TNT N.V.
TNT N.V. INTERIM RESULTS:
-- Strong margin in Mail of 20.8%
-- Record high margin in Express of 10.1%
-- Mixed picture in Contract Logistics
-- Interim dividend up 10% to 22 cents
Key numbers Q2 2005 Q2 2004 % Change
EUR m EUR m
Revenues 3,385 3,056 10.8%
Operating income (EBIT) 342 352 -2.8%
Profit / (Loss) attributable to the
shareholders 210 210 0.0%
Net cash from operating activities 384 115 233.9%
Earnings per share (EUR cents) 46.1 44.2 4.3%
Operating margin Q2 2005 Q2 2004
Mail 20.8% 23.4%
Express 10.1% 8.8%
Logistics 3.4% 4.1%
Contract Logistics 3.7% 4.1%
Freight Management 2.2% nm
Key numbers HY 2005 HY 2004 % Change
EUR m EUR m
Revenues 6,661 6,037 10.3%
Operating income (EBIT) 646 648 -0.3%
Profit / (Loss) attributable to the
shareholders 403 396 1.8%
Net cash from operating activities 459 406 13.1%
Earnings per share (EUR cents) 88.6 83.3 6.4%
Operating margin HY 2005 HY 2004
Mail 21.4% 23.2%
Express 9.1% 7.4%
Logistics 2.4% 3.2%
Contract Logistics 2.6% 3.2%
Freight Management 1.5%
CEO Peter Bakker:
"In the second quarter of this year we see a continued good performance of our
Mail and Express divisions. The Mail division reported another strong operating
margin, despite higher pension costs, and our European Mail Networks business
continued to record strong organic revenue growth of 20%. Express revenues grew
double digit and operating income was up 28%, reaching another margin record.
The division is firmly on track to reach its ambitious target of a 10% operating
margin in 2007. In Logistics, our freight management operations continue to make
progress but achieving growth in some of our contract logistics business has
been difficult. We have reviewed our French Logistics business unit carefully
and today we announce our plans - we intend to withdraw from basic transportion
activities and refocus on the areas of contract logistics where we can earn our
cost of capital."
Report by the Board of Management Press
Group overview
In the second quarter, the group achieved a 10.8% revenue increase. Express
reached another record margin of over 10%, with double digit growth, and Mail
achieved a margin of almost 21%, with revenue growth in both European Mail
Networks and Mail Netherlands. Logistics, affected by the continuing
difficulties in France, saw a slight margin decline.
In Logistics France, we announce plans to refocus our operations to areas where
TNT can earn its cost of capital, reasserting our commitment to the French
logistics market.
Review of operations
Mail achieved an operating margin of almost 21%, despite the EUR 20 million
increase in pension costs. The division handled 19 million more addressed mail
items than the comparative period last year due to the strong growth of the
European Mail Networks. EMN grew organically by almost 20%. In the Netherlands,
revenues were up by 0.6%, as price mix effects outweighed a 2.5% addressed mail
volume decline, and next day delivery exceeded 97%. Cross-border revenues
continued their negative trend and Data and Document Management grew total
revenues with the addition of the call center joint venture.
Express booked another record margin, this time of 10.1%, and organic revenue
growth remained at the high end of our expectations, at 10.6%. The resulting
operating income improvement was 27.7%. In Europe, international air volumes
were 9% higher and road volumes 7% higher, with kilos growth outpacing
consignments. We saw no adverse impact of higher fuel costs. Network
optimisation improved, particularly in respect of air volume utilisation.
Revenue yield remained positive.
Logistics revenue growth came from the addition of freight forwarding activities
(the Wilson acquisition), which are progressing well. Organic growth was
strongly positive in North America and Rest of World, but negative in Europe as
certain units faced either general market or client specific issues. In the case
of France, structural inability to deal with weakness in the transportation
sector weighed on the results. Some European units did show healthy growth,
including Germany. The contract logistics margin, excluding France, softened
from 4.9% last year to 4.7% this year, affected by higher fuel prices. The
freight management margin was 2.2%. On a more positive note, contract gains were
well in excess of terminations and the business development pipeline
strengthened.
TNT Logistics France refocus
Our logistics activities in France consist of transportation, which represents
around 60% of the business, and contract logistics, which represents the
remaining 40%. Losses in the first half of this year were EUR 17 million, on
revenues of EUR 117 million.
We intend to sell our transportation activities. Strong network coverage is a
key success factor in this business, which TNT does not possess.
