ITELLA CORPORATION STOCK EXCHANGE RELEASE APRIL 30, 2010, AT 12:00 A.M.
ITELLA INTERIM REPORT FOR JANUARY-MARCH 2010
- The Itella Group's net sales in the first quarter totalled EUR 453.9 million
(EUR 477.6 million in January-March 2009). International operations accounted
for 31% (30%). Itella Information recorded largely unchanged net sales while
Itella Logistics and Itella Mail Communication saw their net sales decline.
- Operating profit was EUR 18.3 million (EUR 19.9 million), representing 4.0%
(4.2%) of net sales. Profitability weakened in Itella Mail Communication where
the long-term declining trend of letter deliveries continued. Profitability
improved in Itella Information and Itella Logistics. Personnel costs decreased
by EUR 13.0 million during the reporting period. Net cash flow from operating
activities strengthened.
- Plans to renew the legal structure of Finnish operations moved ahead; postal
operations will be spun off into a subsidiary on January 1, 2011. After this,
Itella Mail Communication will be organized in the same way as other business
operations.
- In March, the working group appointed by the Finnish Ministry of Transport
and Communication published its report on the new Postal Services Act which is
scheduled to take effect in the beginning of 2011.
| Key figures of Itella Group | Q1 | Q1 | 2009 |
| | 2010 | 2009 | |
--------------------------------------------------------------------------------
| Net sales, MEUR | 453.9 | 477.6 | 1,819.7 |
--------------------------------------------------------------------------------
| Operating profit (EBIT), MEUR | 18.3 | 19.9 | 46.7 |
--------------------------------------------------------------------------------
| EBIT margin, % | 4.0 | 4.2 | 2.6 |
--------------------------------------------------------------------------------
| Operating profit (EBIT), MEUR *) | 17.6 | 21.6 | 86.3 |
--------------------------------------------------------------------------------
| EBIT margin, % *) | 3.9 | 4.5 | 4.7 |
--------------------------------------------------------------------------------
| Profit before tax, MEUR | 17.1 | -8.1 | 19.6 |
--------------------------------------------------------------------------------
| Return on equity, %, 12 months | 2.1 | -2.5 | -0.7 |
--------------------------------------------------------------------------------
| Return on investment, %, 12 months | 5.7 | 11.7 | 5.8 |
--------------------------------------------------------------------------------
| Equity ratio,% | 49.1 | 49.0 | 48.5 |
--------------------------------------------------------------------------------
| Gearing, % | 18.4 | 21.7 | 19.7 |
--------------------------------------------------------------------------------
| Gross capital expenditure, MEUR | 18.8 | 35.9 | 144.9 |
--------------------------------------------------------------------------------
| Personnel on average | 28,809 | 30,372 | 30,217 |
--------------------------------------------------------------------------------
* Excl. non-recurring items
Jukka Alho, President and CEO:
“The overall review of the first quarter did not suggest any clear changes in
the economic conditions. It is only recently that slight positive movements
have been observed. However, there is no certainty of a permanent upturn.
As far as the new Postal Services Act is concerned, we expect it to provide more
clarity. Clear and unambiguous guidelines are required for issues such as the
definition of universal services, the financing of postal services in sparsely
populated areas, and the allocation of costs incurred by the shared delivery
network on regulated products and other products, such as newspapers and
magazines. According to the report issued by the Ministry of Transport and
Communication, the new law provides an opportunity for funding through public
subsidies, but the threshold to its introduction is, in our opinion, quite high.
Continuous operational efficiency improvement will continue to be necessity for
Itella in the future.
All operations associated with postal services in Finland will be transferred
from the parent company to a new subsidiary, Itella Posti Oy, at the turn of the
year. The new legal structure will simplify management and increase the
financial transparency of operations. After the change, Itella Mail
Communication will have the same company structure as Itella Logistics and
Itella Information, which also operate through subsidiaries.”
APPENDICES
Itella's full Interim Report
FURTHER INFORMATION
Tuija Soanjärvi, CFO, tel 020 45 20907,
tuija.soanjarvi@itella.com
www.itella.com/financials
DISTRIBUTION
NASDAQ OMX Helsinki
Media
www.itella.com/group
FINANCIAL CALENDER 2010
Interim Report Q2 on Wednesday, July 28
Interim Report Q3 on Wednesday, October 27
PHOTOGRAPHS AND LOGOS
www.itella.com/media
Itella Group provides solutions for managing information and product flows.
