TNT’s fourth quarter 2015 revenue up by 4.1 percent

TNT’s fourth quarter 2015 revenue up by 4.1 percent

Posted By : STAT Times 16-02-2016 00:00:00

Feb 16, 2016: TNT reported fourth quarter 2015 revenues of €1,861 million, up 4.1 percent year-on-year, and an operating income of €57 million, compared to an operating loss of €53 million in the same period of 2014.

Revenues benefited from foreign currency effects and working day effect but were negatively affected by lower fuel surcharges. Excluding all three items, underlying revenue growth was 3.0 percent. The improvement is due to higher revenues and volumes overall, particularly from SMEs. Revenue growth in Europe more than offset the decreases in Brazil and China.

Fourth quarter operating income absorbed net one-off charges of €39 million, including restructuring charges of €11 million.

Excluding one-off charges, TNT’s adjusted operating income almost doubled from a year earlier to €96 million. Profitability was supported by revenue growth and successful efforts to reduce indirect costs. Outlook-related transition and project costs were €8 million during the period.

Capital expenditures amounted to €73 million (3.9 percent of revenues) compared to €86 million (4.8 percent of revenues) in the prior year.

The company’s net cash position at the end of December was €231 million compared to €449 million one year earlier. The decrease reflects the investments made as part of the Outlook strategy.

Tex Gunning, chief executive officer, TNT, said, “I am very pleased with our Q4’15 results. The implementation of the Outlook strategy is gaining momentum. We expect further year-on-year improvements in adjusted operating income in full year 2016. Good progress has also been made towards closing of the FedEx offer to acquire TNT. Pre-integration planning is well on track and we are all looking forward to a bright future with FedEx.”

Revenues in Europe rose by 9.1 percent to €789 million. Revenues in International AMEA (Asia, Middle East and Africa) increased 4.7 percent year-on-year to €270 million, supported by positive currency effects. Currency comparable revenue growth was -3.5 percent. This reduction is explained by the year-on-year decline in China’s exports to Europe. Revenue decrease in China and Hong Kong was partly offset by growth in India and Middle-East & Africa. Revenues from SMEs grew faster than those from large customers and now represent a bigger proportion of the segment’s overall revenues.

Revenues in the Domestics segment were €690 million, flat with the fourth quarter of 2014, as revenue growth in Europe balanced the decrease in Brazil and Australia. Underlying revenue growth, adjusted for currency effects, working day effect and the negative impact of lower fuel surcharges, was 0.9 percent.

TNT reiterates its Outlook agenda and guidance for 2018-19, as presented during the capital markets day on 18 February 2015. TNT expects continued economic volatility in some markets outside Europe, especially in Brazil from 2018/2019. TNT anticipates restructuring charges of about €10 million in the first quarter. Closing of the FedEx Offer to acquire TNT is anticipated in the first half of calendar year 2016.

During 2015, TNT took structural measures to rebuild a sustainable future. Revenues increased by 3.5 percent to €6,914 million. Operating income was €38 million compared to an operating loss of €86 million in 2014.

Progress was made on many fronts. The company returned to revenue growth despite economic volatility in some of its markets, notably Brazil and China. Revenues from small and medium-sized companies (SMEs) grew even quicker at 5.1 percent, accelerating as the year went by.

2015 saw the ramp up of new and upgraded facilities and the start of wide-ranging projects, such as the outsourcing of TNT’s IT infrastructure services and the establishment of Global Business Services.

The company invested €309 million (4.5 percent of revenues) to modernise its transport and IT infrastructure, compared to €190 million (2.8 percent of revenues) in the prior year. Furthermore, TNT launched new road and air connections, expanded network coverage and improved on-time delivery performance globally.

The transformations implemented in 2015 triggered restructuring and other one-off charges that reduced the full year operating income by €113 million.

Adjusted operating income decreased by €58 million to €151 million. Most of the decrease is explained by Outlook-related transition and projects costs, which totaled close to €45 million. The remainder of the decrease was due to pricing pressures in several markets, particularly the domestic ones.

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