In contract logistics, we will refocus on parts of the business where TNT can
earn its cost of capital, including complex supply chain solutions for the
automotive industry. We intend to sell the parts of the contract logistics
business that do not fit into this strategy.
We are in contact with potential buyers and we expect the majority of our
intended actions to be executed by the end of 2005. We estimate the total P&L
charge relating to these measures to be up to EUR 140 million, pre-tax, most of
which we expect to book in 2005.
Financial review
Group EBIT was EUR 342 million, a 2.8% decrease on last year. This result was
affected by non-allocated costs of EUR 28 million, a EUR 18 million increase on
last year due to spending on business initiatives - including China and
re-branding - and other corporate costs. Net financial expenses were EUR 22
million, slightly lower than last year, despite the debt increase, due to lower
interest rates and finance charges. The effective tax rate was 34.7%, slightly
lower than last year. The profit attributable to shareholders was EUR 210
million, equal to last year's. Earnings per share increased by 4.3% to 46.1
cents due to the repurchase of 20.7 million shares.
Net cash from operating activities was particularly strong at EUR 384 million,
EUR 269 million more than last year. This quarter's result benefited from an
anticipated EUR 132 million tax refund and the phasing of payments. Capital
expenditure was EUR 97 million, EUR 19 million more than last year, and included
the planned infrastructure improvements in Express.
On 12 July, the State sold 43.4 million TNT shares in the market, with the
result that its holding is now reduced to 10% of the share capital.
The tax investigations previously disclosed are ongoing, and it remains too
early to determine their effect for the group.
Strategic progress
Each of the five streams of TNT1 made progress, with the results of the
procurement team most tangible. Realised savings to date, from 'Wave 1', were
EUR 7 million of which EUR 2 million was passed on directly to our customers.
'Wave 2' started in May.
On 18 April, TNT signed a cooperation agreement with Norway Post, with both
parties then forming a task force to identify areas of mutual interest in the
Nordics. On 24 June, TNT announced that it is not participating in the Belgian
Post sales process and reconfirmed its strategy of challenging incumbent postal
operators through its European Mail Networks, in cases where the terms of
cooperation with the incumbent would not be mutually beneficial.
2005 guidance reiterated
In Mail, we expect total revenues to be stable, with gains in EMN countering
declines in Dutch addressed volumes. We expect a strong operating margin of 19%
to 20%. In Express, we expect high single digit revenue growth and an operating
margin in the range of 8.5% to 9.0% - on track to the "10% in 2007" target. In
Contract Logistics, we expect revenues to remain stable with a margin of around
4%, excluding France. In Freight Management (Wilson acquisition), we expect
revenues to grow high single digit, with an operating margin of around 1.5%,
after charging amortisation of intangible fixed assets recognised on acquisition
and integration costs.
Significant events in the second quarter
18 April Extension of cooperation agreement with Norway Post announced
21 April TNT Express Netherlands wins prestigious Dutch Quality Institute Award
2 May TNT Logistics chosen as European parts logistics provider by Getronics
10 May Strategic partnership announced for clinical trials infrastructure -
TNT Express and AirNet systems
18 May TNT Mail UK wins Lloyds TSB contract 19 May TNT Logistics Brazil wins
Fiat's 'Best Quality Performance' award
9 June TNT Express acquires Slovenia's domestic transport company -
'Door-to-Door'