Itella operates in mail communication, information logistics and logistics in
northern and central Europe, and in Russia. The Group employs some 29,000 staff
and reported net sales of EUR 1,820 million. Corporate services are delivered
under the Itella brand, while the Posti brand is used for services targeted at
consumers in Finland. More information is available online at
www.itella.com/group.
************************
ITELLA CORPORATION'S INTERIM REPORT FOR JANUARY-MARCH 2010
Market situation and business environment
During the reporting period, there were no changes in the economic conditions
that would have affected the demand for Itella's services. The competitive arena
remained unchanged, although some market moves reflecting the impending
deregulation of the postal industry could be observed.
In March, the working group appointed by the Finnish Ministry of Transport and
Communication published its report on the new Postal Services Act. The new act
addresses three questions of particular importance for Itella: how to define
universal services, how to secure and finance efficient delivery services in
sparsely populated areas, and how to allocate the costs of shared production
capacity to different products. As far as the financing system for universal
services suggested in the legislative proposal is concerned, Itella estimates
the threshold for introducing the support mechanisms proposed to be fairly high.
Another issue discussed in the Finnish media is the potential harmonization of
the value added tax treatment of postal services with the EU tax regulations.
Net sales and profit performance
The Itella Group's net sales in the first quarter of 2010 fell by 5.0% to EUR
453.9 million (EUR 477.6 million in January-March 2009). In local currencies,
the decline in net sales was 6.6%. Acquisitions had no impact on net sales
performance. Itella Information recorded largely unchanged net sales, while
Itella Logistics and Itella Mail Communication saw their net sales decline. Net
sales were down by 6.3% in Finland and by 2.0% in other countries. International
operations accounted for 31% (30%) of net sales.
Consolidated operating profit decreased by 8.0% to EUR 18.3 million (EUR 19.9
million) in the first quarter, representing 4.0% (4.2%) of net sales. Financial
performance in the period improved following a EUR 0.7 million revision of the
restructuring provisions. By contrast, in the previous year operating profit
was taxed by the EUR 1.7 million cost provisions for restructuring arrangements.
Operating profit picked up in Itella Information and decreased in Itella Mail
Communication. Itella Logistics was able to decrease its operating loss from the
previous year.
The Group's net financing costs were EUR -1.2 million (EUR -28.0 million).
Financing costs in the previous year were boosted by the considerable exchange
rate losses generated by the weakening of the Russian ruble. The strengthening
of the ruble during the reporting period does not affect the net financing
costs; instead, it affects ‘Other items of comprehensive income' in the Group's
Comprehensive consolidated income statement as the parent company's loan
receivables from the Russian companies included in the ItellaNLC sub-group are,
since October 1, 2009, classified as equity net investments in foreign units.
Consolidated profit after financial items was EUR 17.1 million (EUR -8.1
million). Income tax totaled EUR 8.8 million (EUR 2.7 million). The Group
recorded a net profit of EUR 8.3 million for the period (net loss of EUR 10.8
million).
Return on equity (rolling 12 months) was 2.1% (-2.5%).
Itella Mail Communication
Itella Mail Communication recorded net sales of EUR 224.8 million in
January-March (EUR 231.7 million), showing a decrease of 3.0%.
In January-March, business volumes developed as follows compared with the
corresponding period in 2009:
- In total, addressed letter deliveries fell by 1%. Addressed direct marketing
volumes decreased.
- Both newspaper and magazine delivery volumes dropped by about 5%.
- Non-addressed direct marketing volumes continued to grow.
Itella Mail Communication's operating profit decreased by 23.3% to EUR 18.4
million (EUR 24.0 million). Operating profit represented 8.2% of net sales
(10.4%). Profitability weakened due to the decrease in net sales, particularly
in important key products. At the same time, however, positive productivity
development helped reduce personnel costs.
The mail sorting and delivery modernization project moved ahead as planned with
about 80% of investments completed.
Itella Information
Itella Information's net sales remained largely unchanged at EUR 68.3 million
(EUR 68.0 million). Net sales grew in all product lines except multichannel
invoicing services, which showed a decrease of 6%. Net sales fell in Estonia,
Lithuania and Germany. In the Baltic countries, net sales declined for the first
time since the onset of the recession.
