Interim Results
27 Oktober 2000 - 9:34AM
UK Regulatory
RNS Number:0335T
TNT Post Groep NV
25 October 2000
TPG ANNOUNCES RECORD RESULTS FOR FIRST HALF OF 2000
STRONG VALUE ENHANCING STRATEGIES UNVEILED
* Net income growth of 25.1% in first half of 2000
* Earnings per share growth of 26.3%
* Outlook for full year 2000 significantly upgraded
* Large US acquisition expands Logistics global reach
* New e-business strategy supports transformation of Mail, Express and
Logistics
* Value and growth acceleration boosted by a value based management approach
TPG has announced a net income growth of 25.1% in the first half of 2000
compared with the same period last year. Excluding the profit on the sale of
non-core business, the net income growth is 16.9%. The growth performance in the
first half exceeds the previous outlook for the full year 2000 given by TPG
(12.6%).
Operating revenues increased by 19.5% compared to the same period last year.
EBIT increased by EUR 60 million (18.2%).
1st Half 2000 1st Half 1999 % Change
(EURO M)
Revenues 4,687 3,923 19.5
Earnings from operations 518 463 11.9
EBIT 389 329 18.2
Net income 229 183 25.1
Earnings per share (EURO) 0.48 0.38 26.3
Interim Dividend (NLG)* 0.30 0.30
* The election period starts on 5 September 2000. The dividend is payable as of
2 October 2000.
Outlook 2000
On the basis of the excellent first half performance, the Board of Management
has significantly upgraded its outlook for net income growth for the full year
2000. Excluding exchange rate movements, TPG expects to achieve underlying net
income growth for the full year 2000 in line with the first half which,
excluding the profit on the sale of non-core business, was 16.9%.
Excellent first half year
"All businesses performed strongly in the first half of 2000" the Chairman and
CEO of TPG, Ad Scheepbouwer, commented. "Mail continues to maintain its
operating margins and has now restored a 95% weighted average next day delivery
performance. Express has continued its strong improvement trend based on the
principle of being the fastest and most reliable provider of Express delivery
services with earnings from operations up 68% compared to last year. Logistics
has grown significantly, fuelled by acquisition activity to support the aim of
market leadership in its target sectors. A clear feature of the excellent half
year performance is that we are delivering on the promises we have made to our
shareholders."
VALUE ENHANCING BUSINESS STRATEGIES
TPG management has also today unveiled a new 5 year strategy. The cornerstone of
the strategy is a value based management approach which is currently being
implemented throughout the company. TPG's overall strategy consists of two main
planks: strong business strategies in Mail, Express and Logistics and a
comprehensive e-business strategy.
"Accelerating the creation of value in TPG is the objective of this bold new
strategic approach", declared Ad Scheepbouwer. "The combination of aggressive
business strategies and exciting e-business developments, driven by our managing
for value culture, puts TPG on track to deliver significant enhancements in
shareholder value. Through continued new business developments and value
creating acquisitions, we are targetting to make TPG one of the leading business
service companies in our peer group."
Key features of the strategy are:
* Profitable expansion of European coverage in Mail
* Development of hybrid and electronic services in Mail
* Focus on service and margin improvements in Express
* Aim for global leadership in Logistics through targetted acquisitions
* Acceleration of e-business initiatives
Mail
A revenue growth range of 6-8% is targetted through rapid international
expansion in the wake of the anticipated liberalisation in European mail and
through a focus on value added services.
The international expansion in Germany is on track. By the end of this year a
coverage of around 45% of households will have been reached, related to
unaddressed networks. The first tests with addressed mailshots will start at the
end of September 2000. In Belgium our first addressed services nation-wide have
been successfully launched. In Italy our position in addressed networks has been
expanded via acquisitions in Padua and Florence.
Express
Express will continue to deliver on its strategy to be the fastest and most
reliable express company with a strong focus on customer satisfaction. The
launch this week of a unique new Europe-wide round the clock on demand TNT
Sameday service also consolidates our position as the fastest and most reliable
European express delivery service provider. Operating margins are targetted to
increase to 6% in 2001 with further improvements targetted in subsequent years.
Express is investigating the set up of a Domestic Express network in China with
depots and hubs planned in over 95 cities. The aim of this ambitious move is to
establish TNT as "The Express Company" in China.
Logistics
Logistics aims to triple its 1999 revenues in the next three years primarily
through acquisitions whilst maintaining its operating margins. The objective is
to build critical mass in key territories and to focus on profitable market
sectors. A key part of this is realised today with the announcement of TPG's
acquisition of CTI Logistx, a US based company (see separate press release),
which builds on the three acquisitions already made this year (Mendy Group,
Schrader Group and Barlatier S.A.) and the joint venture with the Koc group in
Turkey.
