Press Release


TPG achieves record results for 2000

Publish Date : 12 March 2001 at 09:09 CET - TPG has announced a net income of 526 million for the year 2000, which represents a growth of 25.5% over 1999, significantly exceeding expectations.

Highlights of the year 2000

  • Earnings per share increased by 25.0%
  • Increased margins in all three businesses
  • Continued strong growth in second half of 2000
  • Service quality best ever in Mail and Express networks

Excluding the profit on the sale of non-core business in the first half of the year, the net income was EUR 511 million, a growth of 22.0%. Operating revenues increased by 16.4% and EBIT increased by 25.3%.

Excellent full year performance

"TPG has delivered record results in 2000 with unprecedented growth in revenues and net income", the Chairman and CEO of TPG, Ad Scheepbouwer commented. "Earnings growth has exceeded revenue growth in all three businesses. Mail has achieved an improved margin despite underlying domestic mail volumes growing only slightly and has increased its next day delivery quality to 95%. Express has delivered a 5.1% margin and has operated at 6.0% in the second half of the year. Logistics has continued to provide record growth and at the same time has improved its margin to 5.8%."

Outlook 2001

The Board of Management is confident about the business performance for 2001.

Assuming stable exchange rates, TPG expects to grow net income in 2001 by 20-25% (off a basis restated for changes in the Dutch accounting rules - see details on page 5).

MAIL

The Mail division had a solid year with an improved margin and service performance. Mail volumes in the Netherlands showed little growth year on year although the underlying volume growth after adjusting for a number of one-off events in 2000, was 1.6%. Despite this slowing in volume, earnings have grown solidly by 4.2%. Looking forward, the Mail business will focus increasingly on value-added services and international expansion in pursuit of accelerated revenue growth. With this objective in mind a new organisation structure has been implemented effective 1 January 2001.

The total revenue for the Mail division is summarised as follows:

Mail operating revenues increased by 1.5% over 1999. Two working days less in 2000 compared to 1999 have had a negative effect of 0.8% on revenue growth.

Organic growth amounted to 0.9%, while the net impact of acquisitions and disposals reduced growth by 0.1%. Favourable foreign exchange effects contributed 0.7% to revenue growth.

For further details please refer to the separate business lines below.

Mail operating revenues increased by 1.5% over 1999. Two working days less in 2000 compared to 1999 have had a negative effect of 0.8% on revenue growth.

Organic growth amounted to 0.9%, while the net impact of acquisitions and disposals reduced growth by 0.1%. Favourable foreign exchange effects contributed 0.7% to revenue growth.

For further details please refer to the separate business lines below.

Domestic Mail

Domestic Mail includes collection, sorting, transport and distribution services for traditional mail, both in the Netherlands and within country borders abroad.

Revenues increased by 0.4% compared to 1999. Volumes expressed in terms of pieces decreased by 2.5% of which 0.6% was caused by lower working days when compared to the previous year and 2.0% as a result of a one-off reduction in the frequency of bank statement mailings. Underlying volume growth adjusted for these factors was 0.1%.

Acquisitions of mail activities in Italy contributed 0.7% to revenue growth.

Direct Mail

Direct Mail comprises all activities involving addressed and unaddressed advertising mail and journals both in the Netherlands and within country borders abroad. It also includes database management and other value added services in direct marketing and document handling.

Revenues increased by 3.6% compared to 1999. Organic business growth was 3.5%. Volumes expressed in terms of pieces increased by 1.1% with a strong growth in the volume of printed matter/mailings offset by a planned reduction in unaddressed volumes. The first full year impact of the acquisition of GFW Austria contributed 0.1% to revenue growth.

International Mail

International Mail comprises services for collection, sorting and distribution of international mail, parcels and valuables across national borders. It also includes international cross-border business mail services, operated around the world.

International Mail revenues fell by 0.9% compared to 1999. A negative volume effect of EUR 35 million or 5.3% resulted from the termination of a small operation in the Netherlands in the second half of 2000 due to negative returns. Positive foreign exchange effects added 4.1% to growth.

Other operating revenues were in total 6.3% higher than last year. Revenues from the Post Offices network increased by 1.6%. Revenue from the sales of fixed and financial assets in 2000 contributed 11.8% to revenue growth. The disposal of Corporate Fashion Services in 1999 reduced revenue growth by 7.1%.

The Mail division's earnings from operations increased by 4.2% to EUR 772 million. The overall operating margin improved from 20.3% to 20.8%. Next day weighted average quality of on time delivery performance in 2000 was 95%, in line with the target set.

EXPRESS

The Express division achieved an important milestone in 2000 with the achievement of an operating margin of over 5% for the first time. The successful introduction of the new yield management program, combined with the benefit of the fastest and most reliable service in the express industry, has enabled Express to deliver positive yield performances throughout 2000.

All geographic areas, with the exception of Australia, delivered solid business growth in 2000.

Total revenues in Express are summarised as follows:

Express revenues increased by 17.2% compared to 1999. Organic business growth was 8.6%. Acquisitions contributed a further 5.1% and there was an overall positive impact from foreign exchange movements of 3.5%, mainly due to a strong UK pound.

