RNS Number:3442R
TPG N.V.
27 October 2003
Excellent Mail and Express performances in TPG's third quarter
Good progress in Logistics transformation plan
TPG has today announced its third quarter 2003 results
Highlights:
* Solid improvement in free cash flow
* Excellent performances in Mail and Express, offset by lower earnings in
Logistics
* Good progress in execution of Logistics transformation plan (TtS)
* Goodwill impairment charge and asset write downs of Euro193 million in line
with
preliminary estimates leading to negative net income for quarter
* Outlook for 2003 full year unchanged
Q3 2003 Q3 2002
Euromil Euromil
Revenues 2,829 2,805 0.9%
Operating income (EBIT) (16) 191 (1(108.4%)
Net income (88) 99 (1(188.9%)
Underlying net income* 117 99 18.2%
Underlying earnings per share* 24.6 20.8 18.2%
Free cash flow 186 122 52.5%
*before pension increase and one-off costs (see page 2)
Peter Bakker, CEO :
"Given the economic background, the results delivered by Mail and Express in the
quarter are outstanding achievements. Although the earnings in Logistics are
still depressed, underlying performance has been stabilised. Good progress is
being made by our new Managing Director Dave Kulik and his team with the
implementation of the TtS programme and the actions taken so far have started to
provide tangible savings. Despite the one-offs in the quarter, which were in
line with previous guidance, the achievement of a healthy improvement in free
cash flow is indicative of the underlying strength of the business and the focus
of management on increasing shareholder value".
Group Summary Q3 2003 Q3 2002 % Change
Third quarter Reported One-offs * Underlying Operational FX Total
Euromil
Revenues 2,829 2,829 2,805 3.9% -3.0% 0.9%
EBITA 202 24 226 230 4.4% -6.1% -1.7%
Operating (16) 207 191 191 7.3% -7.3% 0.0%
Income (EBIT)
Net income (88) 199 111 99 17.2% -5.1% 12.1%
Earnings per (18.5) 23.3 20.8 12.1%
share (euro
cents)
Net income (82) 199 117 99 23.3% -5.1% 18.2%
from
continuing
operations
excluding
pension
increase (see
note 3 page
19)
Group Summary YTD 2003 YTD % Change
2002
Nine months Reported One-offs * Underlying Operational FX Total
Euromil
Revenues 8,682 8,682 8,602 5.1% -4.2% 0.9%
EBITA 786 37 823 818 3.4% -2.9% 0.6%
Operating 491 220 711 703 3.8% -2.7% 1.1%
Income (EBIT)
Net income 195 207 402 387 6.0% -2.1% 3.9%
Earnings per 41.0 84.6 81.4 3.9%
share (euro
cents)
Net income 213 207 420 387 10.6% -2.1% 8.5%
from
continuing
operations
excluding
pension
increase (see
note 3 page 19)
Divisional Q3 2003 Q3 2002 % Change
EBITA Summary
Third quarter Reported One-offs * Underlying Operational FX Total
Euromil
Mail 163 163 144 16.0% -2.8% 13.2%
Express 47 47 37 45.9% -18.9% 27.0%
Logistics 1 24 25 41 -31.7% -7.3% -39.0%
Non allocated (9) (9) 8
EBITA 202 24 226 230 4.4% -6.1% -1.7%
Divisional YTD 2003 YTD % Change
EBITA Summary 2002
Nine months Reported One-offs * Underlying Operational FX Total
Euromil
Mail 593 593 557 6.5% 0.0% 6.5%
Express 165 165 139 26.6% -7.9% 18.7%
Logistics 42 37 79 129 -29.5% -9.3% -38.8%
Non allocated (14) (14) (7)
EBITA 786 37 823 818 3.4% -2.8% 0.6%
Q3 YTD
*One-offs
(Euromil) Gross Net Gross Net
(before tax) (after tax) (before tax) (after tax)
TtS costs 14 9 27 17
Asset 10 7 10 7
write-downs
Logistics 24 16 37 24
one-off costs
Goodwill 183 183 183 183
impairment
costs
Total 207 199 220 207
one-offs
Third quarter group overview
A strong performance in the third quarter of 2003 has again demonstrated the
overall resilience of the TPG business model. The underlying economic conditions
in the quarter remained weak and the relative strength of the euro continues to
adversely impact comparisons to the previous year.
Group revenues increased by 0.9% to Euro2,829 million, equivalent to a growth of
3.9% at constant exchange rates. Mail and Express earnings continue to be strong
and the execution of the Logistics transformation plan (TtS) is on track. Euro14
million of TtS one-off costs were incurred in the quarter as well as a Euro10
million asset write-down.
Excluding the after tax impact of the Logistics one-off costs and the goodwill
impairment, net income increased by 12.1%. Net income from continuing
operations, excluding the one-offs and a year on year pension increase of Euro9
million, was 18.2% higher (23.3% at constant exchange rates).
Strong free cash flow generation of Euro186 million in the quarter represents a 52%
increase compared to the third quarter of last year and was fuelled by further
working capital savings and tight controls over capital expenditure.
Review of operations
Mail continued to perform strongly in the third quarter, significantly
increasing its earnings by 13.2%, despite an increase in the rate of decline in
Dutch volumes compared to the first half year and higher pension costs. The main
driver of this is the continuing good progress in the roll out of the Cost
Flexibility programme, together with ongoing productivity measures and tight
cost control.
Express also had an excellent quarter with earnings increasing by 27% and the
operating margin rising to 4.6% from 3.7% last year. On like for like exchange
rates the earnings increase was over 45% and the third quarter margin was 5.1%.
Revenue quality yields have now been positive for four full years and the very
clear and persistent focus provided by our Express strategy continues to pay
off.