The business group posted an operating profit of EUR 5.7 million (EUR 5.1
million), representing 8.3% (7.5%) of net sales. The profitability improvement
could be attributed to several operational efficiency enhancement projects.
Itella Logistics
The net sales of Itella Logistics fell by 7.6% to EUR 172.6 million (EUR 186.7
million) in the first quarter. Net sales fell in all product lines and all
countries. In Finland, parcel delivery volumes shrank by 7% from the previous
year. The decrease in net sales could be attributed to increasingly fierce price
competition and weak demand.
Logistics volumes remained extremely low in all operating countries throughout
the first quarter. In Russia, there was no sign of the expected recovery in
retail, and some sectors even failed to reach the Q1/2009 level. For Itella
Logistics' profit performance, an upward trend in consumer demand is crucial
once the economy resumes a growth track in Itella's different operating
countries.
Itella Logistics recorded a loss of EUR 2.9 million (EUR -3.8 million),
representing -1.7% (-2.0%) of net sales. Measures to increase cost-efficiency
continued in all countries.
Financial position and capital expenditure
Consolidated net cash flow from operating activities before investment
activities increased to EUR 16.4 million (EUR 7.5 million).
No payments were made under the personnel profit-sharing scheme based on the
results for 2009 (last year, EUR 2.7 million was paid based on 2008 results).
Capital expenditure amounted to EUR 18.8 million (EUR 35.9 million). No
investments were made in acquisitions during the period, or in the corresponding
period a year earlier.
In accordance with the decision taken at the AGM, no dividend was paid based on
the results for 2009 (EUR 10.0 million).
At the end of March, liquid assets stood at EUR 190.3 million (EUR 131.2
million), and undrawn committed credit facilities totaled EUR 200.0 million (EUR
185.0 million). Commercial papers issued amounted to EUR 56.5 million. The
Group's interest-bearing liabilities were EUR 321.3 million (EUR 276.2 million).
The equity ratio stood at 49.1% (49.0%) and gearing was 18.4% (21.7%).
Personnel
In January-March, the Itella Group employed an average of 28,809 (30,372)
people. At the end of the period, the number of personnel was 28,755 (30,361)
with 21,717 (22,535) employees based in Finland. The average personnel reduction
compared with the end of March 2009 was 818 in Finland and 788 outside Finland.
At the end of the period, the Group employed personnel by segment as follows:
Itella Mail Communication 17,721, Itella Information 2,165, Itella Logistics
8,831 and other Group functions 38.
The Group's personnel costs decreased by about 6% or EUR 13.0 million during the
period compared with the previous year.
Changes in corporate structure
There were no changes in Itella's legal structure during the period.
Plans are currently in the pipeline to renew the legal structure of Finnish
operations with the objective of spinning off the postal operations into a
subsidiary on January 1, 2011; in other words to organize Itella Mail
Communication in
the same way as other business operations. This would improve the financial
transparency of operations in anticipation of the postal operations legislative
reform at the beginning of next year.
The spin-off also reflects on the structure of the business groups. Itella's
reporting changed on April 1, 2010, as a result of which domestic sales
operations, postal outlets, customer service and Itella Logistics' parcel
services were transferred to Itella Mail Communication.
Decisions made at the AGM
A decision was made at the Annual General Meeting of Itella Corporation held on
March 24, 2010 that no dividend will be paid to owner for the 2009 results.
Itella's Board of Directors has nine members. Arto Hiltunen, M.Sc. (Econ.), was
elected as a new member and Vice Chairman of the Board of Directors. Eero
Kasanen, Executive Dean, continues as the Chairman of the Board, and the members
continue to be Kalevi Alestalo, Financial Counsellor; Hele-Hannele Aminoff,
Director of Operations; Erkki Helaniemi, Partner; Päivi Pesola, Vice President;
Riitta Savonlahti, Executive Vice President; Maarit Toivanen-Koivisto, General
Manager and, as employee representative, Antero Palmolahti, National Chief Shop
Steward.