12 June TNT and United Nations World Food Program 'Walks the World'
24 June TNT confirms no participation in Belgian Post sales process 29 June
TNT announces new easy-access parcel service in Belgium
30 June Wilson Logistics re-branded to TNT Freight Management.
1 July TNT Logistics selected by MAN Nutzfahrzeuge as pan-European spare
parts logistics partner
12 July State sells 43.4 million TNT shares, taking its holding down to 10%
Q2 Summary
Group Summary Q2 2005 Q2 2004 % Change
EUR m EUR m Operational FX Total
Revenue 3,385 3,056 10.7% 0.1% 10.8%
Operating income (EBIT) 342 352 -2.8% 0.0% -2.8%
Profit / (Loss)
attributable to the
shareholders 210 210 0.5% -0.5% 0.0%
Divisional Summary Q2 2005 Q2 2004 % Change
EUR m EUR m Operational FX Total
Mail
Revenue 965 946 2.0% 0.0% 2.0%
Operating income 201 221 -9.0% 0.0% -9.0%
Operating margin 20.8% 23.4%
Express
Revenue 1,279 1,154 10.7% 0.1% 10.8%
Operating income 129 101 27.7% 0.0% 27.7%
Operating margin 10.1% 8.8%
Logistics
Revenue 1,160 966 19.7% 0.4% 20.1%
Operating income 40 40 0.0% 0.0% 0.0%
Operating margin 3.4% 4.1%
Non-allocated (28) (10) -180.0% 0.0% -180.0%
Operating income (EBIT) 342 352 -2.8% 0.0% -2.8%
Half Year
Group Summary HY 2005 HY 2004 % Change
EUR m EUR m Operational FX Total
Revenue 6,661 6,037 10.6% -0.3% 10.3%
Operating income (EBIT) 646 648 -0.1% -0.2% -0.3%
Profit / (Loss)
attributable to the
shareholders 403 396 2.3% -0.5% 1.8%
Divisional Summary HY 2005 HY 2004 % Change
EUR m EUR m Operational FX Total
Mail
Revenue 1,946 1,922 1.3% -0.1% 1.2%
EBIT 417 446 -6.5% 0.0% -6.5%
Margin 21.4% 23.2%
Express
Revenue 2,485 2,248 10.9% -0.4% 10.5%
EBIT 225 166 35.5% 0.0% 35.5%
Margin 9.1% 7.4%
Logistics
Revenue 2,260 1,886 20.2% -0.4% 19.8%
EBIT 55 60 -8.3% 0.0% -8.3%
Margin 2.4% 3.2%
Non allocated (51) (24) -116.7% 4.2% -112.5%
Operating income (EBIT) 646 648 -0.1% -0.2% -0.3%
-- Strong growth continues in EMN, at almost 20%
-- Margin almost 21%, despite higher pension costs
-- Next day delivery over 97%
Mail Summary Q2 2005 Q2 2004 % Change HY 2005 HY 2004 % Change
EUR m EUR m EUR m EUR m
Revenue 965 946 2.0% 1,946 1,922 1.2%
Operating income 201 221 -9.0% 417 446 -6.5%
Operating margin 20.8% 23.4% 21.4% 23.2%
Mail division achieved 1.8% organic revenue growth and another strong margin
performance. Excluding the higher pension costs, this quarter's margin was only
half a percentage point behind the unusually high level achieved last year.
In the Netherlands, another 47 sequence sorting machines came into operation,
bringing the total number now in service to 238.
The roll out of this technology helped towards the additional masterplan savings
of EUR 17 million in the quarter. Next day delivery increased to over 97%.
Across its European operations, TNT Mail delivered more addressed mail items
than in the same quarter last year. EMN delivered 51 million more and Mail
Netherlands delivered 32 million less.
Revenue Analysis Q2 2005 Q2 2004 % Change % Change
EUR m EUR m Organic Acq FX
Mail Netherlands 643 639 0.6% 0.6% 0.0% 0.0%
Cross Border 125 136 -8.1% -8.1% 0.0% 0.0%
European Mail Networks 145 121 19.8% 19.8% 0.0% 0.0%
Data & Document
Management 52 50 4.0% 0.0% 4.0% 0.0%
Mail 965 946 2.0% 1.8% 0.2% 0.0%
Revenue Analysis HY 2005 HY 2004 % Change % Change
EUR m EUR m Organic Acq FX
Mail Netherlands 1,311 1,313 -0.2% -0.2% 0.0% 0.0%
Cross Border 251 276 -9.1% -8.7% 0.0% -0.4%
European Mail Networks 279 230 21.3% 21.3% 0.0% 0.0%
Data & Document
Management 105 103 1.9% -3.0% 4.9% 0.0%
Mail 1,946 1,922 1.2% 1.0% 0.3% -0.1%
Mail Netherlands revenues grew by 0.6%, with positive price/mix effects
countering a 2.5% volume decline. The election-adjusted volume of addressed
domestic mail declined by 0.9% and direct declined by 3.4%. However, these
results benefited from a 2.4 percentage point day-count effect. Reduced bank
transactional mailings affected the underlying domestic decline. Growth in
unaddressed mail revenues remained at 5%.
Cross Border exhibited the same trends as the last quarter, with declines in
Spring and TNT branded business leading to an overall 8.1% revenue decrease.
European Mail Networks continued to make good progress, recording an almost 20%
organic revenue growth. EMN handled 51 million more items of addressed mail than
in the same quarter last year, with the UK and Germany making the most progress
in this part of the market. TNT Mail UK added Lloyds TSB to its list of
important customers, with an estimated 100 million items of mail annually.
Data & Document Management revenues continued to reflect the acquisition effect
of the BSC call centre venture. Organic revenues were flat, which was an
improvement on recent declines reflecting higher volumes in the Dutch document
management business.
