Posti Group Corporation Interim Report Q2/2016 July 18, 2016 - PowerPoint PPT Presentation

Posti Group Corporation Interim Report Q2/2016 July 18, 2016

Contents • April-June 2016 • January-June 2016 • Business groups - Postal Services - Parcel and Logistics Services - Itella Russia - OpusCapita • Current topics • Appendices 2 Posti Group July 18, 2016

Growth in parcel and freight volumes • The first half of the year was a satisfactory one for Posti in a difficult market climate. The adjusted operating result improved both in April–June and in January–June in spite of lower net sales across all business groups. • Volumes of parcel and domestic road freight grew. • OpusCapita acquired the Germany-based software company jCatalog Software. • Posti signed an agreement to acquire a logistics company Veine. • Posti renewed its mail delivery with the aim of flexibly combining other services with delivery operations. The goal of the changes is to control the rise of unit costs in delivery operations. • Following the amendments to the Postal Act, the entire postal market is now open to free competition. • Posti’s universal service obligation will be discontinued for domestic parcels, but it will remain in effect for international parcels sent from Finland, weighing no more than 10kg. • 49.9% of the ownership of Posti Group Corporation will be transferred to a newly established development company. The Finnish State’s holding in Posti Group Corporation will remain at 50.1% at a minimum. • Posti specified the company’s strategic goals. The main strategic goals remain unchanged and Posti will continue on the path of renewal and growth. 3 Posti Group July 18, 2016

Volumes January-June 2016 Domestic freight Parcels Milion 20 1.16 1,25 17.3 1.11 17.0 units Million units 1 15 0,75 10 +4% Q2: +5% +2% Q2: +9% 0,5 5 0,25 0 0 H1-2015 H1-2016 H1-2015 H2-2016 OpusCapita’s electronic transactions Addressed letters 120 Million 500 Million 101.8 418 units units 388 100 400 85.5 80 300 60 -7% +19% 200 40 100 20 0 0 H1-2015 H1-2016 H1-2015 H1-2016 4 Posti Group July 18, 2016

Heavy traffic volumes are growing after declining for 47 months Change 12 months The development in main roads, heavy traffic Source: Finnish Transport Agency 5 Posti Group July 18, 2016

April-June 6 Posti Group July 18, 2016

Key events April-June + NET SALES • Comparable net sales grew by 3.3% in Parcel and Logistics Services. 500 0,0 % 0.0% • There were 3 more working days in Q2/2016 406.3 385.9 400 compared to Q2/2015. -5.0% -5,0 % • Domestic freight volumes grew by 9%, parcel 300 -5.0% volumes by 5%. 200 -10.0% -10,0 % • Itella Russia’s net sales increased by 3.4% 100 • Adjusted operating result improved in Parcel and -12.0% -15.0% 0 -15,0 % Logistics Services and in Itella Russia. Q2 2015 Q2 2016 • OpusCapita acquired the Germany-based software company jCatalog Software. MEUR Growth-% OPERATING RESULT, – adjusted • The Group’s net sales decreased by 5.0%. -0.2% • Adjusted operating result improved in Postal 0 0,0 % 0.0% Services and in OpusCapita. -0.9 • Net sales declined in Russia because of the -1,0 % -1.0% -1.7% -5 weakening of the ruble. -2,0 % -2.0% • The operating result was weighed down by special -6.8 items with personnel restructuring costs in domestic -10 -3,0 % -3.0% production operations representing the most Q2 2015 Q2 2016 significant proportion of this total. MEUR EBIT-% 7 Posti Group July 18, 2016

Key figures April-June 2016 • The Group’s net sales decreased by 4-6/ 4-6/ 5.0%. Comparable net sales declined by 2016 2015 3.1%. • Net sales decreased by 5.3% in Postal Net sales, EUR million 385.9 406.3 Services, by 1.9% in Parcel and Logistics Services, by 18.9% in Itella Russia and Adjusted operating result, EUR -0.9 -6.8 by 6.9% in OpusCapita. million* • The adjusted operating result improved Adjusted operating result, %* -0.2 -1.7 and was EUR -0.9 (-6.8) million. • The operating result was weighed down Operating result (EBIT), EUR -5.7 27.9 by special items in the amount of EUR - million 4.8 (+34.7) million, with personnel restructuring costs in domestic Operating result (EBIT), % -1.5 6.9 production operations representing the most significant proportion of this total. Result before taxes, EUR million -4.2 22.8 • The operating result declined and amounted to EUR -5.7 (27.9) million Result for the period, EUR million -3.1 17.0 • Mail items covered by the universal service obligation accounted for 3.8% of Gross capital expenditure, EUR 48.6 15.5 all of Posti’s mail items. million * excluding special items 8 Posti Group July 18, 2016