Itella's Supervisory Board has twelve members. New members elected to the
Supervisory Board were Paavo Arhinmäki (Left Alliance) and Johanna Karimäki
(Green Party). Eero Lehti, MP (National Coalition Party), continues as the
Chairman of the Supervisory Board, and Antti Rantakangas, MP (Centre Party) as
the Vice Chairman. The following members were re-elected: Susanna Huovinen, MP
(Social Democratic Party), Harri Jaskari, MP (National Coalition Party), Bjarne
Kallis, MP (Christian Democrats), Lauri Kähkönen, MP (Social Democratic
Party), Outi Mäkelä, MP (National Coalition Party), Reijo Ojennus, entrepreneur
(True Finns), Pertti Salovaara, MP (Centre Party) and Harry Wallin, engine
driver (Social Democratic Party).
KPMG Oy, a firm of authorized public accountants, was elected as the company's
auditor, with Pauli Salminen, Authorized Public Accountant, acting as the
principal auditor.
Short-term business risks and uncertainties
Business risks were explained in more detail in the financial statements for
2009. No changes have occurred with respect to these risks in the first quarter
that would affect near-term prospects.
Seasonal fluctuation
Seasonal fluctuation is characteristic of the Group's business operations. Net
sales and operating profit in the business segments are not accrued evenly over
the year. The first and fourth quarters are typically strong, while the second
and third quarters are weaker.
Events after the reporting period
In its decision issued in October 2009, the Finnish Communications Regulatory
Agency (FICORA) obligated Itella to change its method of allocating costs to
different products. On April 30, 2010, Itella has submitted a report requested
by FICORA explaining the cost structure of charges collected for universal
service products, as well as the price list for universal service products.
Itella's mail delivery volumes have declined rapidly following the economic
recession and the digitization of invoices and letters while the costs of its
five-day delivery network have remained virtually fixed. The radical decrease
in volumes has resulted in an increase in per-unit costs and in lower
profitability in all delivery types despite the efficiency enhancement measures
Itella has taken over the years. The number of addressed deliveries made in
Itella's network in the first quarter of 2010 was 9 percent lower than in
corresponding period in 2008. On a yearly basis this corresponds to a decline
of over 200 million addressed deliveries, with the decline in first- and
second-class letters accounting for approximately 120 million.
Using the calculation model and cost allocation principles required by FICORA,
Itella's profitability in universal service products fell by 32% in 2009
compared with FICORA's monitoring data for 2008. If price revisions are not
permitted, the current volume development will lead to a significant
profitability decline in 2010 in universal service products with their present
prices.
Outlook for the rest of the year
The economic conditions still remain uncertain. Digital substitution is
expected to accelerate in Finland, too, which will have a major effect on
Itella's earnings in the long term. On the other hand, the stringent economy and
efficiency-improvement demands make Itella's outsourcing solutions more
attractive to customers. Changes may be expected in the competitive environment
after the introduction of the changes in legislation regulating the postal
industry in the beginning of next year.
Due to the internationalization of the Group exchange rate fluctuations have an
impact on Itella's finances.
Productivity enhancement measures have helped adjust Itella's costs to
correspond to the volume development. Attention will be paid to developing
consistent operating methods across the Group. The savings generated by the
personnel reductions will begin to materialize during 2010, and the strict cost
regime will continue.
The timing and volume of investments will be considered carefully. The level of
capital expenditure will decrease from the previous year as the sorting network
overhaul in Finland is almost complete.
Helsinki, April 29, 2010
Itella Corporation
Board of Directors
APPENDICES
Accounting principles
Consolidated key figures
Comprehensive consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Statement of changes in shareholders' equity
Segment information
Consolidated contingent liabilities
Accounting principles
Itella has applied the same IFRS-compliant accounting principles and methods
in the preparation of this interim report as in its financial statements for
2009 but all the requirements of IAS 34 'Interim Financial Reporting' have
not been complied with.
New and revised IFRS standards
As of January 1, 2010 the Group applies the following revised standards:
- IFRS 3 Business Combinations
- IAS 27 Consolidated and Separate Financial Statements
These new and revised standards have no material impact on the data disclosed
in the financial statements bulletin.
Information in this interim report is unaudited.