-- All time record margin of 10.1%
-- Operating income up 27.7%
-- Double digit growth in both Europe and Rest of World
Express Summary Q2 2005 Q2 2004 % Change HY 2005 HY 2004 % Change
EUR m EUR m EUR m EUR m
Revenue 1,279 1,154 10.8% 2,485 2,248 10.5%
Operating income 129 101 27.7% 225 166 35.5%
Operating margin 10.1% 8.8% 9.1% 7.4%
The division achieved an operating income growth of 27.7%, compounding the
strong growth achieved last year. This is despite the higher fuel costs, which
because of the surcharge have not dented the bottom line performance.
Organic revenue growth of 10.6% was at the high end of our expectations and
repeats the trends of recent quarters, including the strong increase in
cross-border flows.
Utilisation in the European air network was close to 79%, six percentage points
more than last year due to greater volumes and improved capacity planning.
Revenue Analysis Q2 2005 Q2 2004 % Change % Change
EUR m EUR m Organic Acq FX
Express Europe 1,037 943 10.0% 10.2% 0.1% -0.3%
Express RoW 242 211 14.7% 12.8% 0.0% 1.9%
Express 1,279 1,154 10.8% 10.6% 0.1% 0.1%
Revenue Analysis HY 2005 HY 2004 % Change % Change
EUR m EUR m Organic Acq FX
Express Europe 2,029 1,836 10.5% 10.7% 0.1% -0.3%
Express RoW 456 412 10.7% 11.2% 0.0% -0.5%
Express 2,485 2,248 10.5% 10.9% 0.0% -0.4%
Express Europe continued to benefit from the same revenue trends as recent
quarters, particularly as regards the importance of cross-border flows and
growth in special services. Despite mixed, and in some case deteriorating,
national economic conditions, all units put in a good growth number. The major
west European units saw growth of between 7% (Italy) and 13% (Germany), with
East European units growing even faster: 20% in total. Revenue yield was 5.3%,
two thirds of which came from the fuel surcharge. Air volumes were up 9% and
international road volumes were up 7%. However, kilos growth (7%) outpaced
consignments (4%), benefiting from TNT Express' ability to provide an express
product also for heavy items.
Express Rest of World grew 12.8% in aggregate. In China, the growth rate was
over 27%. The Middle East grew 24%, and South East Asia and the Americas were in
firm double digit growth territory. The RoW average continued to be affected by
Australia where a more modest 2.4% organic revenue growth was recorded - the
slowing economy and some shedding of unprofitable contracts being the key
factors.
-- France Logistics refocuses to areas where it can earn its cost of capital
-- Market or client specific challenges for some units
-- Intensified efforts in Key Account Management leads to contract wins
Logistics Summary Q2 2005 Q2 2004 % Change HY 2005 HY 2004 % Change
EUR m EUR m EUR m EUR m
Revenue 1,160 966 20.1% 2,260 1,886 19.8%
Operating income 40 40 0.0% 55 60 -8.3%
Operating margin 3.4% 4.1% 2.4% 3.2%
Revenue growth in Logistics came from the Freight Management acquisition.
Organic revenue growth in North America was strong but revenues in Europe were
lower. Annualised contract wins of EUR 135 million compared with terminations of
EUR 85 million represented an improvement over the previous quarter and came at
a time of increased focus on Key Account Management.
The operating margin softened compared with last year, affected by the
difficulties in France, and the first-time inclusion of the freight management
activities. The 2.2% margin for freight management included integration expenses
and amortisation of intangible assets arising on acquisition, without which the
margin would have well exceeded 4%.
Revenue Analysis Q2 2005 Q2 2004 % Change % Change
EUR m EUR m Organic Acq FX
Logistics Europe 692 726 -4.7% -4.6% 0.0% 0.1%
Logistics North
America 169 150 12.7% 14.0% 0.0% -1.3%
Logistics RoW 105 90 16.7% 10.0% 0.0% 6.7%
Logistics Freight
Management 194 0
Logistics 1,160 966 20.1% -0.4% 20.1% 0.4%
Revenue Analysis HY 2005 HY 2004 % Change % Change
EUR m EUR m Organic Acq FX
Logistics Europe 1,370 1,424 -3.8% -3.5% 0.0% -0.3%
Logistics North
America 324 290 11.7% 14.8% 0.0% -3.1%
Logistics RoW 189 172 9.9% 7.0% 0.0% -2.9%
Logistics Freight
Management 377 0
Logistics 2,260 1,886 19.8% 0.2% 20.0% -0.4%
Contract Logistics
In Europe, revenues declined by 4.6% overall, organically. Germany was ahead on
automotive volumes and new contracts. Spain and Turkey were ahead on higher
volumes, some tariff increases and new contracts in several industry sectors.
