“So far, TNT sees no evidence of a major slow down 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,” said the company report.
Among fourth-quarter highlights, TNT and its trades unions extended the present TNT Collective Labor Agreement, its Asia Road Network expanded into China, and TNT applied for Authorized Economic Operator status—the first express integrator to apply for new EU customs security standard.
Peter Bakker, CEO of TNT noted, “2007 has been a good year for the group.” Acquisitions in emerging markets performed according to plan, he pointed out, and the company was able to expand its market share in Europe.
Among key announcements TNT made earlier was its decision to exit its UK parcel business.TNT took a fourth-quarter charge of € 138 million ($203 million). The charge included a € 110 million provision in relation to new master plans for the effect of various efficiency initiatives in the Netherlands which aims at annual cost reductions of € 85 million by 2010 vs. 2007. The € 85 million is part of the € 370 million savings for the period from 2007 to 2015. A € 28 million charge was for an onerous UK Parcel contract, including a € 5 million impairment of various related assets, said the company.
Looking ahead, TNT said its outlook is for Express to grow revenue by a “high single digit” in international and domestic and provide a low double-digit operating margin. Express Emerging Platforms are expected to deliver organic revenue growth in the “high teens” with a low single-digit operating margin.