Annual Report 2014

Itella Logistics

Itella Logistics’ net sales declined by 8.7% to EUR 586.2 (641.8) million. The decline was due to the challenging market situation and the intense competition. Net sales decreased particularly strongly in Scandinavia but also in domestic freight services.

Itella Logistics’ operating result before non-recurring items improved slightly but still showed a loss, amounting to EUR -22.6 (-24.5) million, despite significant efficiency improvement measures taken. The improvement in the result was supported by the improved profitability of warehousing operations and efficiency improvement measures in transport production and subcontracting in Finland. In the Baltic countries, business developed favorably and the result was positive. The result was weighed down especially by the unprofitability of business in Scandinavia.

With regard to the logistics service offering, the company will focus on road transport between our countries of operation in Scandinavia and develop the road transport service offering in selected market areas in Europe. In late 2014, the company gave up air and sea freight in Scandinavia as well as service warehouses in Denmark and outsourced the distribution logistics within Scandinavia. Service warehouses in Sweden and Norway will be given up in 2015. Due to the changes, EUR 9.7 million of non-recurring items were recorded in the company’s operating result for 2014.

The full-year operating result improved and was EUR -36.5 (-50.1) million, or -6.2% (-7.8%) of net sales.

Itella Logistics’ investments amounted to EUR 12.6 (11.8) million. The majority of the investments were related to terminal improvement projects and the transport fleet.