Message from Håkan Ericsson, President and CEO

The market is characterized by continued decline in the mail business, especially in Denmark, while e-commerce is showing strong growth. The restructuring program to phase out just under 800 administrative positions has now been concluded.

During the quarter, we signed several substantial service logistics contracts for home delivery of food groceries, laundry and other consumer items, and we also signed new parcel delivery contracts. The e-commerce segment continues to show rapid growth and B2C parcel volumes rose 21% year-on-year. In the wake of continued digitalization, mail volumes continued to decline, especially in Denmark. In total, mail volumes declined year on year by 7% in the first quarter, 15% in Denmark and 5% in Sweden.

Group operating income totaled SEK 312m (106) in the first quarter. The restructuring programs completed are yielding results, but with mail volumes continuing to decline, continuous efficiency improvements in both production and administration are essential. As part of our capital efficiency program, we have entered into an agreement to divest a property in central Copenhagen for a price of DKK 925m. The agreement will come into force at the end of the second quarter. The office will relocate to leased premises near Copenhagen.

Late April saw the verdict of the European Court of Justice on the case brought by the European Commission against the Swedish State for non-implementation of EU rules regarding value added tax on postal services. The verdict went in the Commission’s favor, with the result that postal services not covered by individually negotiated agreements are to be VAT-exempted. PostNord awaits changes in Swedish legislation on VAT.

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Source: PostNord