Omniva 2016: growth in the Baltic region and preparations for the continued expansion of Omniva’s parcel business

In 2016, the parcel business and information logistics business of Omniva Group grew in the Baltic region, the domestic market Omniva.

Omniva’s international business also continued its rapid growth. Revenues from Omniva’s postal services provided on the Estonian market continued to fall.

In 2016, the total commercial revenue of the Group amounted to 95.8 million euros, a 27% increase compared to the previous year. This growth was mainly influenced by the growth in the volume of international e-commerce and logistics services of Omniva. The net profit of the Group in 2016 was 1,166,000 euros, a 20% decrease compared to the previous year.

Rapid growth on the domestic market and in international business

In the Baltic region, the domestic market of Omniva, the Group’s sales revenue from parcel business services increased by 17% compared to the previous year. The increase in parcel business was especially notable in Latvia, where the business revenues from parcel services grew by 90% compared to the previous year. In Lithuania, Omniva’s revenues from parcel business increased by 30% compared to the previous year.

The parcel machine service continued to show rapid growth in all three Baltic States, increasing by 42%. The service grew by 25% in Estonia, 92% in Latvia, and 90% in Lithuania. Altogether, Omniva delivered 40% more parcels to its customers via parcel machines in 2016 than it did in 2015.

Owing to the popularity of parcel machines as well as to the rapid growth of e-commerce, Omniva expanded its parcel machine network by a total of 35% in the Baltic region in 2016, including an increase of 54% in Latvia and 49% in Lithuania. It is the most extensive parcel machine network, which covers the entire Baltic area. “We plan to continue the expansion of our parcel machine network in 2017. We can use parcel machines of different types and sizes to expand to regions where parcel traffic is not yet that dense,” said Kärmas.

International business is Omniva’s fastest growing area of business, which increased by 107% in revenues in 2016. “Although the twofold growth of the area is a remarkable result, I am confident that the growth in international e-commerce will not slow down. Instead, the upward trend will continue,” said Kärmas.

In 2016, around 40 million shipments were delivered to around 100 destination countries. Fifty new positions were created in Omniva’s distribution centre in Tallinn in connection with the rapid increase in the volume of this area of business. Omniva’s international business primarily involves the logistics of parcels sent as part of Chinese e-commerce.

Revenues from the information logistics business increased by 35% compared to 2015. The expansion of Omniva’s operations in Latvia and Lithuania as well as the increase in the volumes in Estonia were important steps in this area of business. An important step in cross-border cooperation was the conclusion of a strategic partnership with Pagero, the leading operator of e-invoices in Europe, which enables Omniva to provide a broad international reach in e-invoicing to its Baltic customers.

The area of postal services continues to shrink

Omniva’s revenues from postal services, which the company provides only in Estonia, continue to decline. Omniva’s revenues from postal services decreased by 3% compared to the previous year. A continued decrease in the volume of letter services was the cause of this decline. “The volume of letter services decreases by 10–15% each year. In 2016, the volume of domestic letters decreased by 12%, deliveries of advertisements and periodicals by 2% and 3%, respectively,” said Kärmas.
Compared to 2015, the aggregate results of postal services were also influenced by the Estonian parliamentary elections held in 2015. Compared to those results, Omniva’s revenues from direct mail services were also smaller in 2016.

The Group’s investments increased by 20% compared to 2015, amounting to 7,726,000 euros.

“In 2016, the Group invested in the installation of new parcel machines in the Baltic region, in the establishment of a new logistics centre, and in the development of a new logistics information system,” said Kärmas. “The main investments were made for the purpose of major projects, which will ensure more efficient business processes and a more customer-friendly service in the future.”

In 2016, considering primarily the needs of the parcel business, Omniva started the development of a new information system, as well as preparations for replacing its current information system in the autumn of 2017. “The new information system allows us to create new solutions that focus on the customer, as well as to modernise our existing services,” said Kärmas.

In 2016, Omniva also started building the most advanced logistics centre in the Baltic area in order to handle the rapidly growing volumes of parcel business. “We took account of the growth forecasts for the next ten years regarding the volume of parcels. This will ensure that the new logistics centre will be able to handle significantly larger volumes. In addition to the new building, we will also invest in a state-of-the-art sorting technology,” said Kärmas. The future logistics centre is located in the vicinity of Tallinn, near the airport and important traffic intersections. It will be completed in the autumn of 2018.

The Omniva Group mainly operates in the provision of postal, logistics and information logistics services, as well as the management of e-invoices. In addition to AS Eesti Post, the parent company, the Group includes subsidiaries and related companies. The principal activity of SIA Omniva and UAB Omniva LT is the provision of parcel machine and courier services on the Latvian and Lithuanian markets. AS Maksekeskus operates in the provision of payment solutions to e-commerce companies in the Baltic region. OÜ Post11 offers international logistics solutions for delivering goods all across the world.

In 2016, the Group employed an average of 2,244 employees in the Baltic region. The turnover of the Group amounted to 95.8 million euros in 2016.

Source: Omniva

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