Group consolidated results
| Year ended at 31 December | |||
| Consolidated group results | 2007 | variance % | 2006 |
| Total operating revenues | 11,017 | 9.5 | 10,060 |
| Other income | 75 | 15.4 | 65 |
| Total operating expenses | (9,900) | (11.9) | (8,849) |
| Total operating income | 1,192 | (6.6) | 1,276 |
| as % of total operating revenues | 10.8 | 12.7 | |
| Net financial expense | (94) | 100.0 | (47) |
| Income taxes | (316) | 20.0 | (395) |
| Results from investments in associates | 1 | 116.7 | (6) |
| Profit for the period from continuing operations | 783 | (5.4) | 828 |
| Profit/(loss) from discontinued operations | 206 | 231.2 | (157) |
| Profit for the period | 989 | 47.4 | 671 |
| Attributable to: | |||
| Minority interests | 3 | 200.0 | 1 |
| Equity holders of the parent | 986 | 47.2 | 670 |
| Earnings per ordinary share (in cents) 1 | 257.4 | 61.6 | 159.3 |
| Earnings per diluted ordinary share (in cents) 2 | 256.1 | 62.0 | 158.1 |
|
|||
In 2007, TNT had total operating revenues of €11,017 million (2006: 10,060). TNT’s express division accounted for 59.5% (2006: 57.2%) of TNT’s group operating revenues and 50.3% (2006: 43.9%) of TNT’s group operating income. TNT’s mail division accounted for 38.4% (2006: 40.4%) of TNT’s group operating revenues and 52.5% (2006: 59.6%) of TNT’s group operating income.
Total operating revenues increased by 9.5% in 2007 compared to 2006. Operating income decreased by 6.6%, mainly due to restructuring costs of €110 million for the efficiency projects that TNT’s Mail division intends to start in 2008 to standardise the collection, preparation, and delivery of mail as much as possible.
Net assets and financial position group
| 2007 | variance % | 2006 | |
| Balance sheets | |||
| Non-current assets | 4,823 | 12.8 | 4,277 |
| Current assets | 2,252 | 6.1 | 2,122 |
| Assets held for sale | 10 | (97.6) | 409 |
| Total assets | 7,085 | 4.1 | 6,808 |
| Equity | 1,951 | (2.8) | 2,008 |
| Non-current liabilities | 2,232 | 5.7 | 2,112 |
| Current liabilities | 2,902 | 14.2 | 2,542 |
| Liabilities related to assets classified as held for sale | 146 | ||
| Total liabilities and equity | 7,085 | 4.1 | 6,808 |
| Net return on equity 1 (%) | 50.5 | 33.4 | |
| Equity as % of total liabilities and equity | 27.5 | 29.5 | |
| Cash flow statements continuing operations | |||
| Net cash from operating activities | 643 | (25.0) | 857 |
| Net cash used in investing activities | (8) | (100.7) | 1,068 |
| Net cash used in financing activities | (635) | 70.5 | (2,152) |
| Changes in cash and cash equivalents | 0 | 100.0 | (227) |
| Cash flow statements discontinued operations | |||
| Net cash from operating activities | (19) | 69.8 | (63) |
| Net cash used in investing activities | 4 | 113.3 | (30) |
| Net cash used in financing activities | 16 | (55.6) | 36 |
| Changes in cash and cash equivalents | 1 | 101.8 | (57) |
|
|||
Performance valuation and outlook 2007 Business and financial performance over the year 2007 has been in line with the outlook as provided for the group. Taking into account the impact of the special item of €110 million provision for Master Plans in Mail, TNT shows an underlying performance on record levels in its operation, with profit from continuing operations increasing to €865 million.
The proposal to increase dividend per share over 2007 with 16.4% reflects the confidence of the Board in the strengths of TNT’s performance. The increase results from an increased pay-out of approximately 36.7% (2006: 35.1%) of normalised net income and a lower amount of eligible shares due to share buy-back programmes realised. The proposed dividend over 2007 of €316 million is an increase of 8.2% compared to 2006.
Outlook 2008
The outlook for 2008 is structured to enable specific insight in the development of TNT’s established businesses and emerging platforms.
Express is expected to show a high single digit organic revenue growth in International & Domestic, with a low double digit operating margin. The Express Emerging Platforms are expected to deliver organic revenue growth in the high teens, with a low single digit operating margin.
Mail is expected to show a low single digit organic revenue increase overall, with an operating margin around 16.5%. Emerging Mail & Parcels (excluding EMN Germany), as part of Mail, is expected to achieve a low double digit organic revenue increase, with a high mid single digit operating margin.
So far, TNT sees no evidence of a major slowdown in its business, which primarily is focused on European markets. TNT is, however, aware of the risks arising from a possible recession in the United States. TNT is strongly positioned to respond as appropriate and is confident about its performance for 2008.
The overall Mail outlook includes expectations and assumptions on revenue development and operating margins for EMN Germany on an ongoing basis, which, due to the current legal and business environment, are more uncertain than usual.
The overall Mail margin outlook excludes possible further restructuring charges in the context of Master plans in the Netherlands and decisions on the future of EMN Germany.
TNT expects non allocated costs to stay at around € 35 million for the year.
TNT’s outlook is based on constant 2007 exchange rates.