However, the UK declined in the face of weak market conditions generally, Italy
Automotive faced a client specific volume loss and France continued to be
hampered by a tough transportation sector, not helped by own network
limitations.
North America scored its third straight quarter of strong double digit revenue
growth. The fastest growing sector remained automotive, demonstrating that high
quality, value added service can drive growth in this challenging sector.
Rest of World organic growth picked up to reach 10.0%. The only business that
saw declines versus last year was China automotive. However, two new contracts
for spare parts logistics were won for VW China. South American revenues
continued to do well, based largely on the automotive sector. In Brazil,
significant new contracts were signed in the hi-tech and automotive parts
sectors. Revenues in Australia were up almost 25% on last year, again automotive
driven.
Freight Management revenues increased on a pro-forma basis (comparative results
were not under TNT ownership) by around 5%. The integration made further
progress, most noticeably with the re-branding of Wilson to TNT.
France Logistics Q2 2005 Q2 2004 % Change HY 2005 HY 2004 % Change
EUR m EUR m EUR m EUR m
Revenues 59 65 -9.2% 117 134 -12.7%
Operating income (7) (4) -75.0% (17) (7) -142.9%
France Logistics comprises around 60% basic transportation activities and 40%
contract logistics. It represents 2% of the group's turnover.
The business was created through a series of acquisitions between 2000 and 2002.
In its first two years of operation, it produced a positive operating margin,
which turned negative in 2002 and further deteriorated in 2003. The
Transformation through Standardisation measures launched in mid-2003 improved
financial performance but did not return the business to profitability. As a
result of deteriorating market conditions, the results this year have lagged
behind those of the prior year.
The business faces tough external challenges including intense competition in
the transportation sector and slow growth in contract logistics. Our lack of an
integrated national network represents a barrier to progress.
Following a detailed review of our activities and the market in France, we
announce our intention to withdraw from basic transportation and elements of our
contract logistics operations. We remain committed to the French logistics
market, but in areas where we are best able to add value, including complex
supply chain solutions. As regards those parts of the business from which we
intend to withdraw, we are in discussions with potential buyers.
Quarterly Information Group
Q2 2005 Q2 2004 HY 2005 HY 2004
EUR m EUR m EUR m EUR m
Net sales 3,370 3,026 6,631 5,992
Other operating revenue 15 30 30 45
Total revenue 3,385 3,056 6,661 6,037
Other income 4 2 11 6
Cost of materials (156) (156) (298) (283)
Work contracted out and other
external expenses (1,460) (1,208) (2,858) (2,417)
Salaries incl social & pension
charges (1,130) (1,069) (2,266) (2,148)
Depreciation, amortisation and
impairments (100) (98) (198) (186)
Other operating expenses (201) (175) (406) (361)
Total expenses (3,047) (2,706) (6,026) (5,395)
---------------- ----------------
Operating income 342 352 646 648
Interest and similar income 16 6 39 10
Interest and similar expenses (38) (29) (66) (49)
Net financial (expense) / income (22) (23) (27) (39)
---------------- ----------------
Profit before income taxes 320 329 619 609
Income taxes (111) (116) (215) (209)
Results from investments in
associates 0 (1) (1) (2)
---------------- ----------------
Profit for the period 209 212 403 398
Profit / (Loss) attributable to
minority interests (1) 2 0 2
Profit / (Loss) attributable to the
shareholders 210 210 403 396
Earnings per share (in euro cents)* 46.1 44.2 88.6 83.3
================ ================
Number of employees 161,411 160,458
Full time equivalent employees 122,212 121,536
================
* Based on an average number of 454.7 million ordinary shares,
including ADS (2004: 475.2 million).
Quarterly Information Mail
EUR m Q2 2005 Q2 2004
MAIL
Mail Netherlands
Revenue 643 639
Growth % 0.6%
Organic 0.6%
Acquisition / Disposal 0.0%
Fx 0.0%
Adressed mail pieces (millions) 1,246 1,278
Growth % -2.5% -1.5%
Working days 63 61
Cross Border
Revenue 125 136
Growth % -8.1%
Organic -8.1%
Acquisition / Disposal 0.0%
Fx 0.0%
European Mail Networks
Revenue 145 121
Growth % 19.8%
Organic 19.8%
Acquisition / Disposal 0.0%
Fx 0.0%
Data & Document Management
Revenue 52 50
Growth % 4.0%
Organic 0.0%
Acquisition / Disposal 4.0%
Fx 0.0%
Total Mail
Revenue 965 946
Growth % 2.0%
Organic 1.8%
Acquisition / Disposal 0.2%
Fx 0.0%
Operating income (EBIT) 201 221
Operating margin 20.8% 23.4%
Note that 2004 growth data is excluded from these tables because conversion to I
with an effective transition date of 1 January 2004, renders 2003 data
incomparable with the results of later years.