E-business
TPG has announced the creation of a new Venture Group as the driving force
behind its new e-business strategy.
A TPG Venture Group will be set up to provide the funding and support to enable
the business divisions to develop e-revenue initiatives either from new
opportunities or from traditional business. This will include availability of
investment funds of up to EURO 100 Million over the next few years.
This approach will enable TPG to build on the new e-revenue streams it has
already launched, which include TNT Loop, WebCollect and I-Connections. TNT Loop
has already entered into 8 pilot agreements with customers in the mobile
telecommunications, automotive and consumer goods sectors and is on track for a
full commercial launch in the fourth quarter.
In addition, the Mail business will start new E.D.P. (Electronic Document
Presentment) and E.B.P.P. (Electronic Bill Presentment and Payment) services as
a logical next step for extending its existing hybrid services.
Longer term outlook
The Board of Management has set internal targets to increase the net income
growth for the next few years from the previous range of 10 - 15% to a range of
12 - 18% (excluding exchange rate movements and acquisitions and assuming a
stable economic environment)
TPG, with its two brands TNT and royal PTT Post, is a global provider of mail,
express and logistics services. It employs more than 116,000 people in 64
countries and serves over 200 countries. The company reported sales of EURO 8.5
billion in 1999 which have grown by 19.5% in the first half of 2000. TPG is
publicly listed on the stock exchanges of Amsterdam, New York, London and
Frankfurt.
Note to the editor (not for publication)
For further information, please contact:
TPG
Debbie de Wagenaar
Director Press Office & Public Relations
Tel: No. +31 20 5006171 or +31 6 53418625
debbie.de.wagenaar@tntpost.com
BUSINESS DEVELOPMENTS IN THE FIRST HALF OF 2000
MAIL
Revenues in the Mail division increased by 3.4% in the first half of 2000. Two
working days more compared to the first half of 1999 have had an estimated
positive effect of 1%.
The total revenue for the Mail division is summarised as follows:
Mail 1st Half 1st Half % Org Acq Fx
2000 1999
Total Revenue 1,838 1,778 3.4 2.6% 0.2% 0.6%
The growth of 3.4% is a result of underlying organic business growth of 2.6%, a
net impact from acquisitions and disposals of 0.2% and a positive impact from
foreign currency effects of 0.6%.
For further details please refer to the separate business lines below
Domestic Mail
Domestic Mail includes collection, sorting, transport and distribution services
for domestic mail, both in the Netherlands and within country borders abroad.
Domestic Mail 1st Half 1st Half % Org Acq Fx
2000 1999
Revenue 830 833 (0.4) (1.1) 0.7% 0%
In euro million
Underlying organic business growth in Domestic Mail was affected by a slight
decline in volume compared to the same period last year, mainly as a result of a
reduction in the frequency of bank statement mailings. Acquisitions (Padua and
Florence in Italy) contributed 0.7% growth.
From 1 June 2000 the new Postal Act in the Netherlands reduced the scope of both
the mandatory and the reserved postal services.
Direct Mail
Direct Mail comprises all activities involving distribution of addressed mail
and magazines, newspapers and periodicals and unaddressed advertising mail and
newspapers within country borders. It also includes direct marketing initiatives
and a number of database management and value-added direct marketing services.
Direct Mail 1st Half 1st Half % Org Acq Fx
2000 1999
Revenue 547 520 5.2 4.4% 0.8% 0%
In euro million
Underlying organic business growth in Direct Mail was 4.4% mainly due to the
good volume growth of printed matters and unaddressed mail in the Netherlands.
The acquisition of GFW Austria in 1999 contributed 0.8% to growth in the
business.
International Mail
TPG operates its International Mail business around the world, providing
services for collection, sorting and distribution of international mail, parcels
and valuables across national borders.
International Mail 1st Half 1st Half % Org Acq Fx
2000 1999
Revenue 328 317 3.5 (0.9)% 0.9% 3.5%
In euro million
International Mail operating revenues increased by 3.5%, despite business
pressures in North America, mainly due to a positive impact from foreign
exchange movements.
The new cross border global mail joint venture signed between TPG, Royal Mail
and Singapore Post will contribute positively to the full year results.
Post Offices and Others
Post Offices & Others 1st Half 1st Half % Org Acq Fx
2000 1999
Revenue 133 108 23.1 32.4% (9.3)% 0%
In euro million
Revenues from the joint ventures Post Offices and Geldnet increased by 2.2%. The
remaining growth arose from other items including profit on sale of fixed
assets. The sale of Corporate Fashion Services decreased revenues by 9.3%.
