4.th quarter presentation

Summary 2014
Norway Post
4th quarter and preliminary result 2014
Part 1:
§ 
Highlights and developments
CEO Dag Mejdell
Part 2:
§ 
Results and segment review
CFO Tone Wille
2
4th quarter and preliminary result 2014
Part 1:
§  Highlights and developments
CEO Dag Mejdell
3
Highlights – Important events in 2014
! 
The growth in e-commerce continues. In 2014, the Group's total ecommerce volume increased by 8%.
! 
The proposed new Postal Services Act has been out for public
consultation. The proposal entails the introduction of the EU's Third
Postal Directive.
! 
The need for effective operations in the Logistics segment drives
establishing combined terminals throughout the Group. 2 new
combined terminals in Norway and Finland completed in 2014.
! 
Established one common IT-plattform for the entire Group – cost
reductions already realized in addition to expected future substantial
cost reductions.
! 
Digipost, which is Norway Post’s digital mailbox, was chosen as one
of two suppliers of digital mail from the public sector.
! 
Absence due to sickness was 6.3% in 2014, a decrease of 0.3% percentage points from 2013.
! 
Awarded the Working Environment Prize 2014 and the Logistics
Industry Environment Prize 2014.
! 
Delivery quality for A-mail in 2014: 85,5 % (0,5%-percentage points
above the licence requirement).
! 
Lyngen Bidco AS offer to purchase the shares in Evry ASA (40% of
outstanding shares) has been accepted.
4
Financial highlights 2014
! 
Operating revenues:
MNOK 24 404, up 3,6 % from 2013
! 
Earnings before interest and taxes* :
MNOK 933, down 17,1 % from 2013
! 
Return on invested capital (last 12 months)*:
13,9 %, down 3,6 percentage points from 2013
! 
Return on equity after tax (last 12 months):
8,2 %, down 0,5 percentage points from 2013
* Before non-recurring items and write downs
5
Operating revenue
(MNOK)
3,6 %
25 000
20 000
15 000
22 613
22 451
22 981
2009
2010
2011
22 925
23.557
2012
2013
24 404
10 000
5 000
0
2014
6
Earnings (EBIT) before non-recurring items and write downs
(MNOK)
-17,1 %
1 000
1 125
500
0
772
952
1 051
1 116
2009
2010
2011
2012
933
2013
2014
7
Operating revenues from foreign companies
Operating revenues in MNOK
13,0 %
8 000
7 000
6 000
5 000
8 122
4 000
7 190
3 000
5 871
5 855
5 959
2008
2009
2010
6 443
6 434
2011
2012
4 886
2 000
Operating income from foreign companies
accounted for 33,3% of the Group’s
operating income, up 13,0 percent from last
year.
1 000
0
3 967
1 658
2005
2006
2007
2013
2014
8
Results
Q4
Q4
2014
2013
Change
MNOK
Year
2014
Year
2013
Change
24 404
23 557
847
1 723
1 875
-152
933
1 125
-192
Write-downs
282
245
37
Non-recurring expenses/(income)
-66
218
284
717
663
54
6 553
6 436
117
Operating revenues
614
814
-200
EBITDA
413
627
-214
EBIT before non-recurring items and
write-downs
139
121
18
-60
95
155
334
411
-77
EBIT before share of profit from
associates
86
-126
212
Share of profit from associates
126
-22
148
420
286
134
EBIT
844
641
202
-67
28
-95
Net financial items
-124
-21
-103
352
313
39
Earnings before tax
720
619
101
61
162
102
Taxes
214
108
-106
292
151
141
Profit after tax
506
512
-6
9
The 30% reduction in sickness absence from 2006 to 2014 has
led to major benefits
The benefits of a 30% lower sickness absence
rate are:
10,0 %
Sykefravær
9,0 %
§ 
500 more people at work each day
8,0 %
§ 
Savings of NOK 290 million for society
7,0 %
§ 
Norway Post saves just over NOK 200
million, of which:
6,0 %
2006
2008
2010
2012
- 
2014
NOK 77 million in extra pay/overtime
costs
- 
The sickness absence rate has fallen from 9.3% to
6.3% during the period
NOK 130 million in pension and
insurance costs
§ 
Positive attention, including the award of the
Working Environment Prize 2014
10
Norway Post needs a new Postal Services Act to meet future
developments and new user needs
! 
A new Postal Services Act is urgently
needed. Changes are taking place rapidly
and Norway Post can no longer sufficiently
compensate for the decline in physical
Bn units
letter volumes by increasing prices and
2,0
1,5
C Økonomi
(utgått)
introducing efficiency measures if the
-47%
statutory delivery service is not changed.
! 
B Økonomi
Oslo Economics has calculated that the
need for government procurements will be
NOK 2 billion annually in 2025 if no
-40%
1,0
measures are implemented.
! 
0,5
Norway Post wants greater freedom to act
so that it can adapt to rapid changes in its
A Prioritet
surroundings and customer requirements.