Key figures of Itella Group | 1-3 | 1-3 | 1-12 |
| 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net sales, MEUR | 453.9 | 477.6 | 1,819.7 |
--------------------------------------------------------------------------------
| Operating profit (EBIT), MEUR | 18.3 | 19.9 | 46.7 |
--------------------------------------------------------------------------------
| EBIT margin, % | 4.0 | 4.2 | 2.6 |
--------------------------------------------------------------------------------
| Operating profit (EBIT), MEUR *) | 17.6 | 21.6 | 86.3 |
--------------------------------------------------------------------------------
| EBIT margin, % *) | 3.9 | 4.5 | 4.7 |
--------------------------------------------------------------------------------
| Result before tax, MEUR | 17.1 | -8.1 | 19.6 |
--------------------------------------------------------------------------------
| Return on equity, %, 12 months | 2.1 | -2.5 | -0.7 |
--------------------------------------------------------------------------------
| Return on investment, %, 12 months | 5.7 | 11.7 | 5.8 |
--------------------------------------------------------------------------------
| Equity ratio,% | 49.1 | 49.0 | 48.5 |
--------------------------------------------------------------------------------
| Gearing, % | 18.4 | 21.7 | 19.7 |
--------------------------------------------------------------------------------
| Capital expenditure, MEUR | 18.8 | 35.9 | 144.9 |
--------------------------------------------------------------------------------
| Personnel on average | 28,809 | 30,372 | 30,217 |
--------------------------------------------------------------------------------
| *) Excl. non-recurring items
Comprehensive Consolidated Income Statement
| 1-3 | 1-3 | 1-12 |
| EUR million | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net sales | 453.9 | 477.6 | 1819.7 |
--------------------------------------------------------------------------------
| Other operating income | 4.3 | 3.0 | 14.3 |
--------------------------------------------------------------------------------
| Share of associated companies' results | 0.0 | 0.0 | 0.1 |
--------------------------------------------------------------------------------
| Materials and services | 118.2 | 125.5 | 474.9 |
--------------------------------------------------------------------------------
| Employee benefits | 218.4 | 231.4 | 888.0 |
--------------------------------------------------------------------------------
| Depreciation and amortisation | 21.0 | 18.9 | 77.8 |
--------------------------------------------------------------------------------
| Impairment losses | | | 13.5 |
--------------------------------------------------------------------------------
| Other operating expenses | 82.4 | 84.9 | 333.2 |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 18.3 | 19.9 | 46.7 |
--------------------------------------------------------------------------------
| % of net sales | 4.0 % | 4.2 % | 2.6 % |
--------------------------------------------------------------------------------
| Financial income and expenses | -1.2 | -28.0 | -27.1 |
--------------------------------------------------------------------------------
| Profit/loss before income tax | 17.1 | -8.1 | 19.6 |
--------------------------------------------------------------------------------
| % of net sales | 3.8 % | -1.7 % | 1.1 % |
--------------------------------------------------------------------------------
| Income tax | -8.8 | -2.7 | -24.2 |
--------------------------------------------------------------------------------
| Profit/loss for the financial period | 8.3 | -10.8 | -4.6 |
--------------------------------------------------------------------------------
| % of net sales | 1.8 % | -2.3 % | -0.3 % |
--------------------------------------------------------------------------------
| Other items of comprehensive income | | | |
--------------------------------------------------------------------------------
| Available-for-sale financial assets | 0.0 | 0.0 | -0.3 |
--------------------------------------------------------------------------------
| Translation differences | 25.3 | -7.7 | -4.3 |
--------------------------------------------------------------------------------
| Comprehensive income, total | 33.6 | -18.5 | -9.2 |
--------------------------------------------------------------------------------
| Profit for the financial period attributable to | | |
--------------------------------------------------------------------------------
| Parent company shareholders | 8.3 | -10.3 | -4.6 |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | -0.5 | 0.0 |
--------------------------------------------------------------------------------
| Comprehensive income attributable to | | | |
--------------------------------------------------------------------------------
| Parent company shareholders | 33.6 | -18.0 | -9.2 |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | -0.5 | 0.0 |
--------------------------------------------------------------------------------
Consolidated Balance Sheet
| 31 March | 31 March | 31 Dec |
| EUR million | 2010 | 2009 | 2009 |
---------------------------------------------------------------------------
| Non-current assets | | | |
---------------------------------------------------------------------------
| Goodwill | 166.6 | 176.1 | 165.2 |
---------------------------------------------------------------------------
| Other intangible assets | 79.4 | 80.0 | 80.1 |
