Leading Mail and Logistics Operator in
the Nordic Region
Page 1
C eated by the
Created
t e Biggest
ggest Merger
e ge of
o its
ts
kind in Europe
f
PostNord AB was created through the
merger of Posten AB and Post Danmark A/S
in 2009
f
40% of shares held by the Danish state and
60% by the Swedish state. Votes are
allocated 50/50
PostNord offers communication and logistics
solutions to, from and within the Nordic
region in Europe
f
2011 results: Net sales of SEK 39 bn, EBIT
margin of 4.0%
f
f
A leading supplier of business
communication in the Nordic region
f
Mail operator for all of Denmark and
all of Sweden
f
One of the largest operators in
Nordic advertising markets
f
The strongest business partner for
Nordic e-commerce
f
A leading provider of logistics
services to, from and within the
Nordic region
g
Supporting
pp
g businesses, society
y and individuals with distribution services since 1624
Page 2
Strong
St
o g Nordic
o d c Presence
ese ce
f
PostNord offers mail and advertising
services in Sweden and Denmark
f
g
services for flows to, from
Logistics
and within the Nordic region
f
Information logistics services
throughout the Nordic region and in
a number of other European
countries, through Strålfors
Net sales 2011
2% 3%
Average number of
employees
p y
2011
3% 1% 1%
9%
f
f
Page 3
12,000 mail carriers in Sweden and
11,000 in Denmark
More than 4,800 distribution points
with generous opening hours
thoughout the Nordic region
36%
30%
56%
Sweden
Denmark
Norway
Finland
Other countries
59%
Co t ued Profitability
Continued
o tab ty in a Changing
C a g g
Market
Mail volume development PostNord, indexed
EBIT PostNord, Posten and Post Danmark, SEKm1
4 000
100
80
3 000
60
2 000
40
1 000
20
0
0
Page 4
1 EBIT 2002-2003 Posten & Post Danmark non-IFRS, EBIT 2004-2007
Posten & Post Danmark IFRS, PostNord from 2008
Extensive
te s e Staff
Sta Reductions
educt o s Implemented
p e e ted
Average number of employees
60 000
50 000
-13,000
40 000
30 000
20 000
10 000
0
2008
Page 5
2009
2010
2011
Q2 2012
Mail
a Business:
us ess Increasing
c eas g Efficiency
c e cy
Maintained level of mail business’ expenses per mail
unit…
10
4000
6
4
3000
2
12
5000
10
8
4000
6
4
3000
2
0
2000
2008
2009
2010
2011
Q2 2012
LTM
Total expense/mail unit, SEK
Mail volumes, million units
0
2000
2008
2009
2010
Q2 2012
LTM
Avg no of employees/million units
Avg.
Mail volumes, million units
…in spite
p
of a total mail volume decline of 18% since 2008
Page 6
2011
Mail volumes
8
Avg. no of emp
ployees/million un
nits
5000
Mail volumes
Total exp
pense/mail unit
12
Decreasing level of mail business’ employees per mail
unit…
Logistics
og st cs Business:
us ess Increasing
c eas g Logistics’
og st cs
Share of Sales
Net sales mix PostNord businesses, %1
Mail
Q2 2012 LTM
2011
2010
2009
2008
Logistics
Strålfors
Including the acquisition of Green Cargo Logistics, logistics
services now represent more than 1/3 of Group net sales
Page 7
1
Q2 2012 LTM includes 2011 net sales of Green Cargo Logistics.
Key
ey Investment
est e t Highlights
g g ts
Markets
Regulated
g
mail market with attractive cash flow p
profile. Logistics
g
market with g
growth
opportunities. Strong e-commerce growth driving demand for parcel services.
Position
Strong position as Nordic market leader. Comparatively high barriers to entry in mail.
Opportunity to grow logistics market share.
Financials
Stable financial position. Proven ability to deliver margins and cash flows in a changing
market
k t environment.
i
t Additional
Additi
l rationalization
ti
li ti
potential.
t ti l
Ownership
Highly critical service in society. Stable governmental shareholder structure in mid-term
perspective Change of control clause (51%).
perspective.