Change in costs* Q2/2015 => Q2/2016 * excluding special items 9 Posti Group July 18, 2016

January-June 2016 10 Posti Group July 18, 2016

Key events January-June + NET SALES • Adjusted operating result was at the previous 1000 0,0 % 0.0% 842.2 year’s level. 776.5 800 • Adjusted operating result improved in Postal -5.0% -5,0 % 600 Services. 400 • OpusCapita sold its businesses serving the local -7.8% -10.0% -10,0 % markets in the Baltic countries to BaltCap in -9.6% 200 January. -15.0% 0 -15,0 % • Itella Russia acquired the Russian courier company 1-6 2015 1-6 2016 MaxiPost in March. MEUR Growth-% – OPERATING RESULT, • The Group’s net sales decreased. • Net sales decreased in all business groups. adjusted • Adjusted operating result declined in Parcel and 14.0 13.7 15 6,0 % 6.0% Logistics Services, Itella Russia and OpusCapita. • The operating result was weighed down by special 10 4,0 % 4.0% items in the amount of EUR -15.0 (+34.7) million, 5 2.0% 2,0 % with personnel restructuring costs in domestic 1.6% production operations representing the most 1.8% 0 0.0% 0,0 % significant proportion of this total. 1-6 2015 1-6 2016 • The operating result declined. MEUR EBIT-% 11 Posti Group July 18, 2016

Key figures January-June 2016 1-6/2016 1-6/2015 • The Group’s net sales decreased by 7.8%. Comparable net sales decreased by 4.3%. Net sales, EUR million 776.5 842.2 • Net sales decreased by 4.5% in Postal Services, by 9.4% in Parcel and Logistics Adjusted operating result, EUR 14.0 13.7 Services, by 21.5% in Itella Russia and by million* 8.0% in OpusCapita. • The adjusted operating result improved and Adjusted operating result, %* 1.8 1.6 was EUR 14.0 (13.7) million. • The adjusted operating result improved in Operating result, EUR million -1.0 48.4 Postal Services and declined in Parcel and Logistics Services, in Itella Russia and in Operating result, % -0.1 5.8 OpusCapita. • The operating result was weighed down by Result before taxes, EUR million -0.7 44.2 special items in the amount of EUR -15.0 (+34.7) million, with personnel restructuring Result for the period, EUR million 0.3 32.8 costs in domestic production operations representing the most significant proportion of Return on equity (12 months), % 0.5 4.4 this total. • The operating result declined and amounted Return on invested capital (12 1.2 5.8 to EUR -1.0 (48.4) million. months), % • Investments increased. Capital expenditure Equity ratio 47.9 48.0 amounted to EUR 56.4 million. The Group invested in acquisitions, information systems, Gearing, % -4.2 7.9 the transport fleet, production projects during the quarter. Gross capital expenditure, EUR million 59.9 32.0 12 Posti Group July 18, 2016

Change in costs* 1-6/2015 => 1-6/2016 * excluding special items 13 Posti Group July 18, 2016

Employees Employees Postal Services by business Parcel and Logistics group Services • At the end of June, the Itella Russia number of employees stood at 21,905. The average OpusCapita number of personnel in Operations January-June was 20,838. Other functions • Of all employees 17,374 worked in Finland. • The Group’s personnel Number of employees in Finland and other countries expenses decreased by 5.0% 30 000 year-on-year. Without restructuring costs, personnel 25 000 expenses decreased by 7.2%. 20 000 • As of June 30, 2016, a total of 15 000 2,132 employees have Other countries applied for the Uusi polku 10 000 (New path) program, and Finland 5 000 1,566 have been accepted. 0 2012 2013 2014 2015 Jan 30, 2016 14 Posti Group July 18, 2016

Business groups 15 Posti Group July 18, 2016