Quarterly Information Express
EUR m Q2 2005 Q2 2004
EXPRESS
Express Europe
Revenue 1,037 943
Growth % 10.0%
Organic 10.2%
Acquisition / Disposal 0.1%
Fx -0.3%
Core consignments (mil) 36.7 35.4
Core kilos (mil) 604.9 566.5
Core revenue quality yield improvement 5.3% 3.6%
Express RoW
Revenue 242 211
Growth % 14.7%
Organic 12.8%
Acquisition / Disposal 0.0%
Fx 1.9%
Total Express
Revenue 1,279 1,154
Growth % 10.8%
Organic 10.6%
Acquisition / Disposal 0.1%
Fx 0.1%
Working days 63 62
Operating income (EBIT) 129 101
Operating margin 10.1% 8.8%
Note that 2004 growth data is excluded from these tables because conversion to
IFRS, with an effective transition date of 1 January 2004, renders 2003 data
incomparable with the results of later years.
Quarterly Information Logistics
EUR m Q2 2005 Q2 2004
LOGISTICS
Logistics Europe
Revenue 692 726
Growth % -4.7%
Organic -4.6%
Acquisition / Disposal 0.0%
Fx -0.1%
Logistics North America
Revenue 169 150
Growth % 12.7%
Organic 14.0%
Acquisition / Disposal 0.0%
Fx -1.3%
Logistics RoW
Revenue 105 90
Growth % 16.7%
Organic 10.0%
Acquisition / Disposal 0.0%
Fx 6.7%
Logistics Freight Management
Revenue 194 0
Growth % 0.0%
Organic 0.0%
Acquisition / Disposal 0.0%
Fx 0.0%
Total Logistics
Revenue 1,160 966
Growth % 20.1%
Organic -0.4%
Acquisition / Disposal 20.1%
Fx 0.4%
Revenues by sector
Automotive 382 388
Tyres 46 55
FMCG 164 157
Hi-tech electronics 121 137
Publishing / media 59 57
Freight management 194 0
Other 194 172
Operating income (EBIT) 40 40
Operating margin 3.4% 4.1%
Note that 2004 growth data is excluded from these tables because conversion to
IFRS, with an effective transition date of 1 January 2004, renders 2003 data
incomparable with the results of later years.
Consolidated cash flow statement
Q2 2005 Q2 2004 HY 2005 HY 2004
EUR m EUR m EUR m EUR m
Profit before income taxes 320 329 619 609
Adjustments for:
Depreciation, amortisation and
impairments 100 98 198 186
Investment income:
- profit /loss on sale of property,
plant and equipment (3) (3) (10) (11)
- interest and similar income (17) (6) (40) (10)
- foreign exchange gains 0 0 0 0
- foreign exchange (losses) (1) 3 0 2
- interest and similar expenses 40 26 67 47
Changes in provisions:
Pension liabilities (44) (82) (55) (115)
Other provisions 34 4 32 (2)
Changes in working capital:
Inventory (2) (3) (2) 1
Trade accounts receivable 26 81 6 129
Other current assets 26 19 (46) (61)
Trade payables (5) (56) (68) (92)
Other current liabilities excl. short
term financing and taxes (144) (169) (81) (59)
------- ------- ------- -------
Cash generated from operations 330 241 620 624
Interest paid (40) (13) (51) (22)
Income taxes paid 94 (113) (110) (196)
------- ------- ------- -------
Net cash from operating activities 384 115 459 406
Acquisition of group companies (net of
cash) (13) 0 (14) (9)
Disposals of group companies and jv's 0 0 0 0
Investment in associates (6) (4) (7) (4)
Disposals of associates 1 0 1 0
Capital expenditure on intangible
assets (22) (14) (36) (26)
Disposal of intangible assets 1 0 2 2
Capital expenditure on property, plant
& equipment (75) (64) (133) (126)
Proceeds from sale of property, plant
and equipment 4 12 15 31
Other changes in (financial) fixed
assets 9 (2) 23 0
Changes in minority interests 1 2 1 4
Interest received 25 6 30 10
Dividends received 0 0 0 0
------- ------- ------- -------
Net cash used in investing activities (75) (64) (118) (118)
Repurchase of shares 0 0 (259) 0
Other equity changes (13) 3 (12) 5
Proceeds from long-term borrowings 19 9 23 15
Repayments to long-term borrowings (16) (4) (25) (16)
