TNT Express feels pressure in Europe

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The €200 million termination fee from UPS provided a welcome boost for TNT Express in the first quarter pushing operating income to €231m. That compares with €54m in the first quarter last year.

Sales were down 4.5 per cent to €1.67 billion. However, the group said that year-on-year performance comparisons were distorted by negative working day impact.

In Europe and MEA consignment volumes grew but yields declined in the challenging trading conditions.

Interim chief executive Bernard Bot said:

‘The implementation of our profit improvement plan Deliver! is now underway. The initiatives to improve our margins, lower our cost base and reduce our exposure to loss-making activities have all been launched. We have also taken important steps in reorganising the company.

“We reiterate our view that trading conditions in 2013 will continue to be challenging, especially in Europe. This underscores the need to optimise our market position and improve our productivity.

“We expect to start seeing a positive impact from Deliver! in the second half of the year.

The management team and I look forward to Tex Gunning starting as CEO on 1 June 2013.”

TNT agreed the sales of its domestic business in China last month and is now working on the sale of the domestic business in Brazil.

It has also started work on the reorganisation of its business units and optimisation of its operating model which it expects to produce improvements totalling €220m.

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