Norway Post
Results as of first quarter 2016
1
Highlights – Important events in the first quarter 2016

The growth in e-commerce continues. The Group's total e-commerce
volume increased by 4 % in the first quarter 2016

The new Postal Services Act came into effect on 1 January 2016. The law
will contribute to the Group’s ability to adjust in line with changing
customer needs. This entailed that Posten Norge discontinued distribution
of mail on Saturdays from 5 March 2016

Posten Norge suggests a single stream mail distribution with a two days
transit time for addressed mail. A White paper was presented 11 May and
is expected to be discussed in Parliament before summer

Absence due to sickness was 6.5 % in the first quarter 2016, an
improvement of 0.4 percentage points from the same period 2015

Delivery quality for priority mail in the first quarter was 87.1 % (2.1
percentage points above the licence requirement). Delivery quality for
priority mail in the first quarter 2015 was 83.9%

At the end of the first quarter 2016 Digipost had approximately 800 000
registered users. More than 200 000 new users joined Digipost in the first
quarter 2016
2
White paper regarding Posten Norge and the postal sector

Background
– White Paper number 31 (2015-2016) was presented by the Government on 11 May
– Expected to be discussed in Parliament before summer

Easing of regulatory requirements for Posten Norge
– From today’s two mail streams (priority and non-priority) to a single, two-day-delivery mail
stream
•
Taken into agreement for mandatory delivery services to be concluded with Posten Norge during 2016
– Adjustments to ​the mobile post offices in rural areas
•
Harmonisation of the coverage areas; to be limited to households with more than 4 km to the nearest
Post in shop / post office
– Number of delivery days:
•
•
Current requirements to distribute mail five days a week is continued, but more flexibility could be introduced in line with the continuing
decline in letter volumes
The white paper references reduced delivery frequency in e.g. Italy, Denmark and Iceland
– Distribution network:
•
•

The requirement for a minimum number of Post in shop / post office is discontinued
Room for greater flexibility in service requirements
Governmental ownership in Posten Norge
– Universal service requirements will continue through the signing of contracts and sector-specific regulation - not through
ownership
•
•
Discontinue Posten Norge’s special filing requirement to the owner (Section 10 of the Statutes) and the statute concerning certain public
sector requirements in the Norwegian Language Usage Act
Discontinue the practice of presenting a White Paper to Parliament on Posten Norge's activities
3
Highlights – Important events in the first quarter 2016

Operating revenues:
MNOK 6 199, down 1.4 % from 2015

Earnings before interest and taxes*:
MNOK 18, down 92.2 % from 2015

Return on invested capital (last 12 months)*:
6.8 %, down 7.6 percentage points from 2015
* Before non-recurring items and write-downs
4
Operating revenue
(MNOK)
25 074
25.000
22.451
22 981
23 557
24 404
22.925
20.000
15.000
-1.4 %
10.000
6.288
6.199
5.000
0
2010
2011
2012
2013
2014
2015
2016
5
Earnings (EBIT) before non-recurring items and write downs
(MNOK)
1.116
1 125
1 051
1.000
933
952
686
-92.2 %
500
231
18
0
2010
2011
2012
2013
2014
2015
2016
6
Operating revenues from foreign companies
Operating revenues in MNOK
8 845
9.000
8.122
8.000
7.190
7.000
6.443
5.871
6.000
5.855
6.434
5.959
4.886
5.000
3.967
8.6 %
4.000
3.000
2.000
1.658
2.139
1.000
2.324
Operating revenues from foreign companies
constitute 37.5 % of the Groups total
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
revenues, a growth of 3.5 percentage points
from last year
7
Results
Q1 2016
Q1 2015
MNOK
6 199
6 288
195
437
18
231
1
0
(1)
(2)
7
Operating revenues
EBITDA
EBIT before non-recurring items and writedowns
Året 2015
25 074
1 474
686
Write-downs
385
Non-recurring expenses/(income)
307
249
Share of profit from associates*
245
25
482
EBIT
239
3
(26)
Net financial income/(cost)
(88)
28
456
Income before tax
151
8
57
Taxes
212
20
399
Net income
(61)
* Includes gain from the sale of shares in EVRY ASA
8
Norway Post’s Segment Structure
Group
Mail
Logistics
9
Segment distribution of external revenues
7 000
6 000
5 000
4 000
60 %
61 %
62 %
3 000
2 000
1 000
40 %
39 %
38 %
YTD 2015
YTD 2016
0
YTD 2014
Mail
Logistics
10
Segment Mail
mail
logistics
Letter Products
Banking services
Dialogue services
11
Key figures 2016

mail
Operating revenue
Operating revenues first quarter 2016 were MNOK 2 512
MNOK 136 lower than last year

Volume decrease addressed mail 13.9 %

Volume decrease unaddressed mail 6.2 %

Bring Citymail Sweden had a volume increase of
8.4 %

The decline in volume was due to increased
digitization and was also affected by the timing of
Easter
logistics
2 800
2 706
2 700
2 628
2 710
2 600
2 648
2 629
2 512
2 500
2 400
Q1 2011
Growth (%)
Q1 2012
-0.1
Q1 2013
-2.8
Q1 2014
0.0
Q1 2015
Q1 2016
0.8
-5.1
EBITE

400
Earnings before write-downs and non-recurring items were
345
325
350
MNOK 176 in the first quarter 2016, MNOK 149 lower
270
300
250
than 2015
308
272
200
176
150


Positive effects from cost reducing measures partly
compensated for the decline in volumes
The volume decline is expected to accelerate in the
future
100
50
EBITEmargin
(%)
Q1 2011
Q1 2012
11.4
12.7
Q1 2013
10.3
Q1 2014
10.3
Q1 2015
Q1 2016
12.3
3.4
12
Segment Logistics
mail
logistics
Parcels
Express
Cargo
Frigo
Warehousing
Supply Services
13
Key figures 2016

mail
logistics
Operating revenues first quarter 2016 were MNOK 4 094,
Operating revenue
an increase of 0.5 % from 2015
4.500

The increase in private e-commerce continued

Significantly affected by lower economic activity as a
consequence of low oil prices
Timing of Easter affects revenue compared with last
year
4.094
Q1 2015
Q1 2016
4.000
3.868
3.483

4.073
3.500
3.558
3.557
3.000
Q1 2011

Earnings before write-downs and non-recurring items were
Growth
(%)
Q1 2012
2.2
Q1 2013
0.0
Q1 2014
8.7
5.2
0.5
negative with MNOK 84 in the first quarter 2016, a
decrease of MNOK 135 from the same period 2015

The decrease in earnings is mainly a consequence of
weaker markets in Norway and a decline in the
profitability of parcels
EBITE
56
41
50
30
51
43
10
-10

A shift towards services with lower margins
-30

Market conditions are still challenging for the logistics
operations in Sweden and Denmark
-70
-50
-44
-84
-90
EBITEmargin
(%)
Q1 2011
1.2
Q1 2012
Q1 2013
Q1 2014
1.6
-1.2
1.1
Q1 2015
1.2
Q1 2016
-2.1
Summary

Accelerating volume decline in the Mail segment due to increased
digitization

The economic downturn and uncertain market prospects in the
Logistics segment makes 2016 a challenging year for the Group

The Group is continuing focus within the Logistics segment. The
establishment of the new logistics structure in Norway proceeds
according to plan

Further measures to compensate for the volume decline in the
Mail segment include the introduction of a single mail stream with
a two-day delivery service (assuming political clarification)

The development in the profitability requires further cost
adjustments. A process to reduce support functions staff with
approximately 100 full time employees is completed. Further
efficiency measures have been initiated
15