Logistics operational performance has stabilised but continues to be affected by
the three business units France, Italy non-automotive and Germany. The main
focus in the third quarter was the implementation of the TtS programme and many
of the required actions have now been taken. Year to date, one-off costs of Euro27
million have been incurred as part of TtS, including Euro14 million in the third
quarter. Total TtS one-off costs are still expected to be around Euro65 million,
with most of the remaining cost actions expected in the final quarter of this
year.
Financial Review
A goodwill impairment charge of Euro183 million and an asset write-down of Euro10
million were made in the third quarter. The sum of these two items (Euro193
million) is in line with the preliminary estimate announced at the half year
stage. No further charges for goodwill impairment or asset write-downs are
anticipated. The impairments are in respect of France, Italy non-automotive,
Germany and the Nordics in Logistics and UK Data and Document Management in
Mail.
Net financial expense was some 25% lower than last year mainly as a result of
lower net debt and a higher proportion of variable rate debt. The underlying
effective tax rate in the quarter improved to 33.9% compared to 37.5% last year,
mainly due to a favourable European ruling on the tax deductibility of interest
expense in respect of foreign subsidiaries.
Prospects
The Board of Management does not expect any significant change in underlying
economic conditions in the final quarter of the year and reiterates its previous
outlook statement for the full 2003 year : Growth in net income from continuing
operations, excluding additional pension costs, one-off costs in Logistics and
goodwill impairment, is expected to be around 5% at constant rates of exchange.
Update of events in 3rd Quarter 2003 to date
August 28 Express adds Naples and Florence to European
air network
September 10 TPG Post obtains favourable court decision on
the delivery of tax forms
September 18 Logistics contract with NACCO in Europe and North
America announced
September 23 Acquisition of Full Service, an Italian print and
mail company
October 2 OPTA compliments TPG on service quality and postal location
policy
October 16 Euro600 million standby credit facility signed
* Very strong third quarter performance
* Improvement driven by Cost Flexibility and other efficiency savings
* Netherlands volumes decline higher than first half year
* Further positive developments in European Mail Networks
Summary Q3 2003 Q3 2002 % Change YTD 2003 YTD 2002 % Change
Euromil Euromil Euromil Euromil
Revenues 897 918 -2.3% 2,863 2,887 -0.8%
EBITA 163 144 13.2% 593 557 6.5%
Operating margin 18.2% 15.7% 20.7% 19.3%
Mail revenues fell by 2.3% in the third quarter mainly due to lower revenues in
the Netherlands and Cross Border. Revenues from European Mail Networks and Data
& Document Management (Cendris) both grew significantly, partly through
acquisitions.
Third quarter earnings increased by 13.2% to Euro163 million and the operating
margin improved significantly from 15.7% last year to 18.2%. The increase in
earnings is driven by Mail Netherlands together with continuing positive
developments in the European Mail Networks.
The main contributor to this excellent performance is the Cost Flexibility
programme in Mail Netherlands which delivered a further Euro16 million savings in
the quarter. Year to date Cost Flexibility savings are now Euro52 million
(cumulative Euro78 million from the start of the programme). Reduced sick leave,
and lower costs of materials and services also contributed to the enhanced
performance.
An additional Euro9 million in pension costs has been absorbed in the quarter
compared to last year (Euro26 million on a year to date basis).
The preliminary assessment of the quality of next day delivery in the
Netherlands in the quarter is 96.4%, well ahead of the government target of 95%.
Revenue Analysis
Third Quarter Q3 2003 Q3 2002 % Change Org% Acq% FX%
Euromil Euromil
Mail Netherlands 604 634 -4.7% -3.6% -1.1% 0.0%
Cross Border 142 155 -8.4% -5.8% 0.0% -2.6%
European Mail Networks 100 85 17.6% 14.1% 5.9% -2.4%
Data & Document Management 51 44 15.9% -4.5% 22.7% -2.3%
Mail 897 918 -2.3% -2.3% 0.8% -0.8%
Nine Months YTD 2003 YTD 2002 % Change Org% Acq% FX%
Euromil Euromil
Mail Netherlands 1,967 2,015 -2.4% -2.2% -0.2% 0.0%
Cross Border 447 474 -5.7% -1.9% 0.0% -3.8%
European Mail Networks 297 258 15.1% 10.8% 6.2% -1.9%
Data & Document Management 152 140 8.6% 0.7% 10.0% -2.1%
Mail 2,863 2,887 -0.8% -0.8% 0.9% -0.9%
Mail Netherlands revenues fell by 4.7% in the quarter. Organic revenues declined
by 3.6% of which 2.0% was caused by lower Post Office and other revenues.
Domestic and direct mail revenues combined had a 1.6% negative impact on Mail
Netherlands revenues with positive price and mix effects only partially
compensating for lower volumes.
Total addressed mail volumes declined by 3.4% in the quarter (a decline of 2.0%
year to date). This compares to a decline of 1.3% in the first half year.
Domestic mail volumes fell by 1.3% (a fall of 0.3% year to date compared to a
positive 0.1% in the first half year) mainly due to a 2% decline in letterbox
mail and lower parcels volumes. Direct mail volumes declined by 6.6% in the
quarter ( a fall of 4.4% year to date compared to a 3.4% fall in the first half
year). Most of this decline is due to lower printed matter volumes caused by
cost saving programmes at key accounts.
Cross Border revenues fell by 8.4% in the quarter. Organic growth was a negative
5.8%, due to the Spring business where revenues were under pressure,
particularly in Europe. Revenues from the TPG Post brand were stable.
European Mail Networks again had strong revenue growth with total revenues
increasing by 17.6% in the quarter. The organic growth rate was 14.1% with most
countries showing good organic growth, especially Italy and the UK. Acquisitions
in the current year, including Full Service in Italy and Fischer and Blitzpunkt
in Germany, added a further 5.9% to revenue growth.
