leading mail and logistics operator in the nordic regionq2 2012 ltm logistics 2008 2009 strålfors...
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Leading Mail and Logistics Operator in Leading Mail and Logistics Operator in the Nordic Region
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Created by the Biggest Merger of its C eated by t e ggest e ge o tskind in Europe
PostNord AB was created through the merger of Posten AB and Post Danmark A/S in 2009
A leading supplier of business communication in the Nordic regionA leading supplier of business communication in the Nordic region
40% of shares held by the Danish state and 60% by the Swedish state. Votes are allocated 50/50
Mail operator for all of Denmark and all of Sweden
One of the largest operators in
Mail operator for all of Denmark and all of Sweden
One of the largest operators in
PostNord offers communication and logistics solutions to, from and within the Nordic region in Europe
Nordic advertising markets
The strongest business partner for Nordic e-commerce
Nordic advertising markets
The strongest business partner for Nordic e-commerce
2011 results: Net sales of SEK 39 bn, EBIT margin of 4.0%
A leading provider of logisticsservices to, from and within the Nordic region
A leading provider of logisticsservices to, from and within the Nordic regiongg
Supporting businesses, society and individuals with distribution services since 1624Supporting businesses, society and individuals with distribution services since 1624pp g ypp g y
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Strong Nordic PresenceSt o g o d c ese ce
PostNord offers mail and advertisingPostNord offers mail and advertisingservices in Sweden and Denmark
Logistics services for flows to, from gand within the Nordic region
Information logistics services throughout the Nordic region and in
Average number of employees 2011
Net sales 2011throughout the Nordic region and in a number of other European countries, through Strålfors
9%
2% 3% 3%1% 1%
p y
12,000 mail carriers in Sweden and 11,000 in Denmark
More than 4,800 distribution points
56%30% 59%
36%
More than 4,800 distribution points with generous opening hoursthoughout the Nordic region
SwedenDenmarkNorwayNorwayFinlandOther countries
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Continued Profitability in a Changing Co t ued o tab ty a C a g gMarket
4 000
Mail volume development PostNord, indexed EBIT PostNord, Posten and Post Danmark, SEKm1
100
3 00080
2 000
40
60
1 00020
00
1 EBIT 2002-2003 Posten & Post Danmark non-IFRS, EBIT 2004-2007 Posten & Post Danmark IFRS, PostNord from 2008
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Extensive Staff Reductions Implementedte s e Sta educt o s p e e ted
60 000
Average number of employees
40 000
50 000
-13,000
20 000
30 000
0
10 000
2008 2009 2010 2011 Q2 20122008 2009 2010 2011 Q2 2012
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Mail Business: Increasing Efficiencya us ess c eas g c e cy
500012
Maintained level of mail business’ expenses per mail unit…
Decreasing level of mail business’ employees per mail unit…
nits
500012
4000
5000
8
10
12
pen
se/m
ail unit
Mail vo
lum
plo
yees
/mill
ion u
n
Mail vo
lum
4000
6
8
10
3000
2
4
6
Tota
l ex
p esAvg
. no o
f em
p es
3000
2
4
6
20000
2
2008 2009 2010 2011 Q2 2012 LTM
Avg no of employees/million units
20000
2008 2009 2010 2011 Q2 2012 LTM
Avg. no of employees/million units
Mail volumes, million units
…in spite of a total mail volume decline of 18% since 2008 …in spite of a total mail volume decline of 18% since 2008
Total expense/mail unit, SEK
Mail volumes, million units
pp
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Logistics Business: Increasing Logistics’ og st cs us ess c eas g og st csShare of Sales
Net sales mix PostNord businesses, %1
20102011
Q2 2012 LTMLogistics
20082009
Strålfors
Including the acquisition of Green Cargo Logistics, logisticsservices now represent more than 1/3 of Group net sales
Including the acquisition of Green Cargo Logistics, logisticsservices now represent more than 1/3 of Group net sales
1 Q2 2012 LTM includes 2011 net sales of Green Cargo Logistics.
services now represent more than 1/3 of Group net salesservices now represent more than 1/3 of Group net sales
Page 7
Key Investment Highlightsey est e t g g ts
Regulated mail market with attractive cash flow profile. Logistics market with growthMarketsMarkets g p g gopportunities. Strong e-commerce growth driving demand for parcel services.
Strong position as Nordic market leader. Comparatively high barriers to entry in mail.
MarketsMarkets
PositionPositionOpportunity to grow logistics market share.