For further details please refer to the separate business lines below.

Express Europe

Express revenues in Europe grew organically by 9.4%. The 1999 acquisition of Jet Services, NVS and others added a further 4.5% to revenue growth. Positive foreign exchange movements accounted for 2.3% growth. All geographic areas in Europe performed well.

Express International

Outside Europe, underlying organic business growth was 5.3%, largely due to revenue growth in Asia. Australia experienced flat organic growth as a result of problems associated with the integration of multiple TNT divisions. The acquisition of Ansett Air Freight in 1999 added 7.5% to revenue growth.

Express earnings from operations increased by 41.1% (EUR 62 million) to 213 million. The overall operating margin improved to 5.1% from 4.3% in 1999.

LOGISTICS

The Logistics division grew at a rapid pace in 2000 fuelled by a number of new acquisitions, in particular CTI Logistx, and the securing of significant new contracts. The integration of CTI with the TNT North American business has now been completed. Despite the enormous growth in revenue, operating margins exceeded targets with an overall 5.8% margin attained in 2000. The outlook for Logistics is for continued high growth and focus on achieving a critical mass in key countries and sectors.

Total revenue in Logistics is summarised as follows:

Operating revenues of Logistics increased by 43.2% compared with 1999. Organic business increased by 7.0%, while acquisitions accounted for 31.5% of the growth. All of the underlying sectors in which TPG operate have recorded a growth of at least 30% compared to 1999.

Organic growth was adversely affected by the voluntary termination of several contracts in the UK and France. A large number of significant new contracts have been entered into, particularly in the second half of the year.

The main contributor to the acquisition growth was CTI Logistx ( 199m) which was acquired in September 2000. The other main acquisitions in 2000 were Mendy Development, Taylor Barnard Holdings, Barlatier and the Schrader Group. The full year impact of the 1999 acquisition of Tecnologistica was EUR 134m.

Favourable foreign exchange rates contributed 4.7% to Logistics revenue growth.

Earnings from operations in the Logistics division increased by 46.5% ( 40 million) to EUR 126 million. The operating margin improved to 5.8% from 5.7% in 1999.

ADDITIONAL INFORMATION

Employees

In 2000 the average number of full time employees increased from 89,641 to 95,382. The increase in full time employees is mainly attributable to acquisitions of businesses. The total number of employees at 31 December 2000 was 129,675 compared to 116,523 at 31 December 1999.

Dividend Policy

TPG intends to pay a full year dividend of NLG 0.80 per ordinary share which results in a pay-out of 30% to 35%. This pay-out ratio will be pursued subject to the financial results of TPG and an annual review.

Board of Management

Mr. Carel Paauwe will retire from the Board of Management at the Annual General Meeting of shareholders on 25 April 2001.

Accounting Policy Changes in 2001

Certain accounting policies of TPG will change with effect from 1 January 2001 to comply with new Dutch accounting rules. These will mainly impact the treatment of provisions and pension costs and have no cash consequences.

If the 2000 Consolidated Statement of Income is restated for the impact of applying the changed accounting policies, net income would have been 473 million and the net profit from continued operations (excluding the profit on the sale of non-core business) would have been EUR 458 million.

This press release is not an offer for sale within the United States of any ordinary shares or any other security of TPG. Securities of TPG, including any offering of its ordinary shares, may not be offered or sold in the U.S. absent registration under U.S. securities laws or unless exempt from registration under such laws.

Safe Harbour Statement under the Private Securities Litigation Reform Act of 1995
Certain information contained in this press release is forward looking. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. In addition to the assumptions specifically mentioned in this press release, there are a number of other factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Although not exhaustive, the following factors could cause such differences: substitution of alternative methods for delivering information for TPG's mail and express services; regulatory changes leading to further liberalization in the Dutch and European postal markets; intensifying competition in the mail, express and logistics businesses; decisions of competition authorities regarding proposed joint ventures; costs of complying with governmental regulations; impact of risks and trends in the world economy; fluctuations in fuel costs; changes in currency and interest rates; increased price transparency resulting from the adoption of the euro; changes in TPG's relationship with the State of the Netherlands; limited back-up facilities in the event of major disruptions at key sites; incidents resulting from the transport of hazardous materials; mismatches between infrastructure requirements and capacity; strikes, work stoppages and work slowdowns and increases in employee costs; and costs of integrating newly acquired businesses. You are cautioned not to put undue reliance on the forward looking statements. These factors and other factors that could affect these forward-looking statements are described in TPG's annual report on Form 20-F and TPG's other reports filed with the U.S. Securities and Exchange Commission. TPG disclaims any obligation to publicly update or revise these forward-looking statements, whether to reflect new information or future events or circumstances or otherwise.

¹ Based on the average amount of 477,146,660 ordinary shares,
including ADSs (1999: 476,612,498).
² Based on 477,311,585 ordinary shares, including ADSs (1999: 476,748,143).

¹ Based on the average of 477,146,660 ordinary shares,
including ADSs (1999: 476,612,498).
² Based on 477,311,585 ordinary shares, including ADSs (1999: 476,748,143).

Page publication date: 12 March 2001 at 09:09 CET