Data & Document Management revenues increased by 15.9% in the quarter.
Acquisitions of DocVision in the Netherlands earlier this year and Dimar in the
Czech Republic at the end of last year contributed a 22.7% growth in revenues.
Organic growth was under pressure in the quarter mainly due to the economic
climate which has caused many of our customers to focus on reducing costs and
has also resulted in long lead times for attracting new customers.
* Impressive increase in third quarter earnings
* Further margin improvement driven by strongly positive revenue quality
yield
* Profit improvements in almost all business units
* Good organic revenue growth
Summary Q3 2003 Q3 2002 % Change YTD 2003 YTD 2002 % Change
Euromil Euromil Euromil Euromil
Revenues 1,032 1,012 2.0% 3,105 3,071 1.1%
EBITA 47 37 27.0% 165 139 18.7%
Operating margin 4.6% 3.7% 5.3% 4.5%
Express revenues grew organically by 5.6% in the third quarter. Nominal revenue
growth was reduced to 2.0% as a result of adverse foreign exchange translation
effects due to the stronger euro.
Third quarter earnings of Euro47 million showed an impressive 27% increase, even
after incurring a Euro7 million negative foreign exchange impact, pushing up the
operating margin to 4.6% ( or 5.1% at constant exchange rates) compared to 3.7%
in the same quarter last year.
Revenue quality yield was again strongly positive and was the major contributor
to the overall profit performance. Positive revenue quality yields were achieved
in almost all business units. The implementation of standard commercial policies
that concentrate the efforts of the sales force on winning profitable customers
in the target business to business market segment is a continuing key factor in
achieving the improvement in profitability.
Almost all business units achieved solid year on year profit improvements, most
significantly in France, Germany, Benelux, Australia, Eastern Europe, Spain and
Austria.
European air network utilisation was managed to a satisfactory level in the
quarter which avoided the need to seek further short term capacity. Further
network improvements are expected from the introduction in the third quarter of
two new airports in Italy.
Revenue Analysis
Third Quarter Q3 2003 Q3 2002 % Change Org% Acq% FX%
Euromil Euromil
Express Europe 826 822 0.5% 3.4% 0.1% -3.0%
Express ROW 206 190 8.4% 14.7% 0.0% -6.3%
Express 1,032 1,012 2.0% 5.6% 0.1% -3.7%
Nine Months YTD 2003 YTD 2002 % Change Org% Acq% FX%
Euromil Euromil
Express Europe 2,529 2,503 1.0% 4.5% -0.2% -3.3%
Express ROW 576 568 1.4% 12.7% 0.0% -11.3%
Express 3,105 3,071 1.1% 6.1% -0.2% -4.8%
Organic revenue growth in Europe was 3.4% in the third quarter although this was
offset by a 3.0% adverse foreign exchange impact. Total core kilos carried
increased by 5.1% compared to the same quarter last year with core consignments
growing by 2.5%. Revenue quality yield was again strongly positive at 2.8%.
In terms of the bigger countries, increased volumes were seen in Germany and the
UK although the volume of consignments carried in France, Benelux and Italy
fell, partly due to a continued economic slowdown but also as a result of a
strong focus on uprating or discarding lower yielding customers.
Revenues in the Rest of the World increased by 8.4%, with organic revenue growth
an impressive 14.7%, fuelled by strong growth in Australia, Asia and the Middle
East.
* Operational performance stabilised
* Implementation of TtS actions on track: further one-off costs booked in
the quarter
* Majority of operational shortfall caused by three problem business units
* Good organic revenue growth and stable pipeline
Summary Q3 2003 Q3 2002 % Change YTD 2003 YTD 2002 % Change
Euromil Euromil Euromil Euromil
Revenues 909 882 3.1% 2,738 2,663 2.8%
EBITA 1 41 -97.6% 42 129 -67.4%
Operating margin 0.1% 4.6% 1.5% 4.8%
Operating margin excl one-off costs 2.8% 4.6% 2.9% 4.8%
Logistics revenues increased organically by 7.5% in the third quarter. An
adverse foreign exchange translation impact of 4.4% reduced nominal revenue
growth to 3.1%.
Earnings in the quarter were significantly affected by the incidence of Euro24
million of one-off charges. Costs of Euro14 million were incurred in respect of
specific actions taken in the quarter to implement the Transformation through
Standardisation (TtS) programme. These costs related to warehouse closures,
contract terminations and overhead restructuring. In addition, a write down of
assets of Euro10 million was booked in the quarter as a consequence of the goodwill
impairment review. Total one-off costs incurred so far this year are Euro37
million, consisting of Euro27 million costs under the TtS programme and Euro10 million
asset write downs.
Underlying third quarter earnings, excluding these one-off costs, were Euro25
million, equivalent to an operating margin of 2.8%. Eliminating the adverse
impact of foreign exchange rate translation (Euro3 million) results in an operating
margin of 3.0% at constant rates compared to 4.6% in the same quarter last year.
Most business units continue to be affected by low volumes as a result of the
continuing weak economic climate especially in Europe. The majority of the
operational shortfall in earnings in the third quarter however were again
attributable to France, Italy non-automotive and Germany. Earnings in France and
Italy non-automotive have fallen year on year mainly due to operational
difficulties on various contracts and increased overheads which could not be
completely passed on to the customer. Despite good revenue growth in Germany
from new contracts, earnings in that country have also declined partly due to
lower volumes in the Innight business which has a relatively high fixed cost
base. All of these operational issues are being addressed by the TtS plan.
The adverse impact from these three business units has been offset to some
extent by continuing good performances in other countries, particularly the UK
and North America, through good commercial management and cost controls.