Mail: Earnings from Operations
The Mail division's earnings from operations increased by 4.3% or EURO 16
million to EURO 389 million. The overall operating margin remained stable at
21%. Next day delivery weighted average quality of on time delivery performance
in June 2000 reached 95% and is on line to reach the target for December 2000 of
95.5%.
EXPRESS
Express revenues increased by 26.6% in the first half of 2000.
Total revenues in Express are summarised as follows:
Express 1st Half 1st Half % Org Acq Fx
2000 1999
Total Revenue 2,003 1,582 26.6 11.9% 10.0% 4.7%
In euro million
Underlying organic business growth was 11.9%. Acquisitions contributed a further
10.0%. There was an overall positive impact from foreign exchange movements of
4.7% mainly due to the weaker euro during the period.
For further details please refer to the separate business lines below.
Express Europe
Express Europe 1st Half 1st Half % Org Acq Fx
2000 1999
Revenue 1,594 1,284 24.1 12.9% 8.2% 3.0%
In euro million
Express Europe's underlying organic business growth was 12.9%. The 1999 first
half year acquisitions, (Jet Services and NVS) accounted for 8.2% growth.
Foreign exchange effects provided a positive 3.0% growth. Significant revenue
growth was achieved in Scandinavia, Eastern Europe and Turkey. Underlying
business growth of more than 12% was achieved in the UK, France, Germany and
Italy.
Express International
Express International 1st Half 1st Half % Org Acq Fx
2000 1999
Total Revenue 409 298 37.2 7.1% 17.9% 12.2%
In euro million
Outside Europe, underlying organic business growth was 7.1%. The acquisition of
Ansett Air Freight in the second half of 1999 contributed a growth of 17.9% and
foreign exchange effects added a further 12.2%.
Express: Earnings from Operations
Express earnings from operations increased by 68% or EURO 34 million to EURO 84
million continuing the strong performance improvement trend experienced in the
second half of 1999. The operating margin in the first half of 2000 was 4.2%
compared to 3.2% of sales in the first half of 1999.
LOGISTICS
Revenues in the Logistics division increased by 39.6% in the first half of 2000.
Total revenue in Logistics is summarised as follows:
Logistics 1st Half 1st Half % Org Acq Fx
2000 1999
Total Revenue 903 647 39.6 9.1% 24.6% 5.9%
In euro million
A significant contribution to the increase in revenue is from the full period
impact of the 1999 acquisition of Tecnologistica and the acquisitions of Mendy
and Convoi in the first half of 2000. Organic growth was 9.1%. There was a
positive impact from foreign exchange movements of 5.9%.
Logistics: Earnings from Operations
The earnings from operations of the Logistics division increased by 12.5% or EUR
5 million to EUR 45 million.
The operating margin of 5.0% (compared to 6.2% in the first half of 1999) was
impacted by the fact that Tecnologistica (acquired in June 1999) is still
diluting the overall profitability of the division as a result of price pressure
in some sectors, particularly the automotive industry. Nevertheless the
underlying margin improvements of Tecnologistica are on track to realise the
improvements set out at the time of acquisition.
ADDITIONAL INFORMATION
Employees
In the first half of 2000 the average number of full time employees increased
from 89,641 to 91,155. The increase in full time employees is mainly
attributable to acquisitions of businesses made in 1999 and 2000.
Dividend Policy
TPG intends to pay a stable dividend of NLG 0.80 per ordinary share. In line
with the investment and expansion strategy of the business, the intended stable
dividend of NLG 0.80 per ordinary share is expected to result in a pay-out ratio
of 30 to 35%. This dividend policy will be pursued subject to the financial
results of TPG and is subject to annual review.
Board of Management
Mr Harry Koorstra was appointed to the Board of Management on 1st July 2000 as
Group Managing Director of Mail following the retirement of Mr Bert van Doorn.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995
Certain information contained in this press release is forward looking. 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. In
addition, to the assumptions specifically mentioned in the above paragraphs,
there are a number of other factors that could cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements. These factors include, but are not limited to, the
actual effects of recent and future levels of spending in major economies, level
of marketing and promotional expenditure, actions of competitors and joint
venture partners, employee costs, future exchange and interest rates, changes in
tax rates, uncertainties associated with future business combinations or
dispositions. Continuing investments in infrastructure (airplanes, depots and
trucks) is important to maintain and increase market share. Infrastructure
investment requires substantial lead time and involves significant fixed costs.
