Transcript Q2 & HY 2010 Results *** Start transcript 00:00:00:00 00:00:00:28 Ernst Moeksis Good morning, ladies and gentlemen. Welcome at the press presentation half-year figures 2010 of TNT and Moeksis is my name; I am director of media relations. Present today are our CEO, Peter Bakker and our new CFO, Bernard Bot. Welcome, Bernard. Before starting with his presentation, Peter is going to introduce Bernard to you. 00:00:00:29 00:00:00:59 First and foremost Peter will give you an update with regard to Vision 2015 and the development of the business in the recent quarter. And Bernard will give detailed breakdown of our financial presentation in the quarter. Immediately after we have Q and A and we are going to answer to your questions. We start with the questions here in the room and those people who follow on line the presentation via the web, also have the opportunity to ask questions. Peter, you have the floor please. 00:00:01:00 00:00:01:52 Peter Bakker Yes, good morning. Welcome second quarter presentation of TNT. We have more details than only with reference to the second quarter. I would like to highlight three questions: CFO, second quarter, first half year and I will give you a breakdown of the entire year and also we will make comments about Vision 2015. Bernard Bot on my right. Per yesterday he was appointed CFO of TNT. Of course we are disappointed with regard to the departure of Henk van Dalen. 00:00:01:53 00:00:02:36 He found another job at Vimpelcom to become CFO there and he took this appointment there. We congratulate him, but this is a loss on our side of course. Henk, in recent years has done a lot of good work to see to it that the financial structure is invigorated again and furthermore he has seen to it that we have an excellent successor in house who has grown up here and that is Bernard Bot and I am very rejoiced that Bernard, we could appoint him and I am looking forward together with him with regard to TNT to pass the next few years with him. 00:00:02:37 00:00:03:10 You see a few of his previous experience at McKinsey and in the last recent five years also he has been working within our own company. Bernard later on will give you a breakdown of the details financially. Ok, let’s start here. These are the highlights of the group. You have seen that in the second quarter fifty-five million (€55,000,000) EBIT was realised. 00:00:03:11 00:00:03:34 This seems to be a big drop over the same period last year when we got one-hundred and seventy- eight million (€178,000,000) EBIT. But I must tell you, please keep in mind that one sixty-eight million (€168,000,000) one off was taken and this was a provision taken with regard to the large reorganisations which within mail a few weeks ago were announced and were taken. 00:00:03:35 00:00:04:01 Underlying we have two-hundred and eleven million (€211,000,000) which is up on the prior year. The cash flow in the quarter was lower than in the previous quarter of last year, in the same quarter of last year. Last year we had a deferred tax payment and this year we had premature tax payments and this swing alone made a difference of three-hundred million (€300,000,000) and this explains roughly the entire cash flow degradation. 1
00:00:04:02 00:00:04:31 The interim dividend, which we will pay out, is twenty-eight eurocents (€0.28) per share and this is being calculated to be forty percent (40%) of the so-called normalised net income and this has happened now again. This will be made available to shareholders as a choice between cash and shares. Within express in the second quarter we have seen that a good volume growth, which we saw in the first quarter, was continued. 00:00:04:32 00:00:05:14 The volumes are back around the 2007-levels and even higher than that sometimes. 2007 is the last year before the economic crisis. In terms of volume we have got back to around 2007-levels. The average price however has not returned to the same level. This quarter within express we still saw price pressure. And the sum total of this is that nine and a half percent (9.5%) growth in the core kilograms, we have much higher growth in the areas outside of Europe, like in South America and China, much higher than ten percent (10%) growth there and this leads to roughly ten percent (10%) increase of sales. 00:00:05:15 00:00:05:45 And if the number of extra workdays and currency effects are taken into account, then we have an increase of eighteen percent (18%) in terms of sales. Mail we had a stable quarter. Before the year we said between seven and nine percent (7-9%) volume decline within mail. This quarter it was eight point four percent (8.4%) this decline. This is within the bandwidth announced. This is also our expectation for the remainder of the year. 00:00:05:46 00:00:06:29 Strong growth we experience within the parcel sector. More than ten percent (10%). This means that we have a situation where two point five to two point seven percent (2.5-2.7%) we are lower than the sales. Profit is roughly at the same level of last year. Since the beginning of the economic crisis we show you what economists around us think will happen in gdp-growth. In comparison to Europe and the USA, the USA is the upward line here and you see that the recovery there has taken place earlier and is happening at a higher level. 00:00:06:30 00:00:07:10 Also in Europe we are on a stable path I think and on average we have a better performance in the business cycle, but it is a year on year comparison and we depart from a rather bad level in 2009. That means that in Europe growth is on the recovery road, but mainly in the recent period we have seen that the growth from China and inside China is really vigorous and strong. For express, this translates into volumes back to the level of 2007. 00:00:07:11 00:00:07:49 The margin is improving, but it has to improve further and this we will do by working on the average price side and cost side. What we have seen as well, is that particularly the air cost from China to Europe in recent months has shown a very vigorous increase, because capacity is not sufficient for these lanes. We will be working here to have more of our own aircraft connections. So, an extra Boeing 747 was added to our aircraft fleet and I do expect in the next few months that more announcements may be made. 00:00:07:50 00:00:08:22 This picture, I don’t know whether you can see it properly. Here you see what I already told you, the lower two lines indicate that we roughly have got back to the level of 2007, in kilograms not entirely. In the consignments however we have reached the previous level, but compared to 2009, the quarter, we have demonstrated stable growth in comparison to the quarter of the previous year. 00:00:08:23 00:00:08:52 The good growth, which we saw in the first quarter in kilograms and in consignments, was continued in the second quarter. And from one point four, one point five billion (1,400,000,000-1,500,000,000) how do you get to one point six billion (1,600,000,000)? Sales, this is the most important. The volume has been so extremely important, much growth from volumes we were able to realize. This was however partly offset by lower average pricing. 2
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