Revenue Analysis
Third Quarter Q3 2003 Q3 2002 % Change Org% Acq% FX%
Euromil Euromil
Logistics Europe 678 659 2.9% 5.6% 0.0% -2.7%
Logistics North America 154 155 -0.6% 9.7% 0.0% -10.3%
Logistics ROW 77 68 13.2% 20.6% 0.0% -7.4%
Logistics 909 882 3.1% 7.5% 0.0% -4.4%
Nine Months YTD 2003 YTD 2002 % Change Org% Acq% FX%
Euromil Euromil
Logistics Europe 2,038 1,936 5.3% 4.2% 3.9% -2.8%
Logistics North America 483 537 -10.1% 8.7% -2.8% -16.0%
Logistics ROW 217 190 14.2% 37.9% 0.0% -23.7%
Logistics 2,738 2,663 2.8% 7.4% 2.3% -6.9%
The net organic revenue growth of 7.5% achieved in the third quarter came from
new contracts (+12.3%) and a positive volume and price impact (+0.8%), offset by
terminated contracts (-5.6%).
New contract wins in the third quarter have an annualised revenue of Euro110
million. Contract renewals provided further annualised revenues of Euro65 million.
Contract terminations amounted to annualised revenues of Euro41 million. The
business development pipeline remains at Euro1.4 billion with the higher certainty
portion stable at around Euro200 million.
Organic growth in Europe was a healthy 5.6% fuelled by recent new contract wins
and the commencement of the sole operator project at Fiat in Italy.
North America organic revenue growth was 9.7% again mainly due to the impact of
new contracts.
In the Rest of the World, organic revenues grew by 20.6%. with particularly high
growth achieved in Asia and South America.
Euro
Million Q3 2003 Q2 2003 Q1 2003 Q4 2002 Q3 2002 Q2 2002 Q1 2002 Q4 2001 Q3 2001 Q2 2001 Q1 2001
Group
Revenues 2,829 2,936 2,917 3,180 2,805 2,899 2,898 3,013 2,642 2,787 2,776
Earnings 211 299 290 382 222 305 298 363 210 278 277
from
operations
Non-allocated (9) (7) 2 12 8 (10) (5) (41) 4 (22) 87
items
EBITA 202 292 292 394 230 295 293 322 214 256 364
Goodwill (218) (39) (38) (39) (39) (38) (38) (37) (34) (35) (33)
amortisation
Operating (16) 253 254 355 191 257 255 285 180 221 331
Income
(EBIT)
Financial (23) (23) (24) (25) (31) (25) (27) (8) (29) (26) (30)
income and
expenses
Income (49) (84) (87) (115) (60) (81) (85) (104) (56) (70) (105)
taxes
Results (1) (3) (1) (1) (1) (3) (1) 2 (2)
from
affiliates
Minority 1 (2) (2) (3) (3)
interests
Net Income (88) 143 140 212 99 145 143 169 97 123 196
Net profit (14) 3 (5) (28)
on sale of
non-core
business
Net Income (88) 143 140 198 99 145 143 172 97 118 168
from
continuing
operations
Average 475.1 475.1 475.0 475.0 475.0 475.0 475.0 475.0 475.0 478.0 475.3
number of
shares
(mil)
Earnings (18.5) 30.1 29.5 44.6 20.8 30.5 30.1 35.6 20.4 25.9 41.2
per share
(euro
cents)
Net cash 277 74 324 227 214 337 254 256 161 34 322
provided by
operating
activities
Capital (94) (72) (60) (152) (111) (130) (79) (147) (155) (114) (65)
expenditure
on
property,
plant and
equipment
and other
intangible
assets
Disposals 3 14 17 23 19 16 5 21 36 27 7
of
property,
plant and
equipment
and other
intangible
assets
Free cash 186 16 281 98 122 223 180 130 42 (53) 264
flow
Number of 161,079 160,536 150,155 150,365 148,285 143,097 141,463 138,563 139,065 135,539 131,426
employees
Full time 120,387 119,946 114,348 113,444 113,711 112,751 112,261 109,589 111,976 106,782 103,270
equivalent
employees
Euro Million Q3 2003 Q2 2003 Q1 2003 Q4 2002 Q3 2002 Q2 2002 Q1 2002 Q4 2001 Q3 2001 Q2 2001 Q1 2001
Mail
Mail
Netherlands
Revenues 604 663 700 780 634 666 715 801 624 657 688
Growth % -4.7% -0.5% -2.1% -2.6% 1.6% 1.4% 3.9% 3.9% 4.5% 0.0% 1.5%
Organic -3.6% -1.0% -2.1% -2.6% 1.6% 1.4% 3.9% 3.9% 4.5% 0.0% 1.5%
Acquisition -1.1% 0.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Fx 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Addressed mail 1,160 1,297 1,411 1,575 1,201 1,333 1,412 1,618 1,225 1,328 1,393
pieces (mil)
Working days 65 61 64 63 65 61 64 63 65 61 64
Cross Border
Revenues 142 148 157 176 155 157 162 178 157 158 161
Growth % -8.4% -5.7% -3.1% -1.1% -1.3% -0.6% 0.6% 4.1% 1.3% -2.5% -3.0%
Organic -5.8% -1.9% 1.8% 1.1% 0.6% -1.8% -4.5% 2.8% -0.6% -1.4% -4.1%