Stable financial position. Proven ability to deliver margins and cash flows in a changingk t i t Additi l ti li ti t ti l
PositionPosition
FinancialsFinancialsmarket environment. Additional rationalization potential.
Highly critical service in society. Stable governmental shareholder structure in mid-termperspective Change of control clause (51%)
FinancialsFinancials
OwnershipOwnershipperspective. Change of control clause (51%).
Return on equity to exceed 10% over a business cycle. Equity-to-assets ratio of at least35% Policy to distribute 40% of net profit
Financialtargets
Financialtargets 35%. Policy to distribute 40% of net profit.targetstargets
Unrated. Shadow ratings by SEB (BBB+) and Danske Bank (BBB+).Credit ratingCredit ratinggg
Page 8
Businessesus essesBusiness areaMail Denmark
Business area Mail Sweden
Business area Logistics
Strålfors
Delivers distribution solutions in the Danish
Delivers distribution solutions in the Swedish
A leading operator in the Nordic logistics market
Develops, produces and delivers systems and services in the Danish
communications marketin the Swedish communications market
Nordic logistics market offering a unique scope of coverage through the market’s strongest distribution network
yfor efficient business communication
7%il k
Net sales Q2 2012 LTM1 Adjusted EBIT margin, %
8%
10% Mail Denmark
M il S d22%
34%
Mail Denmark
Mail Sweden
Logistics
ålf
2%
4%
6%
Mail Sweden
Logistics
Strålfors
37%Strålfors
1 Q2 2012 LTM includes 2011 net sales of Green Cargo Logistics.
0%
2009 2010 2011 H1 2012
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Broad Service PortfolioMailMail
oad Se ce o t o o
Key services Net sales per service area Q2 2012 LTM
Mail distribution Business communication and other mail services (distribution of mail items/letters weighing less than 2 kg)
Advertising Distribution of unaddressed and 14%
Advertisingservices
Distribution of unaddressed and addressed direct mail Combined media services Consulting services
Distribution of d
Material maintenance, suppliert i t i t 59%
27%
Letters
Advertisements and Newspapers
goods management, inventories, customerdeliveries
Home deliveryservices
Concept for home delivery of goods, food and beverages to consumers
59%Other
Facility services Outsourcing of management of external and internal mail items for e-commerce, city logistics, municipal distributions, medical logistics, etc
Newspaperdistribution
Distribution of newspapers and periodicals
Page 10
Structural Market Changes from DigitizationMailMail
St uctu a a et C a ges o g t at o
PostNord mail volumes, million units Market position
3 000PostNord’s market shares for physical maildistribution and direct marketing span from 65-95%, depending on service and market
PostNord distributes close to 90% of 1 500
2 000
2 500
3 000
~-5%-3%
-3%
PostNord distributes close to 90% of domestic mail volumes in Sweden and 100% of domestic volumes in Denmark
Largest direct competitor is Posten Norge (B i Cit il) f t d il
0
500
1 000
2008 2009 2010 2011 2012E
~-12%-12%
Ongoing paradigm shift with an increased numberof communication methods
(Bring Citymail) – focus on pre-sorted mailin large urban areas in Sweden
Bring Citymail closed its Danish operations in 2010
2008 2009 2010 2011 2012E
Breve Danmark Meddelande Sverige
Co-ordinated initiatives in Nordic business and societies towards increased digitization
Structural change to continue given increasingrange of communication methods and politicalambition to accelerate digitization for the public
Mail volumes will continue to fall sharply in comingyears, towards new and lower normalized levelsy ,
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One of the Region’s Leading Logistics LogisticsLogistics
O e o t e eg o s ead g og st csCompanies
Net sales per logistics service area Q2 2012 LTMKey services and top 3 market positions Net sales per logistics service area Q2 2012 LTM
ParcelsParcels B2B #1 in SE and DK, top 3 in NO
Key services and top 3 market positions
47%
24%Green Cargo
Logistics
Parcels B2C #1 in SE and DK, #2 in NO and SF
SolutionsI Ni ht #1 i SE d NO t 3 i DK d SF
22%
7%InNight #1 in SE and NO, top 3 in DK and SF
3PL Top 3 position in Scandinavia
Consignment Top 3 in NO
Parcels
Solutions
S l ti G C L i ti (2011 t l )
Consignmentfreight/partloads
Top 3 in NO
Courier #1 in DK
Solutions: Green Cargo Logistics (2011 net sales)
Other logistics servicesOther logistics servicesGroupage/pallets
#2 in NO, top 3-4 in SE
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Restructuring and Focus on Value CreationStrålforsStrålfors
est uctu g a d ocus o a ue C eat o
Operations Key service areas
Core business to help large companies to communicate with their customers in an effective and cost saving way
Collects processes stores and delivers
Business Communication
Data Management (maintenance and development of databases)
-3%
Collects, processes, stores and delivers customers’ information that is crucial to the running of their businesses.