Proceeds from short-term borrowings (7) 10 59 8
Repayments to short-term borrowings (55) (12) (89) (44)
Proceeds from finance lease 2 2 3 1
Repayments to finance lease (4) (5) (7) (9)
Dividends paid (168) (142) (168) (142)
------- ------- ------- -------
Net cash used in financing activities (242) (139) (475) (182)
======= ======= ======= =======
Changes in cash 67 (88) (134) 106
Cash at beginning of the period 437 668 633 470
Exchange rate differences 7 0 12 4
Changes in cash 67 (88) (134) 106
Cash at end of period 511 580 511 580
======= ======= ======= =======
Consolidated balance sheet
01 Jul 01 Jan
2005 2005
EUR m EUR m
Goodwill 2,481 2,425
Other intangible assets 221 218
Intangibles 2,702 2,643
Land and buildings 976 960
Plant and equipment 457 464
Other property, plant and equipment 440 453
Construction in progress 42 47
Property, plant and equipment 1,915 1,924
Investments 84 82
Loans receivable from associates 2 2
Other loans receivable 23 21
Deferred tax assets 214 253
Prepayments and accrued income 123 142
Financial fixed assets 446 500
Fixed assets 5,063 5,067
Inventory 54 46
Accounts receivable 2,166 2,089
Prepayments and accrued income 422 393
Cash and cash equivalents 511 679
Current assets 3,153 3,207
Non-current assets held for sale 12 0
======= =======
Total assets 8,228 8,274
Shareholders' equity 3,330 3,066
Minority interests 20 19
Group equity 3,350 3,085
Deferred tax liabilities 263 236
Provisions for pension liabilities 143 198
Other provisions 160 126
Long-term debt 1,314 1,435
Accrued liabilities 203 221
Non-current liabilities 2,083 2,216
Trade payables 616 670
Provisions (current) 43 49
Other current liabilities 864 950
Accrued current liabilities 1,272 1,304
Current liabilities 2,795 2,973
======= =======
Total liabilities and group equity 8,228 8,274
======= =======
Additional Information
Capital expenditure on property, plant and equipment and other intangible assets
Q2 2005 Q2 2004 HY 2005 HY 2004
EUR m EUR m EUR m EUR m
Mail 25 22 43 44
Express 45 32 80 65
Logistics 22 20 40 39
Corporate 5 4 6 4
Total 97 78 169 152
Movement in shareholders' equity
Q2 2005 Q2 2004 HY 2005 HY 2004
EUR m EUR m EUR m EUR m
Opening balance 3,272 3,185 3,066 2,981
Profit / (Loss) attributable to
the shareholders 210 210 403 396
Foreign exchange effects 21 4 39 20
Other reserves (5) 3 (10) 5
Cash dividend (168) (139) (168) (139)
Closing balance 3,330 3,263 3,330 3,263
Net debt
01 Jul 01 Jan
2005 2005
EUR m EUR m
Short-term debt 225 97
Long-term debt 1,314 1,435
Total interest bearing debt 1,539 1,532
Cash and cash equivalents (511) (679)
Net debt 1,028 853
With respect to the basis of preparation of the interim financial information
presented in this press release, reference is made to our announcement of April
27, 2005 on the presentation of financial information for FY 2004 under
International Financial reporting Standards.
US GAAP Statement
Profit attributable to the shareholders
HY 2005 HY 2004
EUR m EUR m
Profit attributable to the shareholders under IFRS 403 396
Adjustments for:
Other employment benefits (23) 22
Employment schemes and group reorganisation (6)
Other intangible assets amortisation (2) (2)
Financial instruments (3)
Stock based compensation (1) 3
Real estate sale (2)
Amortisation on restoration of previously recognised
impairments 2 2
Tax effect of adjustments 6 (2)
Profit attributable to the shareholders under US GAAP 385 408
Profit per ordinary share and per ADS under US GAAP(*) 84.5 85.9
(in eurocents)
(*) Based on an average number of 454.7 million ordinary shares, including ADS
(2004: 475.2 million).
