivery. Higher e-commerce volumes have already had a visible positive effect on domestic warehousing services as well as the increase in the net sales of Itella Russia’s MaxiPost.”
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