(51%)
Financial
targets
Return on equity to exceed 10% over a business cycle. Equity-to-assets ratio of at least
35% Policy to distribute 40% of net profit.
35%.
profit
Credit
g
rating
Page 8
Unrated. Shadow ratings by SEB (BBB+) and Danske Bank (BBB+).
Businesses
us esses
Business area
Mail Denmark
Business area
Mail Sweden
Delivers distribution solutions Delivers distribution solutions
in the Danish
in the Swedish
communications market
communications market
Mail
Net sales Q2 2012 LTM1
Business area
Logistics
Strålfors
A leading operator in the
Nordic logistics market
offering a unique scope of
coverage through the
market’s strongest
distribution network
Develops, produces and
y
and services
delivers systems
for efficient business
communication
Adjusted EBIT margin, %
Mail Denmark
10%
7%
22%
Mail
il Denmark
k
Mail Sweden
34%
37%
Logistics
4%
2%
Strålfors
ålf
0%
Q2 2012 LTM includes 2011 net sales of Green Cargo Logistics.
M il S d
Mail Sweden
6%
Logistics
Page 9
1
8%
Strålfors
2009
2010
2011
H1 2012
Mail
Broad
oad Service
Se ce Portfolio
o to 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)
14%
Advertising
services
Distribution of
goods
d
Distribution of unaddressed and
addressed direct mail
Combined media services
Consulting services
Material maintenance, supplier
management,
t inventories,
i
t i
customer
t
deliveries
Home delivery
services
Concept for home delivery of goods, food
and beverages to consumers
Facility services
Outsourcing of management of external
and internal mail items for e-commerce,
city logistics, municipal distributions,
medical logistics, etc
Newspaper
distribution
Distribution of newspapers and periodicals
Page 10
Letters
27%
Advertisements and
Newspapers
59%
Other
Mail
Structural
St
uctu a Market
a et Changes
C a ges from
o Digitization
g t at o
PostNord mail volumes, million units
Market position
3 000
-3%
2 500
~-5%
2 000
1 500
-12%
1 000
~-12%
500
0
2008
2009
Breve Danmark
2010
2011
2012E
Meddelande Sverige
f Ongoing paradigm shift with an increased number
of communication methods
f Co-ordinated initiatives in Nordic business and
societies towards increased digitization
f Structural change to continue given increasing
range of communication methods and political
ambition to accelerate digitization for the public
f Mail volumes will continue to fall sharply in coming
years,, towards new and lower normalized levels
y
Page 11
f PostNord’s market shares for physical mail
distribution and direct marketing span from
65-95%, depending on service and market
f PostNord distributes close to 90% of
domestic mail volumes in Sweden and 100%
of domestic volumes in Denmark
-3%
f Largest direct competitor is Posten Norge
(B i
(Bring
Citymail)
Cit
il) – focus
f
on pre-sorted
t d mail
il
in large urban areas in Sweden
f Bring Citymail closed its Danish operations
in 2010
Logistics
O e of
One
o the
t e Region’s
eg o s Leading
ead g Logistics
og st cs
Companies
Key services and top 3 market positions
Parcels
Parcels B2B
#1 in SE and DK, top 3 in NO
Parcels B2C
#1 in SE and DK, #2 in NO and SF
Net sales per logistics service area Q2 2012 LTM
24%
Green
Cargo
Logistics
Solutions
I Ni ht
InNight
#1 in
i SE and
d NO
NO, ttop 3 in
i DK and
d SF
3PL
Top 3 position in Scandinavia
47%
7%
22%
Consignment
freight/part
loads
Top 3 in NO
Courier
#1 in DK
Parcels
Solutions
S l ti
Solutions:
G
Green C
Cargo L
Logistics
i ti (2011 nett sales)
l )
Other logistics services
#2 in NO, top 3-4 in SE
Groupage/
pallets
Page 12
Other logistics services
Strålfors
Restructuring
est uctu g and
a d Focus
ocus on
o Value
a ue Creation
C eat o
Operations
f
f
f
Core business to help large companies
to communicate with their customers
in an effective and cost saving way
Collects, processes
Collects
processes, stores and delivers
customers’ information that is crucial
to the running of their businesses.