Business in Sweden, Norway,
Marketing Communication
Service Fulfillment (supply chain activities serving customers with Business in Sweden, Norway,
Denmark, Finland, Poland, France and the UK
ginformation and logistics handling)
Page 13
Strategic Outlook
Roadmap PostNord 2015StrategiesTarget picture Activities
Deliver on merger rationaleLeading Nordic logistics businessMeet USO requirements
Changes to meet mailvolume decreases and
ensure profitability
Cost adjustments
Implementation of new production strategy
Di l t ’ USO
Create financial valueSustainable growthI ti i
Meet USO requirements
Expansion within logistics broaden offer
Organic growth through additional sales and partnerships
Dialogue on tomorrow’s USO
Improve operating marginEffective capital utilization
Lay the groundwork for a potential IPO
logistics – broaden offer and market presence
partnerships
Potential complementary acquisitions
C l t di it l p
Profitable mail businessesGrowth within logisticsAppropriate capital structureAttractive dividend
Develop profitable businesses that support
mail business
Complementary digital services
New areas of application for existing production resources
Cohesive group with strategic governance
Increased coordination
Value maximization of Strålfors
Cost reductions in existingcore business
Growth activities within Data Management Marketing
Improved efficiencyManagement, Marketing Communication, Fulfillment
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Financial Position and Funding OverviewFinancial Position and Funding Overview
Page 15
Financing Roadmap a c g oad apPostNord 2015
A cash generating mail business and growth A cash generating mail business and growth opportunities within logistics
A clear strategy for repositioning PostNord in keeping gy p g p gwith market changes
Increasing investments – allowing for greater operational flexibility and scaleabilityoperational flexibility and scaleability
Substantial restructuring costs but underlying cost cuttings
Continued acquisitions
St fi i l itiStrong financial position
Aiming for greater financial flexibility
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Group Sales and EarningsG oup Sa es a d a gs
SEKm H1 2012 H1 2011 2011 2010 2009
Net sales 19,480 19,743 39,466 41,669 44,663
Change, % -1 -7 -5 -7 -3
EBIT 114 631 1,571 1,375 284
d d 8 8 8Adjusted EBIT 769 804 1,891 2,057 1,689
Net profit1 59 498 1,225 1,031 2,414
EBIT i %2 0 6 3 2 4 0 3 3 0 6EBIT margin, %2 0.6 3.2 4.0 3.3 0.6
Adjusted EBIT margin, %2 3.9 4.1 4.8 4.9 3.8
3
8%10%12%
4%
6%
Adjusted EBIT margin, % Return on equity, rolling 12 months, %3
0%2%4%6%
2009 2010 2011 H1 20120%
2%
4%
2009 2010 2011 H1 2011 H1 20122009 2010 2011 H1 2011 H1 2012
1 Includes capital gain of SEK 2,002 on the sale of shares in bpost in 20092 Includes Other income3 Excludes capital gain of SEK 2,002 on the sale of shares in bpost in 2009
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Cost ManagementCost a age e t
Expenses, SEKmCost reduction program for administration asof 30 Jun, 2012
40000
50000
20000
30000
2/3 completed
J 30
0
10000
Jun 30
Cost reduction program to reduce administrative expenses by SEK 1 billion by end of 2012, set up in 2011
In addition to ongoing rationalizations made
Personnel expenses*
Transport expenses, other expenses, depreciation and impairments*
Restructuringcosts In addition to ongoing rationalizations made within the group
Cost base lowered by SEK 6.2 bn from 2009 to Q2 2012 LTMCost base lowered by SEK 6.2 bn from 2009 to Q2 2012 LTM
Restructuring costs
*Excluding restructuring costs
y Qy Q
Page 18
Stable Cash FlowsStab e Cas o s
SEKm H1 2012 H1 2011 2011 2010
Cash flow from operating activities 723 671 1,634 1,824
Investing activities -2,026 -767 -1,813 -1,199
Financing activities 1,789 -1,305 -1,353 -1,782
of which dividend payout to shareholders -368 -1,000 -1,000 -1,440
Cash flow for the period 486 -1,401 -1,532 -1,157
Li id f d d f i d 2 591 2 240 2 107 3 640Liquid funds, end of period 2,591 2,240 2,107 3,640
CAPEX, % of net sales 4.9 3.4 4.9 3.1
‐4 0001 500
2 000
Cash flow from operating activities, MSEK1 Cash flow from investing activities, MSEK1
‐2 000
00
500
1 000
Q309‐Q210 2010 2011 Q212 LTMQ309‐Q210 2010 2011 Q212 LTM
1 Data starting from creation of PostNord Group. 2009 cash flow from investing activities excludes effect from the sale of shares in bpost
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Solid Financial PositionSo d a c a os t o
