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TNT Express Names Tex Gunning CEO; PostNL Q4 Profit Slides

Dutch package delivery company TNT Express NV (TNTEF.PK,TNTEY.PK), whose $6.77 billion merger offer with United Parcel Service Inc. (UPS) failed recently, Monday said Tex Gunning has been appointed as chief executive, effective June 1.

Separately, PostNL, which holds around 29.8 percent of TNT Express shares, said it plans to monetize its stake in TNT Express over the medium term. The firm reported a small drop in fourth-quarter profit.

TNT Express said that until June 1, Bernard Bot and Jeroen Seyger will continue in their interim positions of CEO and CFO, respectively. The CEO post became vacant after Marie-Christine Lombard resigned in September 2012 to pursue a career outside TNT Express.

Tex Gunning, 62, is a member of AkzoNobel's Board of Management and Executive Committee until April 26, responsible for Decorative Paints business since 2009.

During this tenure, Gunning played a crucial role in the integration of ICI's paints activities, leading to substantial synergy savings. He also oversaw the turnaround of Decorative Paints in North America, restructured the European activities and grew the business significantly in other markets.

Gunning is also a member of TNT Express' Supervisory Board, which he will relinquish with immediate effect.

Prior to AkzoNobel, he was the CEO of Vedior, which he merged with Randstad in 2008. Gunning has spent more than 25 years with Unilever.

Antony Burgmans, Chairman of the Supervisory Board, said, "Tex's extensive business experience and track record in successfully turning around businesses and delivering results make him the ideal candidate in this critical time for the company."

The stock rose 0.5 percent in Amsterdam on Friday to settle at 5.56 euros.

Meanwhile, PostNL, which holds around 29.8 percent of TNT Express shares, said profit attributable to equity holders of the parent in the fourth quarter declined to 154 million euros from 160 million euros last year. Pre-tax profit increased to 193 million euros from 184 million euros.

Net sales for the quarter rose to 1.198 billion euros from 1.166 billion euros in the prior year. Revenues grew 2.6 percent to 1.201 billion.

Revenue from Mail in the Netherlands fell 5.3 percent, amid a 9.1 percent drop in addressed mail volumes.

Parcels revenue climbed 25.3 percent to 208 million euros, mainly due to the acquisition of trans-o-flex and the shift of registered mail from Mail in the Netherlands to Parcels.

Excluding currency impact, International revenues advanced 9.7 percent with the U.K. And Italy seeing nearly 21 percent increase.

Annual profit attributable to equity holders of the parent plunged to 677 million euros from 1.736 billion euros. Net sales grew to 4.317 billion euros from 4.283 billion euros.

In 2013, the firm plans to restart the roll out of the operational restructuring and implement additional measures, which will increase its cost savings target to 400 million euros from 330 euros. Of this 110 million euros was achieved in 2011 and 2012, leaving a target of 290 million euros for 2013 to 2017.

The firm reaffirmed its 2015 underlying cash operating income outlook of 300 million euros to 370 million euros. At current parameters, mainly interest rates and the value of stake in TNT Express, the company expects returning to cash dividend in 2016.

Expected addressed mail volume decline is 8 percent to 10 percent, compared to 9 percent in 2012. The company decided to increase prices in order to balance the volume decline.

PostNL will propose the distribution of a dividend of 0.181 euros per ordinary share for 2012, which has been fully paid in shares as an interim dividend. The firm will not pass through the 0.03 euros dividend per ordinary share of TNT Express over 2012. Accordingly, the final dividend will be nil.

The firm noted that dividends received from TNT Express would not be passed through to PostNL shareholders until cash dividend is restored.

Further, PostNL said it expects to monetize its stake in TNT Express over the medium term to create better value for shareholders, after stability returns to that company.

The stock dropped 2.1 percent on Friday to close at 1.85 euros.

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by RTT Staff Writer

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