Business in Sweden, Norway,
Denmark, Finland, Poland, France and
the UK
Page 13
Key service areas
f
Business Communication
f
Data Management (maintenance and
development of databases)
f
Marketing Communication
f
Service Fulfillment (supply chain
activities serving
g customers with
information and logistics handling)
-3%
Strategic Outlook
Roadmap PostNord 2015
Target picture
Deliver on merger rationale
f Leading Nordic logistics
business
f Meet USO requirements
Create financial value
f Sustainable growth
f Improve
I
operating
ti
margin
i
f Effective capital utilization
Lay the groundwork for a
potential IPO
p
f Profitable mail businesses
f Growth within logistics
f Appropriate capital structure
f Attractive dividend
Cohesive group with strategic
governance
f Increased coordination
f Improved efficiency
Page 14
Strategies
Changes to meet mail
volume decreases and
ensure profitability
Expansion within
logistics – broaden offer
and market presence
Develop profitable
businesses that support
mail business
Value maximization of
Strålfors
Activities
f Cost adjustments
f Implementation of new
production strategy
f Dialogue
Di l
on tomorrow’s
t
’ USO
f Organic growth through
additional sales and
partnerships
f Potential complementary
acquisitions
fC
Complementary
l
t
digital
di it l
services
f New areas of application for
existing production resources
f Cost reductions in existing
core business
f Growth activities within Data
Management Marketing
Management,
Communication, Fulfillment
Financial Position and Funding Overview
Page 15
Financing
a c g Roadmap
oad ap
PostNord 2015
f
A cash generating mail business and growth
opportunities within logistics
f
gy for repositioning
p
g PostNord in keeping
p g
A clear strategy
with market changes
f
Increasing investments – allowing for greater
operational flexibility and scaleability
f
Substantial restructuring costs but underlying cost
cuttings
f
Continued acquisitions
f
St
Strong
financial
fi
i l position
iti
f
Aiming for greater financial flexibility
Page 16
Group
G
oup Sa
Sales
es and
a d Earnings
a
gs
SEKm
Net sales
H1 2012
H1 2011
2011
2010
2009
19,480
19,743
39,466
41,669
44,663
-1
-7
-5
-7
-3
114
631
1,571
1,375
284
769
8
804
1,891
8
2,057
1,689
8
59
498
1,225
1,031
2,414
06
0.6
32
3.2
40
4.0
33
3.3
06
0.6
3.9
4.1
4.8
4.9
3.8
Change, %
EBIT
Adjusted
d
d EBIT
Net profit1
EBIT margin,
i %2
Adjusted EBIT margin, %2
Adjusted EBIT margin, %
Return on equity, rolling 12 months, %3
12%
10%
8%
6%
4%
2%
0%
6%
4%
2%
0%
2009
Page 17
2010
2011
H1 2011
H1 2011
H1 2012
H1 2012
1
2
3
2009
2010
2011
Includes capital gain of SEK 2,002 on the sale of shares in bpost in 2009
Includes Other income
Excludes capital gain of SEK 2,002 on the sale of shares in bpost in 2009
H1 2012
Cost Management
a age e t
Cost reduction program for administration as
of 30 Jun, 2012
Expenses, SEKm
50000
40000
30000
2/3
completed
J
Jun
30
20000
10000
0
f Cost reduction program to reduce administrative
expenses by SEK 1 billion by end of 2012, set up
in 2011
Personnel expenses*
Transport expenses, other expenses, depreciation and impairments*
Restructuring costs
Restructuring costs
f In addition to ongoing rationalizations made
within the group
Cost base lowered by
y SEK 6.2 bn from 2009 to Q
Q2 2012 LTM
Page 18
*Excluding restructuring costs
Stable
Stab
e Cas
Cash Flows
o s
SEKm
H1 2012
H1 2011
2011
2010
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
-368
-1,000
-1,000
-1,440
Cash flow for the period
486
-1,401
-1,532
-1,157
Li id ffunds,
Liquid
d end
d off period
i d
2 591
2,591
2 240
2,240
2 107
2,107
3 640
3,640
4.9
3.4
4.9
3.1
