PostNord: revenues down but strong growth in e-commerce

Nordic postal operator PostNord has seen net sales fall by 4% in Q1 against last year, mainly down to a fall in mail volumes. The operator has continued to see “strong growth in e-commerce throughout the Nordic region”.

Commenting on the drop in sales, Håkan Ericsson, the President and CEO of PostNord, said: “Our robust programme of adjustment is progressing according to plan, and cost reductions have enabled us to offset the loss of revenue.”

Expanding on the e-commerce growth, Ericsson said: “Our B2C volumes were 12.4% higher than in the corresponding quarter in 2015. PostNord is steadily consolidating its position as the first choice for e-retailers, by offering specialist know-how and offering a competitive portfolio of services that cater to all customer needs. On April 1, we launched MyPack in Europe, providing a service that enables our e-commerce customers to reach private individuals in Europe. This is made possible via our collaboration with DPD, which operates perhaps the best delivery network in Europe.

“As part of our strategy to develop a harmonized end-to-end Nordic offering, we acquired G.P. Spedition in Denmark. The acquisition boosts our total offering in heavy logistics, above all in Danish and intra-Nordic logistics. PostNord is already a major, broadly-based logistics operator in Sweden and Norway. With the expansion in Denmark and last year’s acquisition of UPK in Finland, we have rounded out our cross-border logistics offering to customers in all Nordic countries.”

Total mail volumes across the Group fell by 8% in this quarter. Group operating income fell by SEK 12 million to SEK 300m compared to the same quarter last year.

Focusing on the continuing decline in mail volumes, Ericsson said: “We are now progressively implementing our integrated production model, enabling us to increase capacity utilization and improve efficiency and service to our customers.

“It is also a matter of urgency that postal regulations should be realigned with the current business and communication landscape, in which digital modes of communication are continuing to gain ground.

“Against that background, we welcome that the Swedish government’s special inquiry recommends that the requirement for overnight delivery be changed to two-day delivery.

“As regards the price cap, the inquiry opens up the possibility of taking our volume losses into account, but at the same time proposes that Sweden’s Consumer Price Index (KPI) should be retained as a parameter. It is unfortunate since KPI doesn’t reflect the price development for the major cost drivers in our business. The final report from the inquiry is expected after the summer. In Denmark, work continues on the review of Danish postal legislation.”