Annual Report 2014

Itella Mail Communications

The net sales of the Itella Mail Communications business group decreased by 1.9% to EUR 1,133.0 (1,155.5) million. The decrease of the delivery product volume continued, but thanks to the price increases taking effect at the beginning of the year, net sales declined only moderately.

Operations under the universal service obligation amounted to EUR 147.1 (150.2) million, or 13.0% (12.9%) of Mail Communications’ net sales and 7.9% (7.6%) of the entire Group’s net sales.

The operating result before non-recurring items amounted to EUR 67.4 (66.6) million. Non-recurring items related to personnel restructuring recognized during the period totaled EUR 16.1 (2.6) million.

The operating result decreased to EUR 51.2 (64.0) million, or 4.5% (5.5%) of net sales. The operating result declined due to non-recurring items related to personnel restructuring. With the restructuring, operations are adjusted to the prevailing situation in which postal item volumes are declining substantially.

In 2014, mail delivery volumes developed as follows (compared to 2013):

  • Newspapers, -13% (-6%)
  • Magazines, -10% (-7%)
  • Addressed letters, -10% (-6%)
  • Unaddressed direct marketing, -33% (+11%)
  • Parcel services, +2% (+4%)
  • Electronic letters, +7% (+11%)

During the year, Posti delivered a total of 32.6 million parcels, which is the highest ever number of parcels delivered by Posti. The use of Posti’s parcel points increased during the year, with the number of parcels growing by 52% from the previous year. The growth in Posti’s parcel services slowed down to 2% from the 4% rate recorded a year earlier; however, demand picked up before Christmas. The overall demand for parcels in Finland increased by approximately 3%, driven by B-to-C e-commerce.

Posti had 1,448 service points at the end of the year. Posti brought 152 parcel points into use during the year, bringing their total number to 459. The goal is to increase the number of the various service points to 1,700 by 2020.

The number of the users of Netposti, Posti’s electronic mailbox, reached 587,000 at the end of 2014, increasing by 10% from 2013.

Posti has held negotiations with newspaper publishers regarding the renewal of delivery agreements for the early-morning delivery of newspapers, as early-morning delivery has not been profitable under the current implementation and pricing, and with the current development of circulation volumes. During the year, the negotiations resulted in the termination of seven early-morning delivery agreements. During the third quarter, one new cooperation contract and two extension contracts were signed. With some customers, an agreement was reached on additional months. In the case of two newspaper publishers, delivery was transferred to a partner by a business transfer agreement.

On September 1, 2014, Posti sold its Mediabank business to Multiprint Oy. In the business transaction, the personnel employed in the Mediabank business, its accounts and the Mediabank information system were merged with Multiprint.

The business group invested EUR 24.4 (30.3) million in vehicles, production projects and parcel points in 2014.