4Q11 & FY11 Results TNT Express N.V.

by Press Release on 2012-02-22

21 February 2012

New strategy: Building on Strengths
- Profitable growth to be achieved by focusing on Europe and connecting the rest of the world
- Attractive European growth opportunities based on unrivalled networks and geographic footprint
- Optimisation programme in Europe & MEA targeting €150m fixed cost reduction by end of 2013
- Partnerships opportunities for domestic activities in Brazil (TNT Merçurio) and China (Hoau) to be explored

FY11 results: 2011 results in line with aims
- Reported revenues €7,246m (+2.7%); adjusted revenues (at constant FX) €7,251m (+2.8%)
- Reported operating income -€105m; adjusted operating income (at constant FX and excluding one-offs) €228m (-29.4%)
- Europe & MEA adjusted operating margin 8.4% on adjusted revenue growth of +2.1%
- Reported net profit -€270m (€66m 2010)
- Full year dividend €0.044 out of the distributable part of the shareholder's equity to be received in stock or in cash
- Strong balance sheet (€7m net debt at year end)

4Q11 results: weaker economic conditions impact results; tight cost and cash control
- Reported revenues €1,873m (+2.3%); adjusted revenues (at constant FX) €1,869m (+2.1%)
- Reported operating income -€104m; adjusted operating income (at constant FX and excluding one-offs) €57m (-32.9%)
- Reported net profit -€173m (€4m 2010)
- Net cash from operating activities €133m and net cash used in investing activities -€44m
- Brazil: €104m additional impairment based on 4Q11 value assessment
- €50m indirect cost savings programme implemented, approximately €30m annualised savings realised in 2011 with associated costs of €9m in 4Q11 (2011: €37m)

Commenting on the TNT Express’ new strategy, Marie-Christine Lombard, CEO said:

‘Today we announce our new strategy: ‘Building on Strengths’. Our franchise in Europe is unrivalled, with its unique service portfolio, dense networks and leading presence in all countries. This franchise gives us confidence in the future. We have ample opportunity to grow, not only in our traditional B2B segments but also in new services, such as PharmaSafe for the health-care sector or pan-European B2C deliveries for high value goods.

Our European cover and density enable us to transform our operating model and reduce fixed costs by €150m by the end of 2013. As a global company, our positions outside Europe remain critical to service our customers’ supply chains. The way we will do this will however change. We will reduce our exposure to fixed intercontinental capacity through cooperation agreements with leading airlines and we will explore partnership opportunities for our domestic activities in Brazil and China. Our objective is to strengthen our proposition to customers and employees while reducing our financial exposure. Given the uncertain economic environment, the year 2012 will be challenging. However, our leading market positions, together with management actions, make us confident we can realise our medium term growth and profit ambitions.’
 
Medium-term ambitions
- Europe & MEA revenue to grow organically and through new initiatives in adjacent market segments, with an operating margin increasing to 10-11% assuming normal economic conditions
- Positive contributions from operations outside of Europe & MEA
- Capital expenditure of around 3% of total revenue and trade working capital around 10%
- Effective tax rate trending towards 31-33%

Outlook for 2012
- Major uncertainty in the economic environment. Risk of European recession and slowdown in Asia
- Difficult start of the year in Europe & MEA, with general price pressure and negative volume growth International Express persisting
- Optimisation programme in Europe & MEA targeting €150m fixed cost reduction by the end of 2013 with related restructuring costs and write offs of €150m(approximately €125 m cash), on top of indirect cost savings programme
- Reduction of intercontinental fixed capacity
- Anticipated positive development of emerging domestic operations in Brazil and China – partnership opportunities to be explored
- Capital expenditures and working capital targets in line with medium-term ambitions

More detailed quarterly financial and operational information: www.tnt.com/corporate/4Q11datasheets