---------------------------------------------------------------------------
| Investment property | 4.3 | 4.6 | 4.4 |
---------------------------------------------------------------------------
| Property, plant and equipment | 710.2 | 656.2 | 688.3 |
---------------------------------------------------------------------------
| Investments in associated companies | 0.6 | 0.9 | 0.6 |
---------------------------------------------------------------------------
| Other non-current investments | 1.9 | 0.4 | 2.4 |
---------------------------------------------------------------------------
| Non-current receivables | 7.2 | 8.9 | 8.4 |
---------------------------------------------------------------------------
| Deferred tax assets | 12.5 | 12.0 | 12.7 |
---------------------------------------------------------------------------
| Total non-current assets | 982.7 | 939.1 | 962.1 |
---------------------------------------------------------------------------
| Current assets | | | |
---------------------------------------------------------------------------
| Inventories | 6.1 | 6.7 | 6.5 |
---------------------------------------------------------------------------
| Trade and other receivables | 271.8 | 280.2 | 271.4 |
---------------------------------------------------------------------------
| Current tax assets | 5.3 | 10.9 | 4.0 |
---------------------------------------------------------------------------
| Financial assets available-for-sale | 2.5 | 3.8 | 2.4 |
---------------------------------------------------------------------------
| Financial assets at fair value | 85.6 | 70.1 | 79.4 |
| through profit or loss *) | | | |
---------------------------------------------------------------------------
| Cash and cash equivalents *) | 104.7 | 61.1 | 82.3 |
---------------------------------------------------------------------------
| Total current assets | 476.1 | 432.8 | 446.0 |
---------------------------------------------------------------------------
| Total assets | 1,458.8 | 1,371.9 | 1,408.1 |
---------------------------------------------------------------------------
| Equity | | | |
---------------------------------------------------------------------------
| Share capital | 70.0 | 70.0 | 70.0 |
---------------------------------------------------------------------------
| Contingency reserve | 142.7 | 142.7 | 142.7 |
---------------------------------------------------------------------------
| Fair value reserve | 0.0 | 0.3 | 0.0 |
---------------------------------------------------------------------------
| Translation differences | 4.6 | -24.1 | -20.7 |
---------------------------------------------------------------------------
| Retained earnings | 491.9 | 477.9 | 483.6 |
---------------------------------------------------------------------------
| Equity attributable to equity | 709.2 | 666.8 | 675.6 |
| holders of the parent company | | | |
---------------------------------------------------------------------------
| Minority interest | 1.7 | 1.1 | 1.6 |
---------------------------------------------------------------------------
| Total equity | 710.9 | 667.9 | 677.2 |
---------------------------------------------------------------------------
| Non-current liabilities | | | |
---------------------------------------------------------------------------
| Deferred tax liabilities | 49.9 | 47.2 | 48.3 |
---------------------------------------------------------------------------
| Non-current interest-bearing | 231.6 | 167.1 | 246.1 |
| liabilities | | | |
---------------------------------------------------------------------------
| Other non-current liabilities | 15.3 | 35.5 | 15.1 |
---------------------------------------------------------------------------
| Non-current provisions | 9.5 | 0.2 | 9.2 |
---------------------------------------------------------------------------
| Defined benefit pension plan | 6.5 | 7.3 | 6.5 |
| obligations | | | |
---------------------------------------------------------------------------
| Total non-current liabilities | 312.8 | 257.3 | 325.2 |
---------------------------------------------------------------------------
| Current liabilities | | | |
---------------------------------------------------------------------------
| Current interest-bearing liabilities | 89.7 | 109.1 | 48.0 |
---------------------------------------------------------------------------
| Trade payables and other liabilities | 325.1 | 332.3 | 335.1 |
---------------------------------------------------------------------------
| Current tax liabilities | 10.5 | 2.9 | 9.0 |
---------------------------------------------------------------------------
| Current provisions | 9.8 | 2.4 | 13.6 |
---------------------------------------------------------------------------
| Total current liabilities | 435.2 | 446.7 | 405.7 |
---------------------------------------------------------------------------
| Total liabilities | 747.9 | 704.0 | 730.9 |
---------------------------------------------------------------------------
| Total equity and liabilities | 1,458.8 | 1,371.9 | 1,408.1 |
---------------------------------------------------------------------------
| Interest-bearing liabilities | 321.3 | 276.2 | 294.1 |
---------------------------------------------------------------------------
*) Items classified under the Group's cash and cash equivalents have a maximum
maturity of three months from the time of acquisition. Data for the comparison
year have been adjusted to match this definition.
