Press Release


Pressure on Express volumes in an increasingly recessionary environment

Publish Date : 16 February 2009 at 08:00 CET - TNT N.V. has published its 2008 fourth quarter and full year results.

Press release Q4 2008 and Full Year Results [233kb]

Q4 2008 development

  • Express underlying* operating income at € 94 million in line with outlook update given on 4 December 2008 – Express volume trend overall clearly negative through quarter
  • Network optimisation initiatives in Express well underway; charges booked – restructuring of € 33 million and impairments of € 37 million
  • Mail strong fourth quarter helped by two extra working days
  • € 82 million provision charged in Mail regarding Postkantoren restructuring

2008: a year of two halves

  • Sharp global economic decline in second half 2008, continuing into 2009
  • A stable first-half performance was followed by a significantly weaker second half due to sharp International Express volume decline
  • Group underlying* revenues up 4.0% to € 11.5 billion
  • Underlying* operating income down 12.8% due mainly to lower results in Express
  • Net underlying* profit from continuing operations € 720 million, down 18.6%
  • Strong net cash from operating activities of € 923 million

Dividend

  • Proforma pay-out ratio at the same level as 2007 in view of current economic and financial circumstances
  • Total proforma proposed distribution to shareholders of € 0.71 per share
    • € 0.34 already paid by way of interim dividend, in cash
    • one bonus share for every 40 shares held at ex-dividend date (valued at € 0.37 based on last 3 days' volume weighted average prices)

Outlook 2009

Due to the highly uncertain macro-economic and business environment, instead of giving an outlook for 2009 on revenue growth and operating margin, TNT will provide certain indications only

  • Express: revenues expected to decline due to volume declines and lower fuel surcharge
  • Mail: as previously guided, addressed volumes in the Netherlands expected to show an increasing rate of decline
  • Additional pension P&L charge: € 40 million compared to 2008; mainly Mail
  • Approximately € 400 million total cost savings targets pursued
Key figures Q4
Underlying * As reported
Q4 2008 Q4 2007 Q4 2008 Q4 2007
€ mil € mil % Change € mil € mil % Change
Group
Revenues 3,023 3,004 0.6% 2,933 3,004 -2.4%
EBITDA 422 478 -11.7% 293 345 -15.1%
Operating income (EBIT) 319 391 -18.4% 160 253 -36.8%
Profit from continuing operations 209 252 -17.1% 61 150 -59.3%
Profit attributable to the shareholders 207 250 -17.2% 59 148 -60.1%
Net cash from operating activities 354 120 195. 0%
Express
Revenues 1,737 1,762 -1.4% 1,667 1,762 -5.4%
EBITDA 160 240 -33.3% 114 240 -52.5%
Operating income (EBIT) 94 188 -50.0% 18 188 -90.4%
Mail
Revenues 1,224 1,187 3.1% 1,204 1,187 1.4%
EBITDA 267 249 7.2% 185 116 59.5%
Operating income (EBIT) 232 216 7.4% 150 78 92.3%
* The underlying figures over 2008 are at constant currency and exclude the impact of restructuring and impairment charges in Express (€70m) and Mail (Q1 €7m and Q4 €82m), as well as an impairment of our investments in associates (€30m). The underlying figures over 2007 exclude the impact of the Mail Master plan provision of €110m and an amount of €28m, including €5m impairment, relating to Parcels UK.
Key figures FY
Underlying * As reported
FY 2008 FY 2007 FY 2008 FY 2007
€ mil € mil % Change € mil € mil % Change
Group
Revenues 11,460 11,017 4.0% 11,152 11,017 1.2%
EBITDA 1,532 1,674 -8.5% 1,381 1,541 -10.4%
Operating income (EBIT) 1,160 1,330 -12.8% 982 1,192 -17.6%
Profit from continuing operations 720 885 -18.6% 560 783 -28.5%
Profit from discontinued operations 206 206
Profit attributable to the shareholders 716 1,088 -34.2% 556 986 -43.6%
Net cash from operating activities 923 643 43.5%
Dividend per share over the year (in € cents)** 71.0 85.0
Express
Revenues 6,894 6,551 5.2% 6,653 6,551 1.6%
EBITDA 705 808 -12.7% 637 808 -21.2%
Operating income (EBIT) 464 599 -22.5% 376 599 -37.2%
Mail
Revenues 4,313 4,234 1.9% 4,245 4,234 0.3%
EBITDA 847 894 -5.3% 764 761 0.4%
Operating income (EBIT) 723 764 -5.4% 633 626 1.1%
* The underlying figures over 2008 are at constant currency and exclude the impact of restructuring and impairment charges in Express (€70m) and Mail (Q1 €7m and Q4 €82m), as well as an impairment of our investments in associates (€30m). The underlying figures over 2007 exclude the impact of the Mail Master plan provision of €110m and an amount of €28m, including €5m impairment, relating to Parcels UK.
** Dividend per share for 2008 is calculated on the basis of the cash dividend of €34 cents per share and the proforma value of €37 cents for the proposed share dividend of one share for every forty shares to be paid out of distributable reserves and based on the volume weighted average share price of 11-13 February 2009 (€14.66).

CEO Peter Bakker comments:

“The extremely tough trading conditions we saw for our Express business in the second half of 2008 are continuing into 2009 so far. Mail continued to perform robustly in 2008. At the end of 2008, TNT took € 70 million in one-off charges to achieve cost-optimisation objectives in Express and also charged an € 82 million provision related to restructuring of Postkantoren as announced earlier in the year. For 2009 we target cost cuts up to € 400 million in all of our activities, while maintaining good service quality as we weather this major economic downturn.

We will focus on cash generation in all our activities to maintain our current strong financial position. This focus has also led to the decision to maintain the dividend pay out percentage at the 2007 level and to propose to the AGM to pay the final dividend related to 2008 in stock.

In our Emerging platforms strategy, we today announce a bolt-on acquisition in Chile. Similarly, we are also announcing a clear step forward in China as we now offer a day-definite domestic service to a market increasingly opening up to more sophisticated delivery products.

2009 looks set to be a very challenging year; predictability in today's economic environment and the Express markets in particular is very limited and pressure on volumes is expected to remain high during the year. Against this background we abstain from giving an outlook for 2009.”

Page publication date: 16 February 2009 at 08:00 CET