Financial strategy
All of TNT’s financial strategies and actions will take into account the key components of its financial solidity requirements as mentioned.
TNT’s financial strategy is based on three pillars:
- driving business performance by using value-based performance measures and standardisation of business processes,
- maintaining the right financial flexibility to support growth platforms via capital expenditure and mergers and acquisitions, and
- keeping the capital structure efficient, at an investment grade long term credit rating of “around BBB+”.
These three key components of the financial strategy directly relate to:
- effective risk management, internal control and compliance,
- financial risk management and risk insurance structures,
- aligned legal and funding structures, and
- a balance in short and medium term shareholder returns through profitable growth, dividends and incidental share repurchases or other shareholder returns from medium term excess cash.
TNT’s current capital structure is based on and managed along the following components:
- maintaining a credit rating at investment grade “around BBB+”,
- availability of at least €500 million of undrawn committed facilities,
- structural funding via a combination of public and bank debt, with a risk-weighted mix of fixed and floating interest,
- cash pooling systems facilitating optimised cash requirements for the group by facilitating centralised funding and surplus cash concentration at group level, and
- a tax optimal internal and external funding focused at optimising the cost of capital for the group, within long term sustainable boundaries.