TNT Express says restructuring plan “gaining momentum” as sales slip in Q2
Monday, July 29th, 2013
TNT Express recorded a EUR 280m loss in its second quarter, as sales slipped 3.1% compared to the same period last year.
The Netherlands-based integrator issued its latest financial figures today revealing revenues slipping to EUR 1.7bn, with operating income dropping from EUR 94m last year into the red.
Adjusting for one-off costs, the company’s underlying result for the quarter was a 1.1% decline in revenue, to EUR 1.74bn, with operating income down 27% to EUR 71m. Adjustments to operating income include €296m goodwill impairments and €53m fair value adjustments.
The company said it’s “Deliver” improvement strategy was “gaining momentum”, with an accelerated reorganisation of its Italian business underway, and the sale of its Brazilian business on course.
The sale of TNT’s Chinese domestic business is expected to be completed in the second half of this year.
TNT has also established streamlined company-wide functions, consulting with employee representatives as various cutback programmes are getting underway.
But, trading conditions in the second quarter continued to reflect generally challenging economic conditions, the company said, with a decline in profits in the core European market – Benelux, France, Germany, Italy and UK/Ireland – as a result of pricing pressure, mitigated by volume growth and savings.
The company said trading was good in the Americas as a whole, but lower weight per consignment had affected business in the Pacific region, while weaker economic growth and the introduction of VAT in China had affected Asian and African business.
Tex Gunning, the new TNT Express CEO, said: “During my first two months, I have had the pleasure to meet with many employees and customers around the world. These meetings have strengthened my confidence about our future: we have attractive market positions that we continue to develop thanks to our highly committed employees.
“But there are also many challenges – and trading conditions remain difficult. The Deliver! programme is therefore vital to improve our performance. We are making good progress in its implementation. We announced the restructuring of our Italian operations in June and will realise important milestones for our overhead and operational process improvement projects after the summer. We should start seeing benefits from Deliver! as the programme gains momentum.
“While visibility of the economy remains limited, we reiterate our 2015 ambitions,” added Gunning.
Looking ahead, TNT said it expected challenging trading conditions to continue for the rest of 2013, with operating results in Europe and the Americas likely to worsen, though Asia and Africa should perform better than last year.