Net debt and net debt/EBITDA, SEK and times
1,02000
1 0
‐0,5
0,0
0,5
2000
‐1000
0
1000
2000
‐1,0‐2000
Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212
Net financial position
SEKm Jun 30, 2012
Jun 30, 2011
Dec 31, 2011
Dec 31, 2010
Cash and cash equivalents 2,591 2,240 2,107 3,640
Operating leases of SEK 7.3 bn, of which 6.5 relating to real property
Major off-balance sheet items as at 31 Dec 2011
Interest-bearing liabilities 3,252 1,146 1,098 1,454
Pension provisions 1,640 1,402 1,587 1,458
Net debt 2,301 308 578 -728
Equity-to-assets ratio, % 41 46 47 46
Pension commitments of SEK 18.2 bn, whereofSEK 15.8 bn funded pension plans. Assets managed by Posten Pension Fund amountsto SEK 14.3 bn, consolidation 104%. Expectedpayments of SEK 1 bn in 2012 relating to benefitEquity to assets ratio, % 41 46 47 46
Fin. preparedness, SEK bn 4.6
Aiming for greater financial flexibilityAiming for greater financial flexibility
plans
g g yg g y
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Sources and Uses of CapitalSou ces a d Uses o Cap ta
C h tiInvestments in operations PP&E investments of SEK 7-8
b t d i 2012 2014Cash generation
Increase group profitabilityand cash flow from operations Logistics M&A
p
When available, acquireaccretive businesses in line
ith t t t
bn expected in 2012-2014
Release of capital by increasing capital efficiency
Logistics M&A
Restructuring costs
with strategy to growprofitably
SEK 2-3 bn expected in total in 2012-2014. Normal run
t f 0 5 1 0% f l
E t l f di
est uctu g costs
Shareholder remuneration
rate of 0.5-1.0% of personnelexpenses
Dividend policy: 40% of netprofit. Dependant on implementation of strategyExternal funding
Optimise capital structureby increasing indebtedness
implementation of strategyand financial position
Liquidity/bufferFinance policy: Paymentreadiness to exceed SEK q y/1,5bn
Prudent assessment based on general macroeconomic development, mailvolume development and other significant market changes
Prudent assessment based on general macroeconomic development, mailvolume development and other significant market changesvolume development and other significant market changesvolume development and other significant market changes
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Key Investment Highlightsey est e t g g ts
Regulated mail market with attractive cash flow profile. Logistics market with growthMarketsMarkets g p g gopportunities. Strong e-commerce growth driving demand for parcel services.
Strong position as Nordic market leader. Comparatively high barriers to entry in mail.
MarketsMarkets
PositionPositionOpportunity to grow logistics market share.
Stable financial position. Proven ability to deliver margins and cash flows in a changingk t i t Additi l ti li ti t ti l
PositionPosition
FinancialsFinancialsmarket environment. Additional rationalization potential.
Highly critical service in society. Stable governmental shareholder structure in mid-termperspective Change of control clause (51%)
FinancialsFinancials
OwnershipOwnershipperspective. Change of control clause (51%).
Return on equity to exceed 10% over a business cycle. Equity-to-assets ratio of at least35% Policy to distribute 40% of net profit
Financialtargets
Financialtargets 35%. Policy to distribute 40% of net profit.targetstargets
Unrated. Shadow ratings by SEB (BBB+) and Danske Bank (BBB+).Credit ratingCredit ratinggg
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Disclaimersc a e
This document does not contain an offer of securities in the United States or any other jurisdiction; securities may not be offered or sold in the United States absent registration or exemption from the registration requirements under the U.S. Securities Act of 1933, as amended. Any offer of securities will be made, if at all, by means of a prospectus or offering memorandum issued by PostNord.
Forward-looking statementsStatements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. 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. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of PostNord. Forward-looking statements herein apply only as at the date of this document. PostNord will not undertake any obligation to publicly update or revise these forward-looking statements to reflect future events, new information or otherwise except as required by law.
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