TNT N.V. is one of four leading worldwide mail and express delivery companies with a 9% market share of the big four companies and a turnover of continuing business of 10.105 million in 2005 and profit after interest and taxes of 772 million. TNT N.V. decided in 2005 to dispose of its logistics division which accounted in 2005 for additional 3.542 million and a loss of 111 million. TNT N.V.'s profit, liquidity and efficiency are stable and around industry average but still leave room for improvement. TNT N.V. financial gearing is low compared to its competitors. The company could make better use of long-term debt opportunities. TNT N.V. developed strongly on the stock market in 2005 and outperformed its competitors in terms of share price increase. TNT N.V. is strong on dividends but lacks strength in some areas of stock price performance ratios as earnings per share. TNT N.V.'s annual report 2005 is strong on adoption of IFRS, outlining of business held for sale and management remuneration but could be improved on clarity and detail in other areas than those mentioned. Table of Contents
Table of Contents3
2 The Company5
3 The Literature Search6
4 The Data and its Analysis7
4.4 Financial gearing9
4.5 Investment ratios and stock market performance10
4.6 The position of TNT compared to its peer competitors11
About TNT's company report 200513
5 Conclusion and Recommendations15
A Dutch company, determined to conquer the world. As if they inherited the trading spirit of their V.O.C. ancestors in the Golden Century. Is that a fair view? That is what this report investigates. Is TNT a financially healthy company? Is TNT following the right strategy? Is TNT successful in the delivery service market? And is TNT worth investing in?
TNT N.V. (TNT) provides businesses and consumers worldwide with an extensive range of services for their mail and express delivery needs. The company has evolved from being a postal company in the Netherlands into an international group. TNT serves more than 200 countries and currently employs around 147,000 people. Over 2006, TNT reported 10,1 billion in revenues and an operating income of 1.276 million. TNT is publicly listed on the stock exchange of New York and Amsterdam (TNT N.V., 2007). This report is based on the 2005 Annual Reports of TNT and its main competitors, Deutsche Post World Net (DPWN), Federal Express (FedEx) and United Parcel Service (UPS). While finishing this report the 2006 Annual Reports of TNT and FedEx became available but could not anymore be considered. To answer the questions mentioned above a financial analysis is critical. An analysis of the most common ratios was undertaken, which can be found in chapter four. Conclusions and recommendations are pointed out in chapter five. But first the activities of the company are outlined in chapter 2 and are followed by an explanation of the literature search in chapter 3.
2 The Company
As mentioned earlier, TNT provides businesses and consumers worldwide with extensive mail and express delivery services. The company operates in a mail division and an express division. TNT also had a third pillar, logistics, but felt declining profit margins' and had problems keeping the segments cost under control. TNT therefore decided in 2005 to sell its contract logistics operations during 2006. The segment accounted for 26% of net sales (3.542 Mio.) in 2005.
TNT's mail division is segmented into four parts: Mail Netherlands, Cross-border Mail, European Mail Networks and Data and Document Management (Reuters.com, 2007).
The TNT express division is organized in two segments: express and freight management. The express...