2011 Highlights & Strategy update Marie-Christine Lombard, CEO 21 February 2012
TNT Express – Strong, independent express business • Market leader in Door-to-Door B2B express delivering in Europe through unique set of connected country domestic networks • Unrivalled product portfolio from time critical to next day to day- definite • Broad and loyal customer base from local, region, national and multinationals • Over 1 million deliveries every day • 79,000 employees worldwide and more than 30,000 subcontractors • Highest service levels and customer satisfaction 2
Agenda Opening 14:00 Marie-Christine Lombard 2011 Highlights Marie-Christine Lombard Strategy Update 4Q11 / FY11 Results Update Bernard Bot Q&A Closing 16:00 Marie-Christine Lombard Reception 3
2011 – Resilient performance in Europe, strong balance sheet, challenges persist 2011 Highlights • Positive revenue development Adj. revenue €7,251m 2.8% FY2011 • Challenging economic environment Adj. op. income €228m -29.4% • Resilient European performance • Highest ever service performance Adj. revenue €4,547m 2.1% Europe & MEA • Increased customer satisfaction Adj. op. margin 8.4% • Good rate of new business gain • Reduced intercontinental capacity 2H11: €(13)m Asia Pacific • China Domestic Day-Definite Adj. op. income 1H11: €(20)m revenues on track • Brazil turnover measures taking hold Q4: -13% Revenue gap vs. Americas 2010 • Revenue gap decreasing Q2: -21% • New focused, stand alone Express Net debt €7m Other company created after challenging Cost savings €30m delivered demerger 4
New strategy – Building on Strengths Focus on Europe 1 Deliver improved financial Connect Europe with the rest of the world 2 performance and Explore partnerships for Brazil and China 3 maximise domestic operations free cash flow 4 Embed corporate sustainability in all activities 5
A strategy based on core capabilities and addressing changing market dynamics Changing market Rest of World Unique European position environment • Connecting European to • Supply chain optimisation • Dense intra-regional and domestic networks rest of the world • Fuel prices to remain high • Europe-Asia • Unique service portfolio • Growth direct to consumer Overcapacity issues • Broad customer base (B2C) persist with unrivalled customer • CEP Europe market still • Domestic emerging proximity fragmented platforms still loss- • Efficient operating making structure based on subcontractor model 6
New strategy – Building on Strengths Focus on Europe 1 Deliver improved financial Connect Europe with the rest of the world 2 performance and Explore partnerships for Brazil and China 3 maximise domestic operations free cash flow 4 Embed corporate sustainability in all activities 7
Unique European franchise TNT Express 1 � Focus Europe Unique service portfolio Market leadership � Connect rest of world � Domestic emerging • Product range – from parcels through • Market leader in traditional core market – partnerships � Corporate to freight value €20 billion sustainability • Overnight and day-definite • Europe is the ‘home’ market and stronghold • Cross-border, Europe-wide Other UPS DHL TNTE Same day TNT Express 10% Time certain/ Speed Next day 51% 15% 17% 7% Day certain/ Expedited DPD/La Poste Day uncertain/ 100% Standard Weight 1kg ~30 kg 1,000 kg 8
European network density providing unique market presence 1 � Focus Europe European road network European air network European footprint � Connect rest of world � Domestic emerging partnerships � Corporate sustainability • 39 countries • 44 aircraft in service • Unrivalled European • 20 road hubs footprint • 55 airports / 15 feeders • 85 international depots • 38 countries • Connecting 523 depots • 630 flights per week • 70% of customers by revenue • Late pick-up and early can be reached overnight by next-day delivery truck 9
Focus on Europe 1 Multiple growth opportunities in other segments � Focus Europe CEP market size at 2010 price level: 2010 = €60 billion; 2015 = €71 billion � Connect rest of world � Domestic emerging 35 16 4 13 3 TNT traditional core market partnerships � Corporate 1 TNT expanded core market sustainability Time Critical 5 • €38 billion 6 market in 2015 8 Express & 15 Economy 3 • Increase 3 market share in B2B intra- region 7 7 Deferred 15 • Expand in 1 other core segments Domestic Intra-region Inter- B2C C2C continental B2B 10