Acquisition 0.0% 0.0% 0.0% 0.0% 0.0% 3.7% 3.9% -0.6% 3.2% 0.0% 0.0%
Fx -2.6% -3.8% -4.9% -2.2% -1.9% -2.5% 1.2% 1.9% -1.3% -1.1% 1.1%
European Mail
Networks
Revenues 100 105 92 100 85 88 85 96 74 78 57
Growth % 17.6% 19.3% 8.2% 4.2% 14.9% 12.8% 49.1% 45.5% 42.3% 39.3% 3.6%
Organic 14.1% 12.5% 5.9% 8.4% -1.3% 3.2% 16.9% 0.2% 0.2% 8.6% -5.5%
Acquisition 5.9% 9.1% 3.5% -4.2% 16.2% 10.1% 31.8% 45.8% 43.2% 30.7% 9.1%
Fx -2.4% -2.3% -1.2% 0.0% 0.0% -0.5% 0.4% -0.5% -1.2% 0.0% 0.0%
Data & Doc
Management
Revenues 51 51 50 62 44 48 48 48 45 42 32
Growth % 15.9 6.3% 4.2% 29.2% -2.2% 14.3% 50.0% 71.4% 60.7% 23.5% 6.7%
Organic -4.5% 0.1% 6.3% 6.3% -6.6% 1.0% 8.1% 34.6% 14.3% -1.0% 6.7%
Acquisition 22.7% 8.3% 0.0% 25.0% 4.4% 13.3% 41.9% 36.8% 46.4% 24.5% 0.0%
Fx -2.3% -2.1% -2.1% -2.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Total Mail
Revenues 897 967 999 1,118 918 959 1,010 1,123 900 935 938
Growth % -2.3% 0.8% -1.1% -0.4% 2.0% 2.6% 7.7% 8.4% 8.2% 2.9% 1.0%
Organic -2.3% 0.2% -0.4% -0.7% 0.7% 1.0% 3.5% 4.3% 4.0% 0.3% 0.3%
Acquisition 0.8% 1.6% 0.3% 0.7% 1.6% 2.1% 4.0% 3.8% 4.9% 2.8% 0.5%
Fx -0.8% -1.0% -1.0% -0.4% -0.3% -0.5% 0.2% 0.3% -0.7% -0.2% 0.2%
EBITA 163 212 218 247 144 195 218 240 144 189 208
Operating 18.2% 21.9% 21.8% 22.1% 15.7% 20.3% 21.6% 21.4% 16.0% 20.2% 22.2%
margin
Goodwill (28) (10) (7) (9) (6) (8) (7) (6) (4) (5) (4)
amortisation
Operating 135 202 211 238 138 187 211 234 140 184 204
income (EBIT)
Euro Million Q3 2003 Q2 2003 Q1 2003 Q4 2002 Q3 2002 Q2 2002 Q1 2002 Q4 2001 Q3 2001 Q2 2001 Q1 2001
Express
Express
Europe
Revenues 826 847 856 899 822 845 836 825 747 780 783
Growth % 0.5% 0.2% 2.4% 9.0% 10.0% 8.3% 6.8% -2.5% 1.4% 3.2% 5.5%
Organic 3.4% 3.8% 6.3% 8.4% 7.3% 7.7% 2.8% -2.2% 3.5% 4.1% 5.8%
Acquisition 0.1% -0.2% -0.5% 1.8% 2.8% 1.9% 3.0% -0.1% -1.1% -1.3% 0.6%
Fx -3.0% -3.4% -3.4% -1.2% -0.1% -1.3% 1.0% -0.2% -1.0% 0.4% -0.9%
Core 31.0 33.7 33.8 35.2 30.2 33.8 32.9 33.0 28.8 31.6 32.0
consignments
(mil)
Core kilos 519.5 527.3 523.3 566.4 494.3 522.5 519.8 550.2 487.3 505.8 521.8
(mil)
Core revenue 2.8% 4.5% 3.3% 4.3% 2.8% 2.4% 2.0% 2.2% 2.8% 5.7% 7.5%
quality
yield
improvement
Express ROW
Revenues 206 189 181 205 190 195 183 195 192 198 186
Growth % 8.4% -3.1% -1.1% 5.1% -1.0% -1.5% -1.6% -11.8% -13.1% -3.4% -4.6%
Organic 14.7% 10.3% 13.3% 14.9% 7.4% 5.0% -4.8% -7.1% -4.6% 1.2% 1.0%
Acquisition 0.0% 0.0% 0.0% 0.0% 0.5% 0.0% 0.5% 0.1% 0.2% 0.0% 0.0%
Fx -6.3% -13.4% -14.4% -9.8% -8.9% -6.5% 2.7% -4.8% -8.7% -4.6% -5.6%
Total
Express
Revenues 1,032 1,036 1,037 1,104 1,012 1,040 1,019 1,020 939 978 969
Growth % 2.0% -0.4% 1.8% 8.2% 7.8% 6.3% 5.2% -4.4% -2.0% 1.8% 3.4%
Organic 5.6% 5.1% 7.6% 9.4% 7.2% 7.1% 1.4% -3.2% 1.6% 3.4% 4.8%
Acquisition 0.1% -0.2% -0.4% 1.6% 2.4% 1.5% 2.5% -0.1% -0.9% -1.0% 0.5%
Fx -3.7% -5.3% -5.4% -2.8% -1.8% -2.3% 1.3% -1.1% -2.7% -0.6% -1.9%
Working days 65 60 63 62 65 61 62 62 65 60 63
EB1TA 47 66 52 107 37 61 41 69 19 35 34
Operating 4.6% 6.4% 5.0% 9.7% 3.7% 5.9% 4.0% 6.8% 2.0% 3.6% 3.5%
margin
Goodwill (13) (13) (13) (13) (14) (13) (12) (12) (14) (12) (13)
amortisation
Operating 34 53 39 94 23 48 29 57 5 23 21
Income
(EBIT)
Euro Million Q3 2003 Q2 2003 Q1 2003 Q4 2002 Q3 2002 Q2 2002 Q1 2002 Q4 2001 Q3 2001 Q2 2001 Q1 2001
Logistics
Logistics
Europe
Revenues 678 703 657 707 659 651 626
Growth % 2.9% 8.0% 5.0% 19.4% 26.5% 18.8% 32.6%
Organic 5.6% 6.3% 0.5% 3.7% 4.1% 6.0% 19.3%
Acquisition 0.0% 4.3% 7.5% 8.6% 11.3% 4.4% 0.4%
Fx -2.7% -2.6% -3.0% 7.1% 11.1% 8.4% 12.9%
Logistics
North
America
Revenues 154 166 163 168 155 192 190
Growth % -0.6% -13.5% -14.2% -5.6% -11.9% -9.9% -5.0%
Organic -3.7% 11.5% 5.3% 6.2% -3.4% -1.9% -9.5%
Acquisition 0.0% -7.8% 0.0% 0.0% 0.0% 0.0% 0.0%
Fx -10.3% -17.2% -19.5% -11.8% -8.5% -8.0% 4.5%
Logistics
ROW
Revenues 77 75 65 72 68 65 57
Growth % 13.2% 15.4% 14.0% 24.1% 21.4% 6.6% 14.0%
Organic 20.6% 41.5% 54.4% 53.4% 44.6% 18.0% 18.0%
Acquisition 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Fx -7.4% -26.1% -40.4% -29.3% -23.2% -11.4% -4.0%
