The management team remains focused on executing TNT’s three to five-year turnaround and transformation strategy Outlook, as presented at the company’s Capital Markets Day on 18 February.
During the third quarter, TNT made progress in implementing Outlook and continued to achieve underlying revenue growth. Customer satisfaction increased further, fuelled by service improvements and new services.
However, the economic volatility in Brazil, China and Australia weighed on TNT’s performance in these parts of the world. In its Domestics segment, TNT faced competitive pressures in Australia, compounded by the drop in commodity markets, and the ongoing costs of modernising the company’s Australian infrastructure. The Domestics segment’s performance was also affected by substantially lower margins in TNT’s French operations.
TNT is on track to investing about €300 million in its transport and IT infrastructure in 2015, in line with guidance. The main infrastructure investments will be completed by the end of 2016. Investments in productivity enhancement and automation have not yet contributed to the bottom line, as it takes time for such investments to deliver cost benefits.
In view of these factors as well as Outlook-related transition costs, TNT anticipates that third quarter adjusted operating income will be materially lower than in the same period of last year.
As stated in February, 2015 is a challenging year of transition for TNT. TNT expects to achieve year on year improvements from 2016 onwards and to realise the full benefits of Outlook from 2018-2019.
TNT will elaborate on its third quarter performance on 26 October 2015.
