TNT still a work in progress as 2014 sees losses

Things are still tough for TNT. Although the company says that the “building blocks are in place” for its new strategy, the past year has been painful as revenue and profits both shrank.

For the full year 2014, revenue fell by 3.2% to €6.68bn whilst there was an operating loss of €86m. However the picture is complicated by the sale of the China Domestic Express and TNT Fashion businesses, meaning that on a like-for-like basis sales grew by just over 1%. However once write-offs and other impairments are accounted for TNT made a loss for the year of €190m. Cash-flow halved.

The performance of the different business units appeared to vary more in terms of geography than the type of business. At the core ‘International Europe’ revenue grew at an underlying 1%, however TNT found conditions difficult in the UK and France. Overall volumes were marginally down but yield on each consignment was higher by 3.7%.

For ‘International Africa, Middle East and Asia’ things were even more complicated. On the surface revenues fell by 14% for the year but this disguised the effects of the sale of the Chinese Hoau business. Stripping this out resulted in growth of 9%.

The tough ‘Domestic’ business also saw a rise in underlying revenue of 3.2% and yield on consignments also edged-up. But things are still difficult in the competitive markets of France and the UK, despite TNT commenting that they are penetrating the small and medium sized business segment of the market.

Overall the picture at TNT is opaque at present, with numerous big events inserting volatility into the numbers and making it difficult to assess what is really going on. Tex Gunning, TNT’s CEO commented that he expected the company to make a profit in 2015, however he declined to forecast the size of this profit. This illustrates that the success of Gunning’s turn-around of TNT is still uncertain.