Cautious Improvement in Results in a Challenging Market

25 Oct 2024 08:30 CEST

In the third quarter, Posten Bring delivered total revenues of NOK 6,046
million, an increase of NOK 298 million compared to the third quarter of 2023.
Adjusted operating profit for the third quarter was NOK 344 million, an
improvement of NOK 72 million compared to the same period last year. Online
shopping parcels have increased by 7.1 per cent over the past 12 months compared
to last year, while addressed mail has fallen by 12.1 per cent over the same
period.

“Uncertainty in the market continues to affect our results. In the online
shopping market, we now see that the growth is flattening out, which is a
consequence of reduced growth in the import volumes. Overall, for the third
quarter, there was a cautious increase in activity levels compared to last year
driven by high activity in July. On the other hand, we experience a challenging
business market. Ongoing cost adjustments and measures have helped to limit cost
increases, despite continued high price growth,” says Petter-Børre Furberg, CEO
of Posten Bring.

Furberg further states that the Group is working on a profitability programme
that will reduce costs by NOK 1 billion by 2026, and that some of the effects
are beginning to show this quarter.

Operating profit (EBIT) in the third quarter was NOK 319 million, an increase of
NOK 145 million compared to the third quarter of 2023. The logistics market is
characterised by high competition and the positive result development, buit is
somewhat counteracted by a persistently weak activity level in the Norwegian and
Nordic economies. Continued high inflation, a weak currency, and increased
geopolitical risk mean that there is great uncertainty about the economic
developments ahead.

Import boosts parcel volumes
Turnover from the logistics business was NOK 14,708 million so far in 2024, an
increase of NOK 612 million compared to the same period last year.

So far this year, online shopping parcel volumes (B2C) have increased by 6.5 per
cent compared to the same period last year, partly due to increased volumes from
online shopping platforms in China. The Group's volume for business market
parcels has fallen by 3.4 per cent so far in 2024 compared to the same period
last year. Growth in the business market is closely linked to general economic
activity and has been characterised by weak growth and high inflation in both
Norway and Sweden.

Continued decline in postal volumes
Turnover for the postal segment amounts to NOK 4,144 million so far in 2024, an
increase of NOK 2 million compared to the same period last year. The volume of
addressed post continued to fall, with a decline of 12.1 per cent so far in 2024
compared to the same period last year. The volume of unaddressed post fell
correspondingly by 15.4 per cent. This was partly offset by a positive volume
growth for the Norgespakken by 17.7 per cent so far in 2024, which was mainly
driven by increased activity from second-hand platforms like Finn and Tise.

Adjusted operating profit for the postal segment was NOK 162 million so far in
2024, an increase of NOK 42 million compared to the same period last year. There
has been a good development in results for addressed mail during the period,
mainly due to good cost development combined with increased volume from
newspaper distribution.

In the third quarter, 91 per cent of addressed mail was delivered within three
days. This was well above the concession requirement of 85 per cent.

Sickness absence as a 12-month trend showed 7.2 per cent, which is 0.6
percentage points higher than the same time last year. The number of personal
injuries increased slightly. The injury frequency as a 12-month trend ended at
7.4, which is higher than the same time last year.

Key figures for 2024 up to Q3 (2023 in parentheses)
Operating revenues (MNOK): 18,309 (17,671)
Adjusted operating profit (MNOK): 546 (501)
Operating profit (EBIT) (MNOK): 579 (401)
Equity ratio: 31.2 (30.0)
Return on invested capital (ROIC) last 12 months: 6.1 (4.2)
Equity return (after tax) last 12 months: 5.3 (0.9)

Key figures for Q3 2024 (Q3 2023 in parentheses)
Operating revenues (MNOK): 6,046 (5,748)
Adjusted operating profit (MNOK): 344 (272)
Operating profit (EBIT) (MNOK): 319 (174)

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630394_Quarterly Report Q3 2024 - EN final.pdf