Total
Logistics
Revenues 909 944 885 947 882 908 873 885 814 878 778
Growth % 3.1% 4.0% 1.4% 7.0% 8.4% 3.4% 12.2% 9.8% 39.4% 72.7% 62.8%
Organic 7.5% 9.9% 5.0% 7.7% 6.1% 0.6% 3.3% 1.9% 6.8% 11.5% 11.2%
Acquisition 0.0% 1.4% 5.4% 4.8% 6.3% 6.9% 7.1% 7.7% 36.2% 61.5% 53.6%
Fx -4.4% -7.3% -9.0% -5.5% -4.0% -4.1% 1.8% 0.2% -3.6% -0.3% -2.0%
Revenues by
sector:
Automotive 345 345 336 347 316 356 361
Tyres 50 43 58 68 58 47 46
FMCG 156 163 151 195 179 150 131
Hi-tech 126 117 119 125 103 109 109
electronics
Publishing / 65 48 56 66 57 57 56
media
Other 167 228 165 146 169 189 170
EB1TA 1 21 20 28 41 49 39 55 46 53 36
Operating 0.1% 2.2% 2.3% 3.0% 4.6% 5.4% 4.5% 6.2% 5.7% 6.0% 4.6%
margin
Goodwill (177) (17) (17) (18) (17) (18) (19) (18) (17) (18) (16)
amortisation
Operating Income(176) 4 3 10 24 31 20 37 29 35 20
(EBIT)
Q3 2003 Q3 2002 YTD 2003 YTD 2002
Euromil Euromil Euromil Euromil
Net sales 2,811 2,777 8,622 8,525
Other operating revenues 18 28 60 77
Total operating revenues 2,829 2,805 8,682 8,602
Cost of materials (119) (133) (390) (382)
Work contracted out and other external expenses (1,218) (1,165) (3,637) (3,559)
Salaries and social security contributions (1,048) (971) (3,093) (2,994)
Depreciation, amortisation and impairments (327) (119) (573) (355)
Other operating expenses (133) (226) (498) (609)
Total operating expenses (2,845) (2,614) (8,191) (7,899)
Operating income (16) 191 491 703
Interest and similar income 5 3 13 24
Interest and similar expenses (28) (34) (83) (107)
Financial income and expenses (23) (31) (70) (83)
Income before income taxes (39) 160 421 620
Income taxes (49) (60) (220) (226)
Results from investments in affiliated companies (1) (1) (5) (4)
Net income before minority interests (89) 99 196 390
Minority Interests 1 0 (1) (3)
Net income (88) 99 195 387
Net income per ordinary share and per ADS (1) (in euro cents) (18.5) 20.8 41.0 81.5
(1)Based on the average amount of 475.1 million ordinary shares, including ADS
(2002: 475.0 million).
Before proposed appropriation of net income
Q3 2003 Q3 2002* YTD 2003 YTD 2002*
Euromil Euromil Euromil Euromil
Net income (88) 99 195 387
Depreciation, amortisation and impairments 327 119 573 355
Changes in working capital:
-inventory 3 (3) 3 (5)
-accounts receivable 162 97 123 244
-other current assets (38) (25) (75) (127)
-trade payables (56) (52) (15) 21
-current liabilities excl.short term financing (19) 14 (61) 12
Changes in provisions 9 12 (4) 25
Changes in pensions (58) (47) (167) (118)
Changes in deferred taxes 35 0 103 11
Net cash provided by operating activities 277 214 675 805
Acquisition of group companies (16) (13) (43) (118)
Disposals of group companies 0 0 6 4
Acquisition of affiliated companies (4) (3) (12) (10)
Disposals of affiliated companies 0 2 1 26
Capital expenditure on other intangibles (8) (18) (19) (18)
Disposals of intangibles (6) 1 3 2
Capital expenditure on property, plant & equipment (86) (93) (207) (302)
Disposals of property, plant and equipment 9 19 31 40
Changes in financial fixed assets 11 9 (8) (3)
Changes in minority interests 6 0 6 2
Net cash used in investing activities (94) (96) (242) (377)
Changes in shareholders' equity (87) (70) (207) (185)
Long-term liabilities acquired 2 20 58 30
Long-term liabilities repaid (10) (18) (44) (69)
Changes in short-term bank debt (15) (62) (76) (363)
Net cash provided by financing activities (110) (130) (269) (587)
Changes in cash and cash equivalents 73 (12) 164 (159)
Cash and cash equivalents at beginning of period 437 292 357 451
Exchange differences on cash items 1 (1) (6) (14)
Cash and cash equivalents from acquisition and disposal of group 0 6 (4) 7
companies
Change in cash and cash equivalents 73 (12) 164 (159)
Cash and cash equivalents at end of period 511 285 511 285
*Reclassifications have been made to increase comparability with current year
presentation of other intangible assets separate from property, plant and
equipment.
