TNT Express issues profit warning
The Dutch mail delivery and logistics services company, TNT Express issued a profit warning on Wednesday, citing difficult trading conditions in Europe. The company doubts it will be able to meet its full-year guidance.
TNT Express announced that since the interim results of July 28th, 2014, trading conditions in Europe have worsened while competitive pressures have intensified.
“This means that it is no longer prudent to maintain our 2015 guidance – which assumed an economic growth rate in Europe of between 2 and 3% – of an adjusted operating margin of 8% for the combined Europe Main and Other Europe and Americas segments,” the company wrote.
On July 16, 2014, TNT Express announced that it had received a Statement of Objections by the French Competition Authorities. The company emphasized that it has cooperated with the probe since it started four years ago.
The company is now entering into a settlement with the French Competition Authorities concerning alleged anti-competitive behavior in the French parcels delivery sector.
“The settlement will include a reduction percentage to the fine, the absolute amount of which the authorities are not expected to determine before the end of 2015. TNT will be making a financial provision of €50 million in the third quarter,” TNT Express wrote.
Tex Gunning, CEO of TNT Express, said regarding the trading update:
“Whilst it is clearly disappointing to see that wider trading conditions within Europe have remained challenging, we are confident that TNT is on the right track to create a sustainable business with good value creation opportunities for its shareholders. The implementation of the Outlook program, which includes ongoing Deliver! savings, has started and is solid, but it will realistically take 3-5 years for the full benefits to come through. We are accelerating our investment programs and cost reduction initiatives. We have the right competencies and experiences in our top team, we have the right network and we have the commitment of 65,000 TNT’ers to make this a success.”