Consolidated Cash Flow Statement
| 1-3 | 1-3 | 1-12 |
| EUR million | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Result before tax | 17.1 | -8.1 | 19.6 |
--------------------------------------------------------------------------------
| Total adjustments | 21.8 | 47.2 | 120.2 |
--------------------------------------------------------------------------------
| Change in net working capital | -9.7 | -16.3 | 16.8 |
--------------------------------------------------------------------------------
| Cash flow before | | | |
--------------------------------------------------------------------------------
| financial items and income tax | 29.2 | 22.8 | 156.6 |
--------------------------------------------------------------------------------
| Financial items (net) | -3.5 | -8.8 | -29.0 |
--------------------------------------------------------------------------------
| Tax paid | -9.3 | -6.5 | -16.9 |
--------------------------------------------------------------------------------
| Cash flow from operating activities (net) | 16.4 | 7.5 | 110.7 |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries less cash and | - | 0.0 | -22.8 |
| cash equivalents | | | |
--------------------------------------------------------------------------------
| Purchase of intangible assets and property, | -18.7 | -35.9 | -121.7 |
| plant and equipment | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of intangible and | 1.4 | 1.1 | 2.2 |
| tangible assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of subsidiaries and | - | 0.0 | 1.4 |
| businesses | | | |
--------------------------------------------------------------------------------
| Change in financial assets at fair value | -6.1 | 9.1 | 5.4 |
| through profit or loss *) | | | |
--------------------------------------------------------------------------------
| Cash flow from other investments | 0.0 | 0.0 | -2.2 |
--------------------------------------------------------------------------------
| Cash flow from investing activities (net) | -23.4 | -25.7 | -137.7 |
--------------------------------------------------------------------------------
| Change in loans (net) | 29.1 | 40.1 | 71.8 |
--------------------------------------------------------------------------------
| Finance lease principal payments | -1.9 | -2.9 | -9.9 |
--------------------------------------------------------------------------------
| Dividends paid | - | -10.0 | -10.0 |
--------------------------------------------------------------------------------
| Cash flow from financing activities (net) | 27.2 | 27.2 | 51.9 |
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | 20.2 | 9.0 | 24.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at period-start *) | 82.3 | 49.5 | 49.5 |
--------------------------------------------------------------------------------
| Effect of changes in exchange rates | 2.2 | 2.8 | 7.9 |
--------------------------------------------------------------------------------
| Change in fair value of cash and cash | 0.0 | -0.2 | 0.0 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at period-end *) | 104.7 | 61.1 | 82.3 |
--------------------------------------------------------------------------------
*) Items classified under the Group's cash and cash equivalents have a maximum
maturity of three months from the time of acquisition. Data for the comparison
year have been adjusted to match this definition.