Before proposed appropriation of net income
At 30 Sept At 31 Dec
2003 2002
Euromil Euromil
ASSETS
Fixed assets
Goodwill 2,365 2,668
Other intangible assets 93 98
Total intangible assets 2,458 2,766
Land & buildings 983 996
Plant & equipment 482 500
Other property, plant & equipment 497 567
Construction in progress 53 67
Total property, plant and equipment 2,015 2,130
Investments in affiliated companies 98 95
Loans receivable from affiliated companies 1 2
Other loans receivable 131 96
Repayments & accrued income 443 484
Total financial fixed assets 673 677
Total fixed assets 5,146 5,573
Current assets
Inventory 52 56
Accounts receivable 1,826 1,922
Prepayments and accrued income 432 358
Cash and cash equivalents 511 357
Total current assets 2,821 2,693
Total assets 7,967 8,266
LIABILITIES AND GROUP EQUITY
Group equity
Shareholders' equity 2,892 2,961
Minority interests 19 18
Total group equity 2,911 2,979
Provisions
Retirement schemes 25 35
Deferred tax liabilities 129 133
Other provisions 135 126
Total provisions 289 294
Pension liabilities 575 742
Long term liabilities
Long term debt 1,512 1,523
Accrued liabilities 194 138
Total long term liabilities 1,706 1,661
Current liabilities
Trade accounts payable 690 673
State loans 72 72
Other current liabilities 606 702
Accrued current liabilities 1,118 1,143
Total current liabilities 2,486 2,590
Total liabilities and group equity 7,967 8,266
Divisional Summary
Third quarter Euromil Q3 2003 Euromil Euromil Q3 2002 Euromil
EBITA Euromil Operating EBITA Euromil Operating
Goodwill income Goodwill income
amortisation amortisation
Mail 163 (28) 135 144 (6) 138
Express 47 (13) 34 37 (14) 23
Logistics 1 (177) (176) 41 (17) 24
211 (218) (7) 222 (37) 185
Non-allocated (9) 0 (9) 8 (2) 6
items
202 (218) (16) 230 (39) 191
Nine months Euromil YTD2003 Euromil Euromil YTD 2002 Euromil
EBITA Euromil Operating EBITA Euromil Operating
Goodwill income Goodwill income
amortisation amortisation
Mail 593 (45) 548 557 (21) 536
Express 165 (39) 126 139 (39) 100
Logistics 42 (211) (169) 129 (55) 74
800 (295) 505 825 (115) 710
Non-allocated (14) 0 (14) (7) 0 (7)
items
786 (295) 491 818 (115) 703
Capital expenditure on property, plant and equipment and other intangible assets
Q3 2003 Q3 2002 YTD 2003 YTD 2002
Euromil Euromil Euromil Euromil
Mail 22 28 61 79
Express 46 41 105 123
Logistics 24 42 56 118
Corporate 2 0 4 0
Total 94 111 226 320
Movement in shareholders' equity
YTD 2003 YTD 2002
Euromil Euromil
Opening balance at 1 January 2,961 2,600
Net income for the period 195 387
Foreign exchange effects (56) (22)
Cash dividend (208) (185)
Balance at 30 September 2,892 2,780
Net Income
YTD 2003 YTD 2002
Euromil Euromil
Net income under Dutch GAAP 195 387
Adjustments for:
Employment schemes & group reorganisation (10) (9)
Stock based compensation expense (2) 0
Goodwill amortisation 113 113
Goodwill impairment (159) 0
Depreciation on restoration of previously recognised
impairments 3 3
Depreciation of capitalised software 0 (6)
Financial instruments 4 (15)
Long term contract incentive payments 1 0
Pension curtailment gain 0 2
Real estate sale (3) 0
Tax effect of adjustments 51 8
Net Income under US GAAP 193 483
Net income per ordinary share and per ADS 1 (in Euro cents) 40.6 101.7
(1) Based on the average amount of 475.1 million ordinary shares, including ADS
(2002: 475.0 million) Shareholders' Equity
YTD 2003 YTD 2002
Euromil Euromil
Shareholders' equity under Dutch GAAP 2,892 2,780
Adjustments for:
Employment schemes & group reorganisation 142 155
Stock based compensation (3) 0
Goodwill 44 50
Other intangible assets (2) 0
Financial instruments (6) (26)
Real estate sale (19) 0
Sale and leaseback transaction (4) 0
Restoration of previously recognised impairments, net of
depreciation (8) (12)
Long-term contract incentive payment (5) 0
Capitalised software 0 4
Pension curtailment gain 2 2
Deferred taxes on adjustments 15 (46)
Shareholders' equity under US GAAP 3,048 2,907
1. Accounting policies
Accounting policies have remained unchanged in the nine months to 30
September 2003.
2. Restatement of prior year numbers
The prior year numbers of Express and Logistics have been restated for
consistency to reflect the transfer of the In-night business from Express
to Logistics at the beginning of 2003.
Prior year revenues for Mail lines of business have been restated to
reflect a more accurate elimination of internal transactions.
In accordance with the Dutch Council for Annual Reporting directive RJ160 ,
prior year shareholders' equity has been restated to reflect that the
appropriation of results for the year be recorded as a dividend upon
shareholder approval and not upon declaration by management.
