Annual Report 2014

Board of Directors' report


Operating environment 2014

The overall economic situation remained weak in Finland, which was reflected as lower mail and freight volumes. The market situation in logistics and retail is still weak. Transport volumes in heavy traffic have continued to decrease in Finland for nearly three consecutive years. GDP growth in Russia ceased as of the second quarter of 2014. By December 31, 2014, the closing rate of the Russian ruble had declined by 59.6% year-on-year. Furthermore, there was intense competition in Scandinavia. The situation was reflected in Posti Group’s results as a decrease in both net sales and operating result.

The volumes of addressed letter items declined by -10% (-6%) year-on-year. Newspaper and magazine volumes also continued to decrease substantially. The delivery volumes decreased from the previous year by -13% (-6%) for newspapers and by -10% (-7%) for magazines.

The growth in parcel services slowed down to 2% from the 4% rate recorded a year earlier. Nevertheless, the parcel market picked up before Christmas. During the year, Posti delivered a total of 32.6 million parcels, which is the highest ever number of parcels delivered by Posti. The overall demand for parcels in Finland increased by approximately 3%, driven by B-to-C e-commerce.

In OpusCapita, the strong growth of cloud services continued. In addition to cloud services, digitization continues to increase, which creates a firm foundation for the actual business benefits that can be gained in financial management through automation. It is also forecast that BPaaS (Business Process as a Service) and SaaS (Software as a Service) product sales services offered by OpusCapita will grow much more strongly than traditional software license.

The postal delivery licenses that have been issued allow for competition in addressed deliveries, but competition has not yet had an impact on the Group’s result. The Finnish Government issued a postal delivery license to three of Posti’s competitors. In Posti’s view, issuing the postal licenses with one-day delivery obligation reduces Posti’s opportunities to profitably provide services that fall under the universal service obligation in accordance with the Finnish Postal Act. For this reason, the decision increases the need for efficiency measures.