Shareholders' equity
01 Jul 25 Jun
2005 2004
EUR m EUR m
Shareholders' equity under IFRS 3,330 3,263
Adjustments for:
Other employment benefits 13 5
Minimum pension liability (455)
Employment schemes and group reorganisation 135
Goodwill and other long-lived intangible assets 98 82
Other intangible assets amortisation (26) (7)
Real estate sale (22)
Sale-lease-back transaction (5) (7)
Restoration of previously recognised impairments, net
of amortisation 5 (5)
Long term contract incentive payment (4) (5)
Pension curtailment 2 2
Provisions 2 1
Other (1)
Deferred taxes on adjustments 50 2
Shareholders' equity under US GAAP 3,009 3,444
Financial Calendar 2005
Monday 1 August, 2005 Ex-interim dividend date
Monday 8 August, 2005 Payment interim dividend
Monday 31 October, 2005 Publication of 2005 third quarter results
Monday 27 February, 2006 Publication of 2005 fourth quarter and full
year results
Forward-looking statements warning-Safe Harbour Statement under the US Private
Securities Litigation Reform Act of 1995
Except for historical statements and discussions, statements contained in this
press release are "forward-looking statements" within the meaning of Section 27A
of the US Securities Act of 1933 and Section 21E of the US Securities Exchange
Act of 1934. Forward-looking statements generally can be identified by the use
of terms such as "ambition", "may", "will", "expect", "intend", "anticipate",
"believe", "plan", "seek", "estimate", "continue" or similar terms. By their
nature, forward-looking statements involve risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future.
These forward-looking statements are based on current expectations, estimates,
forecasts, projections about the industries in which we operate, management's
beliefs and assumptions made by management about future events. These
forward-looking statements involve known and unknown risks, uncertainties and
other factors, many of which are outside of our control, that may cause actual
results to differ materially from any future results expressed or implied in the
forward-looking statements. All material risks currently known to us have been
discussed in our most recent Annual Report on Form 20-F filed with the US
Securities and Exchange Commission.
Important factors that may cause such differences include, but are not limited
to:
· substitution of alternative methods for delivering information for our Mail
and Express services,
· regulatory developments and changes, including with respect to the levels of
tariffs, the scope of mandatory and reserved services, quality standard,
liberalisation in the Dutch and European postal markets and the outcome of
pending regulatory proceedings,
· competition in the mail, express and logistics businesses,
· decisions of competition authorities regarding proposed joint ventures or
acquisitions,
· costs of complying with governmental regulations,
· general economic conditions, government and regulatory policies and business
conditions in the markets served by us, including adverse effects of terrorist
attacks, use of our delivery capabilities by criminals, anthrax incidents, war
or the outbreak of hostilities or epidemic diseases,
· our ability to achieve cost savings and realise productivity improvements and
the success of investments, joint ventures and alliances,
· changes in currency and interest rates,
· changes in our credit rating and their impact on our financing costs and
requirements,
· changes in our relationship with the State of the Netherlands,
· disruptions at key sites,
· incidents resulting from the transport of hazardous materials,
· mismatches between our investment in infrastructure (aircraft, depots and
trucks) and our actual capacity needs,
· strikes, work stoppages and work slowdowns and increases in employee costs,
· costs of completing acquisitions or divestitures and integrating newly
acquired businesses,
· changes to the international conventions regarding the limitation of liability
for the carriage of goods,
· if our subcontractors' employees were to be considered our employees,
· decisions of tax and other authorities with respect to our tax liabilities and
the results of our investigations into our tax affairs,
· changes in accounting rules causing different valuation of assets and
liabilities, and
· higher costs related to implementation of regulations such as the
Sarbanes-Oxley Act.
These factors and other factors that could affect these forward-looking
statements are described in our annual report on Form 20-F and our other reports
filed with the US Securities and Exchange Commission. As a result of these and
other factors, no assurance can be given as to our future results and
achievements. You are cautioned not to put undue reliance on these
forward-looking statements, which are neither predictions nor guarantees of
future events or circumstances. We disclaim any obligation to publicly update or
revise these forward-looking statements, whether to reflect new information,
future events or circumstances or otherwise. All subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf
are similarly qualified.
CONTACT:
Mike Richardson
Director Investor Relations
Phone +31 20 500 62 41
Fax +31 20 500 75 15
Email mike.richardson@tnt.com
or
David van Hoytema
Manager Investor Relations
Phone +31 20 500 65 97
Fax +31 20 500 75 15
Email david.van.hoytema@tnt.com
or
Daphne Andriesse
Senior Press Officer Media Relations
Phone +31 20 500 62 24
Fax +31 20 500 75 20
Email daphne.andriesse@tnt.com
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