Cash flow from operating activities
of which dividend payout to shareholders
CAPEX, % of net sales
Cash flow from investing activities, MSEK1
Cash flow from operating activities, MSEK1
2 000
‐4 000
1 500
1 000
‐2 000
500
0
0
Q309‐Q210
Page 19
2010
2011
Q212 LTM
Q309‐Q210
1 Data starting from creation of PostNord Group. 2009 cash flow from
investing activities excludes effect from the sale of shares in bpost
2010
2011
Q212 LTM
Solid
So
d Financial
a c a Position
os t o
Net debt and net debt/EBITDA, SEK and times
1,0
2000
0,5
1000
0
0,0
‐1000
‐0,5
‐2000
2000
‐1,0
10
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
Net financial position
SEKm
Jun 30,
2011
Dec 31,
2011
Dec 31,
2010
Cash and cash equivalents
2,591
2,240
2,107
3,640
Interest-bearing liabilities
3,252
1,146
1,098
1,454
Pension provisions
1,640
1,402
1,587
1,458
2,301
308
578
-728
41
46
47
46
Equity-to-assets
Equity
to assets ratio, %
Fin. preparedness, SEK bn
Q311
Q112
Q212
4.6
f
Operating leases of SEK 7.3 bn, of which 6.5
relating to real property
f
Pension commitments of SEK 18.2 bn, whereof
SEK 15.8 bn funded pension plans.
Assets managed by Posten Pension Fund amounts
to SEK 14.3 bn, consolidation 104%. Expected
payments of SEK 1 bn in 2012 relating to benefit
plans
f Aiming
g for g
greater financial flexibility
y
Page 20
Q411
Major off-balance sheet items as at 31 Dec 2011
Jun 30,
2012
Net debt
Q211
Sources
Sou
ces and
a d Uses of
o Capital
Cap ta
C h generation
Cash
ti
f
f
Increase group profitability
and cash flow from
operations
PP&E investments of SEK 7-8
b expected
bn
t d in
i 2012-2014
2012 2014
f Logistics M&A
When available, acquire
accretive businesses in line
with
ith strategy
t t
t grow
to
profitably
f Restructuring
est uctu
g costs
SEK 2-3 bn expected in total
in 2012-2014. Normal run
rate
t off 0.5-1.0%
0 5 1 0% off personnell
expenses
f Shareholder remuneration
Dividend policy: 40% of net
profit. Dependant on
implementation of strategy
and financial position
f Liquidity/buffer
q
y/
Finance policy: Payment
readiness to exceed SEK
1,5bn
Release of capital by
increasing capital efficiency
E t
External
l funding
f di
f
f Investments in operations
p
Optimise capital structure
by increasing indebtedness
Prudent assessment based on general macroeconomic development, mail
volume development and other significant market changes
Page 21
Key
ey Investment
est e t Highlights
g g ts
Markets
Regulated
g
mail market with attractive cash flow p
profile. Logistics
g
market with g
growth
opportunities. Strong e-commerce growth driving demand for parcel services.
Position
Strong position as Nordic market leader. Comparatively high barriers to entry in mail.
Opportunity to grow logistics market share.
Financials
Stable financial position. Proven ability to deliver margins and cash flows in a changing
market
k t environment.
i
t Additional
Additi
l rationalization
ti
li ti
potential.
t ti l
Ownership
Highly critical service in society. Stable governmental shareholder structure in mid-term
perspective Change of control clause (51%).
perspective.
(51%)
Financial
targets
Return on equity to exceed 10% over a business cycle. Equity-to-assets ratio of at least
35% Policy to distribute 40% of net profit.
35%.
profit
Credit
g
rating
Page 22
Unrated. Shadow ratings by SEB (BBB+) and Danske Bank (BBB+).
Disclaimer
sc 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 statements
Statements 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.
Page 23
postnord.com
Investor Relations
Treasury
[email protected]
[email protected]
[email protected]
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