Any mismatch between investments in infrastructure and actual market growth (or
increase in TPG's market share) could result in costly excess capacity (if
investment is too great) or losses of market share (if investment is
insufficient).
Consolidated statements of income
Half year-end 30 June
2000 1999
EURO million EURO million
Net sales 4,628 3,889
Other operating revenues 59 34
Total operating revenues 4,687 3,923
Salaries and social security contributions 1,612 1,462
Depreciation, amortisation and impairments 149 102
Other operating expenses 2,537 2,030
Total operating expenses 4,298 3,594
Earnings before Interest and Tax 389 329
Financial income and expenses (32) (23)
Income Before Income Taxes 357 306
Income taxes (126) (121)
Results from investments in affiliated companies (1) (1)
Minority Interests (1) (1)
Net income 229 183
Effective tax rate 35.3% 39.4%
Basic net income per ordinary shares and per
ADS 1 (in EURO) 0.48 0.38
Diluted net income per ordinary share and
per ADS 2 (in EURO) 0.48 0.38
1) Basic net income per ordinary share and per ADS based on an average number
of 477,292,563 shares in the first half 2000
2) Diluted net income per ordinary share and per ADS based on an average number
of 477,462,903 shares in the first half 2000
Consolidated cash flow statements
After proposed appropriation of net income
Half year-end 30 June
2000 1999
EURO million EURO million
Net income 229 183
Depreciation, amortization and impairments 149 103
Changes in provisions (43) (3)
Changes in deferred taxes 3 1
----- -----
338 284
Inventory (2) (9)
Accounts receivable (58) (100)
Other current assets (28) (39)
Current liabilities (excluding short-term
financing) (2) 72
Changes in working capital (90) (76)
Net cash provided by operating activities 248 208
Acquisition of group companies (44) (392)
Acquisition of affiliated companies 0 (2)
Disposal of affiliated companies 124 (20)
Capital Expenditure on property, plant and
equipment (160) (156)
Disposals of property, plant and equipment 9 17
Changes in other financial fixed assets 33 (9)
Changes in minority interests (2) 4
Net cash used in investing activities (40) (558)
Dividend (83) (78)
Changes in shareholders' equity (71) (65)
Long-term liabilities acquired 74 131
Changes in short-term financing (113) 138
Net cash used by financing activities (193) 126
Changes in cash and cash equivalents 15 (224)
Cash and cash equivalents at beginning of period 274 404
Exchange rate differences on cash items 5 7
Cash and cash equivalents from acquisition and
disposal of group companies 11 25
Changes in cash and cash equivalents 15 (224)
Cash and cash equivalents at end period 305 212
Consolidated balance sheets
After proposed appropriation of net income
At 30 June At 31 December
2000 1999
EURO million EURO million
Assets
Fixed assets
Intangible assets 1,927 1,974
Property Plant and equipment 1,767 1,719
Financial fixed assets 325 425
------ ------
4,019 4,117
Current assets
Inventory 53 50
Accounts receivable 1,820 1,781
Cash and cash equivalents 305 274
------ ------
2,178 2,105
Total assets 6,197 6,222
Group equity
Shareholders' equity 2,289 2,166
Minority interests 8 10
------ ------
2,297 2,176
Provisions
Retirement schemes 400 397
Deferred tax liabilities 167 176
Other 587 657
------ ------
1,154 1,230
Liabilities
Interest bearing liabilities 705 735
Non Interest bearing liabilities 2,041 2,081
------ ------
2,746 2,816
Total liabilities and group equity 6,197 6,222
Capital Expenditure on property, plant and equipment
Half year-end 30 June
2000 1999
EURO million EURO million
Mail 48 59
Express 91 77
Logistics 21 20
---- ----
Total 160 156
US GAAP
Net Income
Half year-end 30 June
2000 1999
Net income under Dutch GAAP 229 183
Adjustments for:
Employment schemes and group reorganisation (37) (43)
Pension costs 57 (54)
Goodwill amortisation 1 1
Depreciation on restoration of previously
recognised impairments 2
Capitalised software 2
Depreciation of capitalised software (2)
Self-insurance (1) (1)
Non-core investments (106) 10
Tax effect of adjustments (8) 34
Net income under US GAAP 137 130
Basic net income under US GAAP per Ordinary
Share and per ADS in EURO (1) 0.29 0.27
Diluted net income under US GAAP per
Ordinary Share and per ADS in EURO (2) 0.29 0.27
1) Basic net income per ordinary share and per ADS based on an average number
of 477,292,563 shares in the first half 2000
2) Diluted net income per ordinary share and per ADS based an an average number
of 477,462,903 shares in the first half 2000
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