Unless otherwise indicated, figures in parentheses refer to the corresponding period of the previous year.
- Net sales increased by 5.0% to €411.3 (391.6) million.
- Adjusted EBITDA decreased to €39.5 (44.2) million, or 9.6% (11.3%) of net sales.
- EBITDA decreased to €38.9 (43.8) million, or 9.5% (11.2%) of net sales.
- Adjusted operating income decreased to EUR 8.5 (13.7) million, representing 2.1% (3.5%) of net sales.
- Operating profit decreased to EUR 7.9 (13.3) million, representing 1.9% (3.4%) of net sales.
- Net sales increased by 3.4% to 802.4 (775.9) million euros.
- Adjusted EBITDA decreased to €76.0 (88.7) million, or 9.5% (11.4%) of net sales.
- EBITDA decreased to €73.3 (88.4) million, or 9.1% (11.4%) of net sales.
- Adjusted operating income decreased to EUR 15.0 (28.5) million, representing 1.9% (3.7%) of net sales.
- The operating result decreased to EUR 12.3 (28.2) million, representing 1.5% (3.6%) of net sales.
- Net debt to adjusted EBITDA was 1.4x (1.2x).
- Slowing economic growth, accelerating inflation and operational challenges had a negative impact on the profitability of postal services, which affected the overall profitability of the Posti Group.
- The successful acquisitions of the early morning delivery businesses of Veddetagruppen and Mediatalo Keskisuomalainen Oyj increased the Group’s net sales.
- Fulfillment and Logistics Services net sales increased by 15.4% and were mainly driven by the acquisition of Veddetagruppen.
- Total parcel volume in Finland and the Baltics decreased by 3% (up 16%) due to changing consumer behavior and slowing economic growth.
- The combined external net sales of e-commerce and delivery services and fulfillment and logistics services accounted for 63.2% (61.6%) of Group net sales.
- The volume of addressed letters continued to decline and decreased by 6% (9%).
- The share of items covered by the universal service obligation represents 2.3% (2.7%) of all postal items distributed.
Outlook for 2022
Posti adjusts its outlook for 2022. Net sales are expected to increase (previously it was announced that net sales should remain at the same level). The new perspective says:
In 2022, Posti expects its net sales to increase compared to the previous year. The Group’s adjusted EBITDA in 2022 is expected to decrease. Posti’s net revenue from continuing operations in 2021 was €1,595.0 million and adjusted EBITDA was €181.6 million.
Potentially persistent inflation and rising interest rates could affect consumer demand. Changes in consumer behavior affect Posti’s business and could impact actual results.
The Group’s business is characterized by seasonality. Net sales and operating income of the segments do not accumulate evenly over the year. In consumer parcels and postal services, the first and fourth quarters are generally strong, while the second and third quarters are weaker. The decline in the volume of postal services is expected to continue.
Changes in reports
On January 1, 2022, Posti changed its segment reporting to align with corporate strategy, organizational structure and to improve visibility on performance and results. Posti now has three reportable segments: e-commerce and delivery services, fulfillment and logistics services, and postal services. The 2021 comparison period has been restated accordingly.
E-commerce and delivery services offers parcel, transport and e-commerce services to companies and individuals in Finland, Sweden and the Baltic countries. eCommerce and Delivery Services is also developing Posti’s digital services for a better customer experience.
Fulfillment and logistics services consists of two operating segments: Transval and Aditro Logistics. Transval is the market leader in logistics outsourcing solutions in Finland. Aditro Logistics is one of the leading logistics companies in Sweden and the Nordic countries.
Postal services offers mail delivery services as well as digital and multi-channel solutions.
Turkka Kuusisto, President and CEO, said: “Our growth continued in the first half of 2022 through successful execution of our strategy as well as actions taken to support growth in a volatile market environment. Group net sales increased by 3.4% to 802.4 (775.9) million and were driven by higher net sales of e-commerce and delivery services and fulfillment and logistics. In the second quarter, the Group’s net sales increased by 5.0% to 411.3 (391.6) million euros despite lower volumes. The growth was primarily driven by successful acquisitions, price increases and higher volumes in warehousing in fulfillment and logistics services.
Rising inflation continues to be a concern for our operating environment. As expected, our adjusted EBITDA decreased to €76.0 (88.7) million in the first half and to €39.5 (44.2) million in the second quarter. The declining profitability of postal services has led to various challenges in the delivery processes of postal services, which negatively impacted our overall profitability.
During the first half of the year, consumer behavior changed, leading to lower parcel volumes in e-commerce and delivery services. Despite this, the profitability of e-commerce and delivery services has increased. This is mainly explained by the increase in net sales of transportation services. Net sales and profitability of fulfillment and logistics services increased, thanks to the acquisition of Veddestagruppen. Additionally, Transval’s new warehouse in Sipoo opened in April, which has expanded our warehousing capacity. Rising operational costs had a negative impact on the profitability of postal services, and addressed mail volumes also continued to decline. Looking to the second half of 2022, we expect the volatility of the market environment and cost pressure to continue.
In May, Posti’s science-based net zero goal was endorsed by the Science Based Targets Initiative (SBTi), a global body enabling companies to set ambitious emission reduction targets in line with the latest scientific knowledge on the climate. We are proud to have achieved this as the first Finnish company and as the first company in our industry worldwide. In addition to emissions caused by its own operations, Posti is committed to reducing value chain emissions to net zero by 2040.
As the postal turmoil continues in the coming years and mail volumes continue to decline, it is essential to renew the current postal law in a more flexible direction and to introduce fixed-term state aid for distribution of newspapers in rural areas. We support most of the government’s proposal, which was submitted to Parliament in April 2022. However, the new public service obligation, aimed separately at Posti apart from the competition, to deliver newspapers at a regulated price would very problematic, especially if the compensation paid does not cover costs and a reasonable profit. We emphasize that the obligation must cover costs and a reasonable profit as provided for in the universal service obligation.
I am pleased that our growth strategy has proven to be on the right track. As we have now entered the second half of 2022, we have started preparations for the high season at the end of the year to ensure that we provide a successful season period for our customers. We will also continue to focus on improving the customer experience, which is central to everything we do.