Delivering growth from our core market 1 � Focus Europe Integrated Europe wide customer proposition � Connect rest of world � Domestic emerging partnerships � Corporate Example – Southern Germany tariff zones sustainability • Zone pricing based on distance – Origin transcending geopolitical boundaries Zone 1 • Attractive proposition for new customers Zone 2 Zone 3 • Enabled by density of current Domestic Zone 4 networks plus high volumes underpinned by efficient operational gearing • Transition from traditional country-based hub and spoke networks to more next-day- by-road cross-border connections • Air network to focus on longest distance 11
Delivering growth from complementary segments 1 B2B core market, Time Critical and B2C for high value goods � Focus Europe � Connect rest of world Existing value-added New value-added � Domestic emerging partnerships � Corporate • Service parts logistics sustainability • Integrated Direct Express • High-end road freight High tech • Forward stock locations Average share of wallet 3-5% • B2C direct • Returns • Inner-city shop logistics • PharmaSafe – temperature controlled Health care • Clinical shipments • B2C direct • Hospital Express • Automotive Control Centres Automotive / • High-end road freight Industrial • Inbound materials management • Inner-city shop Logistics Life style • Shop-to-shop • B2C direct for high value goods 12
Leveraging existing networks – European B2C proposition 1 B2C for high value goods � Focus Europe � Connect rest of world � Domestic emerging TNT Express B2C revenue growth in 2011 >400% partnerships � Corporate sustainability Average RPC level for high-end parcels > €10 ‘Not at home’ reduction through pro-active SMS/ 30% e-mail messaging and Re-arrange Delivery website Consumers using alternative delivery addresses 20% 13
Delivering an optimal European infrastructure 1 � Focus Europe � Connect rest of world Optimisation opportunities � Domestic emerging partnerships � Corporate • Air Network optimisation (immediate) and sustainability re-design (medium-term) Unique infrastructure • Non-core business processes outsourcing (data-entry, admin back-office) • Combination of road and air networks • Indirect costs continued streamlining • Dense domestic networks • Country depot infrastructure re-design (medium-term) • Integrated operations based on common systems and processes • Optimisation programme targeting €150 million annualised fixed cost savings by end 2013 • €150 million restructuring costs and write-offs; ~€125 million cash On top of €50 million indirect cost savings programme and ongoing efficiencies 14
Integrated network optimisation 1 Our networks today – hub and spoke � Focus Europe � Connect rest of world � Domestic emerging partnerships � Corporate European road network European air network Local networks sustainability 15
Integrated network optimisation 1 Our networks tomorrow – moving from hub and spoke to web network � Focus Europe Immediate – More sectors per route Medium term – Web Network � Connect rest of world (fewer aircraft) � Domestic emerging partnerships � Corporate sustainability LGG RNS VIT TLS ZAZ VLC SVQ Regional hubs Current route Air Rail Future route Road 16
New strategy – Building on Strengths Focus on Europe 1 Deliver improved financial Connect Europe with the rest of the world 2 performance and Explore partnerships for Brazil and China 3 maximise domestic operations free cash flow 4 Embed corporate sustainability in all activities 17
Connect Europe with the Rest of the World 2 Reducing asset intensity � Focus Europe � Connect rest of world � Domestic emerging partnerships � Corporate sustainability Cooperation agreements • Preferred supplier agreements with key airline operators Requirements • Realise economies of scale and better • Customer service provision maintained connections to Europe • Capacity exposure optimised Reduce fixed air capacity • Code sharing arrangements • Divestment of aircraft • Reduce air capacity by ~50% 18
New strategy – Building on Strengths Focus on Europe 1 Deliver improved financial Connect Europe with the rest of the world 2 performance and Explore partnerships for Brazil and China 3 maximise domestic operations free cash flow 4 Embed corporate sustainability in all activities 19
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