Update Vision 2015 Q2 & HY 2010 Results Press Presentation Peter Bakker, CEO Bernard Bot, CFO 2 August 2010
Today’s announcement 1 • CFO 2 • Q2 & HY 2010 Results 3 • Vision 2015 2 2
Bernard Bot, Chief Financial Officer � Effective 2 Augustus 2010, appointment to member of Board of Management will be notified to shareholders in upcoming AGM in April 2011 � Works for TNT since 2005 within Finance � Business Control � M&A � Risk Management � Leading major corporate projects � Prior to joining TNT: partner at McKinsey & Company (primarily post, transport and logistics sectors) 3
Express summary Volumes back at around 2007 levels, though yield (excl fuel surcharge) and temporary cost pressures exist Margin improvement through yield and cost management Roll-out of additional owned Asia-Europe capacity to correct over-reliance on commercial linehaul Update Vision 2015 4 4
Q2 results highlights GROUP • Operating income € 55 million after initial € 168 million net Master plan III provision • Underlying* operating income € 211 million • Profit attributable to shareholders € 3 million • Cash, as expected, below prior year mainly due to phasing of taxes paid and changes in working capital • Interim 2010 dividend of € 28 cents per share 5 5
Q2 results highlights EXPRESS • Underlying* revenues increase of € 150 million (+10.3%) • Underlying* operating income € 73 million up 15.9% • Volumes back around 2007 levels (core kilos +9.5% versus Q2 2009) • Yield (excl fuel surcharge) down 2% MAIL • Underlying* revenues decline of € 28 million (-2.7%) • Underlying* operating income € 136 million (€ 139 million in Q2 2009) • Addressed mail volumes in the Netherlands declined by 8.4% (corrected for working days), Parcel volumes grew by more than 10% • Final restructuring programme (Master plan III) announced * The underlying figures are at constant currency and exclude the impact of working days and one-offs (Express: €3m restructurings,€2m book gain aircrafts; Mail €6m positive outcome OPTA case, €3m book gain sale subsidiaries, € 168 million net Master plan III provision; Group: €4m Vision 2015 projects) in 2010 and the impact of restructuring related costs/one-offs in 2009. 6
Consensus GDP forecast Europe eases Development of forecast consensus GDP growth (%) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 09 09 09 09 09 09 09 09 09 09 09 09 10 10 10 10 10 10 US 2010E consensus Europe 2010E consensus 7
Volumes continue to improve Express 2010 volumes versus prior year and 2007 (%) 15% 10% Core kilos* versus prior year Core cons* versus prior year 5% Core cons* versus 2007 0% Core kilos* versus 2007 -5% -10% -15% Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- 08 08 08 08 09 09 09 09 10 10 * Average per working day 8
Express underlying revenues up € 150 million Underlying revenues development € millions Underlying Volume Fuel Emerging Underlying Q2 2009 impact (cons) Price surcharge Platforms Other Q2 2010 1,450 1,600 Note: indicative only 9
Express underlying operating income increase € 10 million Operating income development € millions Volume Underlying impact Cost per Emerging Comm air Underlying Q2 2009 (cons) Price con Platforms* Brazil linehaul Other Q2 2010 63 73 Actions taken Note: indicative only * Excluding Brazil and commercial air linehaul 10
Margin improvement through yield and cost management Yield • +3.5% price announcement • Up-rating of underperforming • Customer mix contracts • Rebalancing customer portfolio • Product mix • Implementation of an improved pricing mechanism for significant • Pricing pressure part of the customer base Cost • Roll-out of additional owned • Mostly outside core markets Asia-Europe capacity • Commercial linehaul • Brazil • Further roll-out LEAN and GO • Higher cost inflation and efficiency programmes to investments in emerging outside Europe markets 11
Mail summary Strong performance Emerging Mail & Parcels Master plan III: final restructuring programme announced, € 168 million net provision established Master plan savings € 25 million 12 12
Master plan III: final restructuring in Mail Netherlands Fundamental cost-base transformation • Significant decrease of full time jobs t u o • Socially responsible implementation - 2015 l l o r d via forced and voluntary e u n i t n redundancies and � o C attrition 2012 First steps Infrastructure efficiencies and streamlining Inform and prepare 2010 operational processes Introduction of three peak days of delivery 2009 Centralisation of bag-level sortation Migration of labour costs towards market conforming levels 13
Outlook 2010 � Modest improvement European economy Overall � Global economic recovery remains fragile – caution is warranted � Focus on costs and cash will continue � Volumes and revenues expected to be well above 2009 levels Express � Operating income improvement clearly tempered by yield pressure and cost inflation � Specific yield management and cost reduction actions taken � Addressed volume decline in the Netherlands of 7-9% Mail � Master plan savings of € 75 million targeted � Mail operating income expected to be below 2009 levels, including the impact of higher P&L charges for pensions 14
Today’s announcement 1 • CFO 2 • Q2 & HY 2010 Results 3 • Vision 2015 15 15
Vision 2015 was launched on 3 December 2009 Vision 2015 1 2 3 4 5 Emerging Emerging Parcels Freight SDS Mail NL EMN SDS Platforms Platforms Cost leadership & customer focus 16
Vision 2015 has reviewed TNT’s portfolio Group Accelerate upside Cyclical and high growth ► Develop day-definite Realise upside ► delivery services through • Partner option EMN cost leadership and • Dutch parcels customer focus • New initiatives Pole position in emerging ► economies Current Mail Current CEP + = portfolio portfolio Cyclicality Prevent downside Structural volume ► decline Mail NL Challenges in ► liberalisation and regulation 17
On 8 April 2010 we announced the carve-out of Mail Carve-out Carve-out Review of Review of Vendor due Vendor due best position best position diligence diligence Mail Mail Business plans Business plans 18
Today TNT announces intended full separation � TNT announces its intention to separate fully Express and Mail � The objective: To create two best-in-class operations with strong management and solid capital structures to successfully implement their strategies for the benefit of their shareholders and all stakeholders � This intention is subject to works councils advice / opinion 19 19 19
Conclusions on portfolio � Strategic challenges for Express and Mail increasingly different � Mail and Express two successful standalone companies � Strong balance sheet – no synergies � Two focused investment opportunities 20 20
Express and Mail two successful standalone companies � Four focus areas: Parcels, Freight, SDS and Emerging Platforms � Attractive high-growth opportunities in each focus area confirmed Express Express � Expansion of leading positions in Europe and Emerging Platforms � Benefit from unique international offering � Track record as one of the best postal operators in the world � European mail activities to concentrate on the large countries Mail Mail � Explore business renewal options � Continued growth from Dutch parcel unit 21
Separation in stages � Full managerial and organisational internal Internal Internal separation Mail and Express separation separation � Implementation under TNT NV per 1 January 2011 � Evaluate capital market transaction � Relevant advisors have been appointed Separation Separation � Exploration will contain a.o. setup of solid capital of equity of equity structure review accounting and asset allocation; transaction transaction resolve regulatory issues; request for workers councils advice � Prepare shareholder approval 22
Next steps � Explore capital market transactions Group Group � Design transitory governance � Obtain works councils advice � Finalise business plans and capital structure Express Express � Design “standalone” organisation reflecting business plan � Finalise business plans and capital structure Mail Mail � Design “standalone” organisation � Resolve (USO) regulatory matters 23
Q2 & HY 2010 Results Bernard Bot, CFO 2 August 2010
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