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President and CEO’s review

The weakened market and the historic transformation of the postal industry made 2013 challenging for Itella. Our net sales grew slightly, but our result weakened compared to 2012.

The highlight business of the year was OpusCapita, which offers financial management outsourcing services. The company recorded a strong result after a difficult 2012. OpusCapita is a prime example of the significance of determined operational development.

Itella Logistics continued to make a loss. We carried out a large number of measures to change the direction of the development. Warehouse logistics in Russia recorded a positive result.

Considering the transformation of the postal industry, the relative profitability of Itella Mail Communications remained fairly satisfactory. In terms of operations and sales, we had a strong Christmas season. Consequently, the fourth quarter was the strongest quarter of the year, as it has been in previous years. Ensuring a relatively strong performance and balance sheet were our key goals in a situation where mail volume development in the near future is uncertain.

More customer-focused operations

At the end of October, we published our new vision and strategic goals for up until the year 2020. Our operations will be more customer-focused than previously. The new vision and strategy were prepared in response to the international transformation of the postal industry, the most extensive one in its history. The economic recession and the strong increase in digital communications threaten to reduce the volumes of traditional letter and publication distribution by 50% by 2020. Our main focus will shift from letter, publication and advertisement delivery to the management of e-commerce parcel flows, warehousing and goods delivery. Instead of expansion, we are investing in our core operations.

Our primary goal for the coming years is to ensure a sustainable foundation for profitable operations in order to secure funding for our services that fall under the universal service obligation in accordance with the Finnish Postal Act and make necessary investments in growth areas.

Our main markets are Finland and Russia

We are seeking additional growth and profitability in the Russian market and in e-commerce. To accelerate growth in e-commerce, we established the eCommerce unit in the summer. The new unit serves to ensure that we offer an effective range of services for e-commerce companies and meet our goals for growth. In the future, Russia will be our main market, alongside Finland. Our Russian strategy also benefits Finnish export companies, as the expanding logistics network enables increased exports. To support our strategy, we organized our Russian business operations into a separate business group at the beginning of 2014, and we will reinforce its resources.

Feedback indicates that our customers value flexibility and a diverse range of products and services. We want to be even closer to the consumers. During 2013, we increased the number of Posti’s service points by more than 200. By 2020, we will increase their number to 1,700.

Clearer structure for OpusCapita

As part of our strategy, Itella Information changed its name to OpusCapita at the beginning of November. OpusCapita offers financial management and cash flow automation and outsourcing services, aiming for strong growth and a stronger market position in Europe.

We also had to make difficult decisions in 2013. The year was particularly challenging for our employees. In April, we announced a new performance improvement program for 2013–2014 to ensure our competitiveness and profitability. The program aims at EUR 100 million in cost savings, and 59% of that has already been achieved. As part of the program, we have sold Itella Bank, outsourced part of our ICT operations, downsized our administration and improved the efficiency of our sourcing, among other measures. In addition, we had to launch cooperation negotiations, which resulted in a reduction of 637 person-years.

The best workplace

Despite the transformation and changes, we want to be the best workplace in the industry. Occupational safety is also very important to us and improving it was determined to be one of our most important areas of development. We are training our employees in response to the changing workforce needs, and we help them with finding a new job, if necessary. At the beginning of 2014, we launched the Uusi polku (New Path) program for our employees. In addition to financial support, the program offers training and support for job seeking, retraining or starting a business. Through the program, we want to support employees in securing employment during the transformation of the postal industry.

I would like to take this opportunity to thank our personnel, customers and partners for their excellent cooperation during the year. Trusting in the future, we want to continue to offer the best customer experience.

Heikki Malinen
President and CEO




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