3. Increase in pension costs
An additional gross pension cost of Euro37 million (Euro24 million net of tax)
will be charged in the income statement in 2003 compared to the previous
year in respect of defined benefit schemes. As a result of this, net income
excluding pension increase will be separately identified in 2003.
Additional pension costs charged in the income statement compared to the
previous year are as follows:
Q3 YTD
Gross Net Gross Net
(before tax) (after tax) (before tax) (after tax)
Euromil Euromil Euromil Euromil
Pension costs in 2003 11 7 32 20
Pension costs in 2002 (2) (1) (4) (2)
Increase in pension costs 9 6 28 18
4. Composition of the Group
There have been no material changes in the composition of the Group during
the nine months to 30 September 2003.
5. Employees
Total number of employees at 30 September 2003 was 161,079 compared to
150,365 at 31 December 2002.
6. Net debt
At 30 Sept At 31 Dec
2003 2002
Euromil Euromil
Short term debt 191 238
Long term debt 1,512 1,523
Total interest bearing debt 1,703 1,761
Cash and cash equivalents (511) (357)
Net debt 1,192 1,404
Financial Calendar 2004
Thursday 19 February Publication of 2003 full year results
Wednesday 7 April Annual General Meeting of Shareholders
Tuesday 13 April Ex-dividend listing of TPG shares
Wednesday 21 April Payment of final dividend
Monday 26 April Publication of 2004 first quarter results
Monday 2 August Publication of 2004 first half year results
Wednesday 4 August Ex-dividend listing of TPG shares
Wednesday 11 August Payment of interim dividend
Monday 25 October Publication of 2004 third quarter results
Jon Downing
Director of Investor Relations
Contact:
Phone +31 20 500 62 41
Fax +31 20 500 75 15
Email jon.downing@tpg.com
Emilie de Weert
Manager of Investor Relations
Contact:
Phone +31 20 500 62 42
Fax +31 20 500 75 15
Email emilie.de.weert@tpg.com
Tanno Massar
Director of Media Relations
Contact:
Phone +31 20 500 61 71
Fax +31 20 500 75 20
Email tanno.massar@tpg.com
Published by:
TPG N.V.
Neptunusstraat 41-63
2132 JA Hoofddorp
P.O. Box 13000
1100 KG Amsterdam
Phone +31 20 500 60 00
Fax +31 20 500 70 00
Email tpg.communication@tpg.com
Internet www.tpg.com
Responsible for content and editing:
TPG Investor Relations
Forward-looking statements warning - Safe Harbour Statement under the US Private
Securities Litigation Reform Act of 1995
Except for historical statements and discussions, statements contained in this
press release are forward-looking statements. Forward-looking statements
generally can be identified by the use of terms such as "ambition", "may",
"will", "expect", "intend", "anticipate", "believe", "plan", "seek", "estimate",
"continue" or similar terms. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. These forward-looking statements involve known
and unknown risks, uncertainties and other factors, many of which are outside of
our control, that may cause actual results to differ materially from any future
results expressed or implied in the forward-looking statements. These
forward-looking statements are based on current expectations, estimates,
forecasts, projections about the industries in which TPG operates, management's
beliefs and assumptions made by management about future events. In addition to
the assumptions specifically mentioned in this press release, there are a number
of other factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking statements.
These factors include, but are not limited to: substitution of alternative
methods for delivering information for TPG's Mail and Express services;
regulatory developments and changes, including with respect to the levels of
tariffs, the scope of mandatory and reserved services, quality standard,
liberalisation in the Dutch and European postal markets and the outcome of
pending regulatory proceedings; competition in the mail, express and logistics
businesses; decisions of competition authorities regarding proposed joint
ventures or acquisitions; costs of complying with governmental regulations;
general economic conditions, government and regulatory policies and business
conditions in the markets served by us, including adverse effects of terrorist
attacks, anthrax incidents, war or the outbreak of hostilities; higher costs of
insurance coverage for future claims caused by acts of war, terrorism, sabotage,
hijacking or other similar perils; the effect of the current economic downturn
and other risks and trends in the world economy and the timing, speed and
magnitude of any economic recovery; our ability to achieve cost savings and
realise productivity improvements and the success of investments, joint ventures
and alliances; fluctuations in fuel costs; TPG's ability to increase our fuel
surcharge in response to rising fuel prices due to competitive pressures;
changes in currency and interest rates; increased price transparency resulting
from the adoption of the euro; changes in TPG's credit rating and their impact
on TPG's financing costs and requirements; changes in TPG's relationship with
the State of the Netherlands; disruptions at key sites; incidents resulting from
the transport of hazardous materials; mismatches between TPG's investment in
infrastructure (aircraft, depots and trucks) and our actual capacity needs;
strikes, work stoppages and work slowdowns and increases in employee costs;
costs of completing acquisitions or divestitures and integrating newly acquired
businesses; changes to the international conventions regarding the limitation of
liability for the carriage of goods; significant changes in the volumes of
shipments transported through our network, the mix of services purchased by our
customers or the prices we obtain for our services; market acceptance of our new
service and growth initiatives; changes in customer demand patterns; the impact
of technology developments on our operations and on demand for our services;
disruptions to our technology infrastructure, including our computer systems and
Web site; TPG's ability to maintain aviation rights in important international
markets; and adverse weather conditions. These factors and other factors that
could affect these forward-looking statements are described in TPG's annual
report on Form 20-F and TPG's other reports filed with the US Securities and
Exchange Commission. As a result of these and other factors, no assurance can be
given as to TPG's future results and achievements. You are cautioned not to put
undue reliance on these forward-looking statements, which are neither
predictions nor guarantees of future events or circumstances. TPG disclaims any
obligation to publicly update or revise these forward-looking statements,
whether to reflect new information, future events or circumstances or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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