Adjusted operating profit for 2019 is NOK 808 million, which is NOK 278 million better than 2018.
The increase is mainly driven by growth in the logistics business. Posten Norge is now starting to see positive effects from the long-term measures taken to meet the growth in the e-commerce market.
"We are pleased with the trend in 2019. The growth, especially in the e-commerce market, comes from our development of services and digital solutions that meet customer needs. We are accelerating our innovation efforts and are shaping the delivery network of the future. Last year we expanded our delivery network in Norway, Sweden and Denmark with almost a thousand new collection points", says Tone Wille, CEO of Posten Norge.
Increased e-commerce leads to growth in the logistics segment
The logistics segment improved its adjusted operating profit significantly compared with 2018. Solid market growth and new digital services, combined with increasingly cost-efficient operations in the Norwegian parcel and freight network, resulted in a significant profitability improvement. In order to meet the growth and offer attractive solutions to Nordic online stores, Posten Norge continues to expand capacity and networks in Sweden and Denmark. In Norway, Posten Norge will coordinate and integrate the production of parcels and freight in a joint network.
Declining letter mail volumes are weakening the mail segment
Profit was reduced in the mail segment. Significant cost adjustments made in operations largely compensated for the sharp decline in addressed mail volumes. In 2019 addressed mail volumes fell by 9.9 per cent and the decline is expected to continue. In order to further adapt the postal service to lower demand, mail delivery will take place every other day from July 2020 as allowed for in the new Postal Act. Packages will still be delivered every weekday in most of the country.
Operating profit (EBIT) for 2019 ended up at NOK 162 million, a reduction of NOK 253 million from 2018. Operating profit was negatively affected by NOK 651 million, mainly as a result of transition costs of approximately NOK 430 million for the necessary restructuring of the postal business.
Combating climate change
"2020 is the start of the decade when Norway will reduce emissions by 50 per cent, and Posten Norge will continue its ambitious efforts to combat climate change challenges. The Group aims to use only renewable energy sources for vehicles and buildings by 2025. We are testing and using new vehicles, establishing emission-free mail and freight distribution systems, and are continuing to develop new business models that will make everyday life easier for most people", says Wille.
The Group's workforce at the end of 2019 totalled 13 995 full-time equivalents (FTEs), a reduction of 464 FTEs compared with 2018. The trends in sickness absence and injury frequency rate were positive. Sickness absence decreased to 5.9 per cent from 6 per cent the previous year. The injury frequency rate was reduced to 7.8 from 8.7 the previous year.
Highlights for 2019 (2018)
- Operating revenues: MNOK 24 212 (23 894)
- Adjusted operating profit: MNOK 808 (531)
- Operating profit/loss (EBIT) MNOK 162 (415)
- Cash flow from operating activities: MNOK 2 151 (598)
- Return on invested capital (ROIC): 7.4 (7.3) per cent
- Return on equity (ROE): 0.2 (3.9) per cent
Highlights Q4 2019 (Q4 2018)
- Operating revenues: MNOK 6 490 (6 407)
- Adjusted operating profit: MNOK 279 (246)
- Operating profit/loss (EBIT) MNOK 177 (88)
- Cash flow from operating activities: MNOK 870 (491)
Source: Posten Norge