Press Release

TNT Annual General Meeting of Shareholders today

Publish Date : 8 April 2010 at 08:00 CET -

  • Annual General Meeting of Shareholders – 8 April 2010
  • Update Vision 2015
    • TNT takes further steps in its earlier announced business transformation under Vision 2015 to:
      • accelerate development towards leadership in Day Definite Delivery services
      • explore the best position for its Mail business for continued success
  • Trading conditions in Q1 2010 continue to show a positive trend

Annual General Meeting of Shareholders 2010

Amongst the items on the agenda for the upcoming Annual General Meeting of Shareholders are the Annual Report 2009 (including the adoption of the 2009 financial statements), a discussion on the corporate governance chapter, the dividend proposal, the new remuneration policy for the Board of Management, vacancies and (re)appointments within the Supervisory Board, the reappointment of a member of the Board of Management and the proposed continuation of the Large Company Regime at the level of TNT N.V.

During the presentation on the developments in 2009, TNT CEO Peter Bakker will discuss the 2009 results and will give an update on the trading environment in the first quarter of 2010. During the update and discussion on Strategy/Vision 2015, the TNT CEO will give an update on the implementation of Vision 2015.

In a reaction Peter Bakker, CEO of TNT stated:

“Today we announce further steps in implementing our Vision 2015 strategy. These steps see TNT continue the transformation towards leadership in Day Definite Delivery services and furthermore aim to explore the best position for its Mail business for continued success, amongst others via partnerships or IPO. Vision 2015 is pursuing the optimal outcome for all stakeholders. Its implementation will require some time during which we will provide regular updates on our progress.”

Update Vision 2015

In its announcement of its strategy Vision 2015 on 3 December 2009, TNT made clear that the growth profile of its two businesses, Mail and Express, is increasingly different. Vision 2015 aims for TNT to continue its business transformation towards a more coherent high growth portfolio. Within its existing portfolio TNT has defined five focus areas.

Four of these focus areas are in the growth nucleus of TNT's business: Parcels, Freight, Special Delivery Solutions and Emerging Platforms. Detailed implementation plans are currently under construction with further announcements planned for later this year. Each of these focus areas offer attractive profitable growth opportunities and will further expand the leading market positions that TNT has been able to build in Europe and emerging markets over the past decade.

The full implementation of our Vision 2015 strategy in these four areas will transform TNT into a leader in the Day Definitive Delivery services. The existing combined domestic and pan-European networks will be expanded with the aim of providing the best choice to our customers. The clear target to achieve cost leadership in all parts of the networks will allow further profitable growth of volumes.
The expansion and strengthening of TNT's well-established domestic and regional networks in China, India and South America will continue to benefit from the anticipated fast growth of these local economies.
For its Intercontinental business, TNT expects to transport increased Freight volumes, as it has built a unique supply chain proposition for its customers. This proposition is based on uplift of goods from factories, to direct in-feed into TNT's networks around the world. To meet the increased demand from customers for this Intercontinental service, an additional B747 (expected start of operations beginning of Q2 2010) will complement TNT's existing capacity on the China to Europe lane.
Within Europe, the pipeline of new business signed for the recently launched Direct Express business is promising and expected to fuel growth in the near future.

For its fifth focus area within Vision 2015, Mail, TNT plans to build on its track record as one of the best postal companies in the world. In the continuously declining market in the Netherlands, Mail will focus on sustaining a solid cash flow, cost adjustments and growth through continued business renewal in the areas of parcels and e-commerce. The final agreement with the unions on the collective labour agreement for the Netherlands provides a clear framework within which the required cost savings will be implemented. The European Mail activities will focus on value realisation through partnerships or sale and ultimately concentrate on the large countries where TNT Post has obtained strong market positions: Germany, the UK and Italy.

On 3 December 2009 TNT announced, “The Mail activities will over time be prepared for partnership options including possible future mail incumbent consolidation”. On 1 February 2010 TNT added, “preparations in Mail NL have started, to enable the entering into partnerships”.

Today, TNT announces that in order to explore the best structure in which a continued success for the Mail business can be achieved, an internal legal and financial carve-out will be realised, documentation will be prepared, partnership discussions pursued and alternative positions assessed, including a (partial) listing or IPO of the Mail business.

A final decision on the future positioning of the Mail business will require preparation time and depends on a full assessment of all possible alternatives; the required clarity on the regulatory position on the USO in the Netherlands as well as obtaining all necessary approvals from TNT's shareholders and advice from TNT's works councils.

Trading update Q1 2010

Express international volume development in Q1 2010 overall was in line with indications given on 22 February. For Air (+23%) and Road (+10%), volumes were up compared to Q1 2009, continuing the improving trend. When compared to Q1 2007, a more normal operating period in terms of global trade than were 2008 and 2009, Air and Road volumes remain somewhat lower (-5% and -2% respectively).
(Volume figures reflect weeks 3 - 12, to adjust for the significant working-day effects in weeks 1 and 2, and measure year-on-year change in kilogrammes.)

Though the volume trend improves, yield remains under pressure as was flagged with the Q4 2009 results presentation. The yield, as a measure of the price development, was somewhat more negative sequentially and year on year – which underscores the continuing need to focus on cost control. Overall, the operating income for the quarter in Express is expected to show a significant improvement on the prior year, also supported by continued good cost control.

Addressed volume declines in Mail NL in Q1 2010 were within the indicated range of a decrease of 7-9%. Master plan savings continue to be implemented in line with expectations. The Mail operating income for the quarter will be ahead of that in Q1 2009, mainly because of higher working days, lower pension costs and significantly better performance from Emerging Mail & Parcels.

On 15 March 2010, TNT and the unions reached an agreement on a new collective labour agreement in the Netherlands for Operations employees in Mail (see ), resulting in salary increases (1 January 2010 + 0.7%) for the employees. Alongside this CLA, a social plan was confirmed. Also, it was agreed to set up a joint working group of TNT Post and the trade unions to explore a future-proof pension scheme. The net savings to be achieved by the CLA will support the €75 million Master plan savings targeted for 2010. TNT will begin to implement its restructuring plans for Mail in Q2 2010.

TNT will publish its 2010 first quarter results on 3 May 2010.

Future updates

At the publication of each of our quarterly results TNT will further update the market on business performance and the implementation of Vision 2015. On 2 December 2010 during its Annual Analyst Day TNT will provide the next in-depth update of its strategy.

About TNT
TNT provides businesses and consumers worldwide with an extensive range of services for their mail and express delivery needs. Headquartered in the Netherlands, TNT offers efficient network infrastructures in Europe and Asia and keeps optimising its global network performance. TNT serves more than 200 countries and employs around 160,000 people. Over 2009, TNT reported EUR 10.4 billion in revenues and an operating income of EUR 648 million. TNT is listed on the Amsterdam stock exchange. The company recognises its social responsibility, and has formed partnerships with the United Nations World Food Programme and the United Nations Environmental Programme to fight hunger and pollution. Our efforts are being recognised: in 2009 TNT again reached the highest score of all companies included in the Dow Jones Sustainability Index. More information about TNT can be found on its website .

Page publication date: 8 April 2010 at 08:00 CET