TNT 3Q13 Results
By on Oct 28, 2013
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Better performance Europe Other & Americas and AMEA segments; Europe Main and Pacific lower
Amsterdam, The Netherlands, 28 October 2013
- Reported revenues €1,621m (-6.6%), reported operating income €9m (3Q12: €62m)
- Adjusted revenues €1,704m (-1.8%), adjusted operating income €54m (3Q12: €64m)
- Europe Other & Americas and AMEA better; Europe Main and Pacific lower results reflect demanding trading conditions
- Significant Deliver! milestones reached, with reorganisations starting in all Business Units and Head Office. Savings of €10m in the quarter; €38m provisions booked
- Adjusted operating expenses -1.3%
- Solid period end net cash €349m (2Q13: €287m)
Segments
- Europe Main: yield pressure continuing but good cost control
- Europe Other & Americas: results continue to improve, positive impact customer mix
- Pacific: negative impact significant weight per consignment decline and higher wages
- AMEA: all units ahead of prior year
- Turnaround Brazil continuing apace
Deliver! update
TNT Express’ Deliver! programme was launched on 25 March 2013 and runs through 2015. The programme is built around four priorities.
- Reshape portfolio
- China Domestic expected to be completed 4Q13
- Sales process Brazil Domestic underway and opportunities for Dutch part of TNT Fashion being explored
- Disposal process of 747s continues, though market remains soft
- Focus on distinctive service proposition
- Global marketing campaign ‘Connect us’ initiated
- Launch of web channel refresh MyTNT
- Expansion intra-Europe service
- Execute better
- Reorganisations starting in all Business Units and Head Office
- Launch new Poland shared service centre
- Savings in PUD, linehaul, real estate and general procurement
- Invest in infrastructure and IT
- RFPs for Data, Networking and Application management service provision
- Start of infrastructure investment programme in UK and AU
Deliver! related savings were around €10m in the quarter and are expected to be around €30m for the full year 2013.
Commenting on this quarter’s developments, Tex Gunning, CEO said:
‘We have made excellent progress this quarter towards realising our Deliver! objectives. We have achieved important milestones for our overhead and operational improvement projects and are seeing some first tangible benefits from the measures taken. The Deliver! programme is gaining further momentum and will contribute to our performance going forward.
While some segments are showing better performance, overall trading conditions remain demanding and visibility limited. Our ultimate goal is to make TNT Express robust for the long term. We are therefore developing further initiatives to reinforce our market and operational positions.’
2013 guidance
- Combined Europe Main and Europe Other & Americas operating results development to remain negative
- Asia Middle East & Africa to perform better than prior year
- Pacific decline in operating profits to continue
- Unallocated around €(25)m
- Brazil expected to continue to reduce losses
- Around €30m Deliver! savings expected
2015 ambitions
- The economic climate remains uncertain with limited visibility
- Assuming a return to normal economic conditions in Europe (moderate economic growth and 2% annual inflation), ambition for Europe Main and Europe Other & Americas combined to achieve an adjusted operating income margin around 8% and sales growth for the period of around 2% (CAGR)
- All other reportable segments to contribute to profitability
- Other indicators:
- €220m improvements from Deliver!
- Unallocated around €(25)m
- ETR around 30%
- Capex 2-3% of revenues (excluding additional Deliver! investments)
- Trade working capital around 8% of revenues
Year-to-date performance commentary
Year to date, adjusted revenue decreased by 2.3% and adjusted operating income by 24.2%. Adjusted operating expenses decreased 1.4%. Performance in the year-to-date period has been consistent, with ongoing yield pressure in Europe Main but an improving trend in Europe Other & Americas and AMEA.
For the full press release please see the attached file.
More detailed quarterly financial and operational information will be available asap at www.tnt.com/corporate/3Q13datasheets