0,0
2000
2005
2010
2015
2020
! 
The winding up of Norway Post’s prevailing
monopoly through the implementation of
From 1.6 billion to 500 million letters
the EU’s Third Postal Directive is a political
decision.
11
Major investments. 18 new common terminals by 2018
Alta
Tromsø
Narvik
! 
Norway Post is investing
NOK 4 billion in new
common terminals for mail,
Fauske
parcels, goods and
Mo i Rana
refrigerated transport
goods by 2018.
! 
Trondheim
productivity and lead to
Molde
Ålesund
less strain on the
environment.
Sogn og
Fjordane
Hamar
Bergen
Haugesund
Intended to improve
Drammen
Stavanger
Kristiansand
Stokke
Oslo
Fredrikstad
Co-located terminals
Co-locating in 2015 to 2018
Ongoing assesement
12
Ecommerce is growing. Food boxes were a major new trend in
2014.
! 
The big trend during the year was having food delivered to
the door.
! 
Posten and Bring deliver for several food-box suppliers in
Norway and Sweden.
! 
In Sweden, the home delivery of food boxes has been
popular for several years. In 2014, Bring delivered around
550,000 food boxes, a 40% increase on the previous year.
! 
In Norway, food boxes really took off in 2014 and the volume
is approaching that in Sweden. Posten and Bring now deliver
11,000 food boxes a week, three times as much as at the
start of 2014.
13
4th quarter and preliminary result 2014
Part 2:
§ 
Results and Segments
CFO Tone Wille
14
Norway Post’s Segment Structure
group
mail
logistics
15
Segment distribution of external revenues
30 000
25 000
20 000
15 000
58 %
59 %
62 %
42 %
41 %
38 %
2012
2013
2014
10 000
5 000
0
Mail
Logistics
16
Segment Mail
mail
logistics
Letter Products
Banking services
Dialogue services
17
Key figures
mail
logistics
Operating revenues
! 
11 000
10 750
10 631
10 500
10 485
10 607
10 409
10 250
2010
Growth
(%)
2011
-0,2
2012
-1,9
2013
2014
0,7
-3,3
EBITDA
600
550
500
450
400
350
300
250
200
150
EBITDAmargin (%)
! 
Volume decrease addressed mail 6,5%
! 
Volume increase unaddressed advertising 1,4%
! 
Volume in Bring CityMail Sweden up by 4.0%
! 
First digital post distribution from public sector to
the citizen’s digital mailboxes in 2014.
! 
Earnings before depreciation and non-recurring items
in 2014 is positive, the volume decline was partially
offset by efficiency improvements implemented.
10 144
10 000
1
1
1
1
1
1
1
1
1
1
Operating revenues in 2014 decreased from last year
1 576
1 393
1 342
! 
New distribution structure and reorganization
of the post office network
! 
In 2014, 138 post offices were converted to
Post in Shops
1 252
1 246
2010
2011
2012
2013
2014
11,7
13,1
12,9
15,0
12,3
18
Segment Logistics
mail
logistics
Parcels
Express
Cargo
Frigo
Warehousing
Supply Services
19
Key figures
mail
Operating revenues
! 
16 500
15 943
logistics
Operating revenues in 2014 were 6,7 % higher
than in 2013
! 
Growth in e-commerce by 8 %
15 500
! 
Positive growth in freight volumes
15 000
! 
Acquired West Cargo Vårgårda AB,
Smartpak Sweden AB and Kirkestuen
Transport AS i 2014.
16 000
14 000
14 941
14 248
14 500
13 721
14 317
13 500
2010
Growth
(%)
2011
2012
3,8
0,5
2013
2014
4,4
6,7
! 
EBITDA
850
795
800
Result before depreciation and non-recurring items
in 2014 was positive compared to 2013.
! 
Cost reductions in Norway compensated for
lower prices and a shift towards lower margin
services.
! 
The logistics market in Sweden and Denmark
is still challenging, especially in the freight
and thermo sectors.
750
700
638
627
650
600
550
500
554
535
450
EBITDAmargin %
2010
2011
4,6
3,8
2012
4,4
2013
3,7
2014
5,0
! 
Norway Post builds the largest logistics center in
Norway located at Alnabru, Oslo. To be completed in
2017.
20
Outlook
! 
The new Postal Services Act is expected to be
presented for the Parliament.
! 
The Group continues targeted investment in logistics to
meet the large growth in e-commerce by building out
parcels network in Sweden and Denmark.
! 
Combined locations of terminal operations for mail,
parcels, freight and thermo are continuing.
! 
Digipost, the competition for additional users is
expected to increase in 2015. The Government has
expressed a goal to distribute all mail from the public
sector to the residents electronically by the first quarter
in 2016.
! 
Low growth in the Norwegian economy in 2015 due to
reduced demand from the petroleum industry and low
growth in households. Lower demand in the euro
countries for goods and services from Sweden.
21