Statement of changes in shareholders' equity
| EUR million | Equity attributable to equity |
| holders of the parent company |
--------------------------------------------------------------------------------
| | Share | Cont | Fair | Tran | Retai | Total | Minor | Total
| | capi | inge | valu | slat | ned | | ity | equit |
| | tal | ncy | e | ion | earni | | inter | y |
| | | rese | rese | diff | ngs | | est | |
| | | rve | rve | eren | | | | |
| | | | | ces | | | | |
--------------------------------------------------------------------------------
| Equity 1 Jan | 70.0 | 142.7 | 0.3 | -16.4 | 498.2 | 694.8 | 1.5 | 696.3
| 2009 | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | -10.0 | -10.0 | | -10.0
| paid | | | | | | | | |
--------------------------------------------------------------------------------
| Other changes | | | | | | - | 0.1 | 0.1
--------------------------------------------------------------------------------
| Result for | | | | | -10.3 | -10.3 | -0.5 | -10.8
| the financial | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | | | | -7.7 | | -7.7 | | -7.7
| translation | | | | | | | | |
| differences | | | | | | | | |
--------------------------------------------------------------------------------
| Equity 31 | 70.0 | 142.7 | 0.3 | -24.1 | 477.9 | 666.8 | 1.1 | 667.9
| March 2009 | | | | | | | | |
--------------------------------------------------------------------------------
| Equity 1 Jan | 70.0 | 142.7 | 0.0 | -20.7 | 483.6 | 675.6 | 1.6 | 677.2
| 2010 | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | - | - | | -
| paid | | | | | | | | |
--------------------------------------------------------------------------------
| Result for | | | | | 8.3 | 8.3 | | 8.3
| the financial | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | | | | 25.3 | | 25.3 | 0.1 | 25.4
| translation | | | | | | | | |
| differences | | | | | | | | |
--------------------------------------------------------------------------------
| Equity 31 | 70.0 | 142.7 | 0.0 | 4.6 | 491.9 | 709.2 | 1.7 | 710.9
| March 2010 | | | | | | | | |
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Segment Information
| 1-3 | 1-3 | 1-12 |
EUR million | 2010 | 2009 | 2010 |
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| Net sales by business | | | |
| segment | | | |
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| Itella Mail Communication | 224.8 | 231.7 | 898.7 |
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| Itella Information | 68.3 | 68.0 | 247.2 |
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| Itella Logistics | 172.6 | 186.7 | 713.9 |
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| Other operations | 2.6 | 4.1 | 13.0 |
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| - eliminations | -14.4 | -12.9 | -53.1 |
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| Total | 453.9 | 477.6 | 1,819.7 |
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| Operating profit/loss | | | |
| (EBIT) by business segment | | | |
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| Itella Mail Communication | 18.4 | 24.0 | 63.5 | 1) |
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| Itella Information | 5.7 | 5.1 | 15.3 | 2) |
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| Itella Logistics | -2.9 | -3.8 | -15.2 | 3) |
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| Other activities | -2.9 | -5.4 | -16.9 | 4) |
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| Total | 18.3 | 19.9 | 46.7 | |
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| Financial income and | -1.2 | -28.0 | -27.1 | |
| expenses | | | | |
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| Result before income tax | 17.1 | -8.1 | 19.6 | |
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| Personnel at period-end | | | | |
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| Itella Mail Communication | 17,721 | 18,159 | 17,961 | |
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| Itella Information | 2,165 | 2,165 | 1,919 | |
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| Itella Logistics | 8,831 | 9,999 | 9,649 | |
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| Other operations | 38 | 38 | 39 | |
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| Total | 28,755 | 30,361 | 29,568 | |
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| Net sales by geographical | | | | |
| location | | | | |
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| Finland | 312.8 | 333.7 | 1,275.7 | |
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| Scandinavia | 64.4 | 59.7 | 263.4 | |
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| Baltic countries and | 44.4 | 43.7 | 170.6 | |
| Russia | | | | |
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| Other countries | 32.3 | 40.5 | 110.0 | |
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| Total | 453.9 | 477.6 | 1,819.7 | |
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1) The result for Itella Mail Communication 2009 includes EUR 21.1 million of
restructuring costs.
2) The result for Itella Information 2009 includes EUR 1.5 million of
restructuring costs.
3) The result for Itella Logistics 2009 includes EUR 6.2 million of
restructuring costs and EUR 10.6 million of goodwill impairment.
4) Other operations 2009 includes EUR 0.2 million of restructuring costs.
The Group's contingent liabilities
| EUR million | 31 March | 31 March | 31 Dec 2009 |
| | 2010 | 2009 | |
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| Pledges for own behalf | 18.1 | 64.1 | 14.6 |
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| Lease commitments | 359.4 | 208.7 | 365.7 |
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| Derivative contracts | | | |
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| EUR million | 31 March | 31 March | 31 Dec 2009 |
| | 2010 | 2009 | |
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| Currency forward contracts | | | |
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| Fair value | -1.7 | -1.2 | -0.7 |
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| Nominal value | 108.8 | 177.8 | 85.9 |
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| Interest rate swaps | | | |
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| Fair value | 2.3 | - | 0.2 |
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| Nominal value | 70.0 | - | 70.0 |
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Derivative contracts were used to hedge against currency and interest rate
risks. Currency forward contracts were measured at fair value by using the
market prices on the closing day, and the fair values of interest rate swaps
are the present values of forecast future cash flows.
