Posti Group Q1'26 flash comment: More subdued earnings development than expected

Source: Inderes

Translation: Original published in Finnish on 4/29/2026 at 9:40 am EEST.

Posti's top-line development was in line with our expectations, but earnings weakened in all of the company's main segments. The guidance was kept unchanged, which the weak Q1 result puts pressure on. According to our preliminary assessment, there is at least slight downward pressure on our forecasts, but we would first like to hear the company's more detailed steps regarding the impact of the renewal program on earnings development for the current year. Posti's English earnings call can be followed here starting at 11:00 am EET.

Top-line development was in line with our expectations

Posti's Q1 revenue decreased by one percent to 353 MEUR, matching our forecast of 354 MEUR. eCommerce and Delivery Services revenue increased by 3%, driven by volume growth. Volumes grew particularly strongly in consumer-to-consumer (C2C) parcels. Volumes in the cyclical sub-segments of freight and B2B parcels continued to decline due to the general economic slowdown. In Warehousing and Logistics Services, revenue also increased (2%), driven by both operating countries. Here, we believe the company had won new customers, which contributed to the revenue increase. The volume decline in Postal Services (24%) continued to be steeper than our expectations (15%), but successful price increases kept the revenue decline relatively moderate (8%). The digital transition of official communications drove a steeper volume decline in Postal Services compared to historical trends (around 3%).

Comparable earnings fell short of both expectations and the comparison period

Posti's adjusted EBIT for Q1 weakened significantly to 6.5 MEUR (Q1'25: 10.5 MEUR), corresponding to a profitability of ~2%. The absolute earnings landed well below our estimate (7.4 MEUR). Reported EBIT (9.2 MEUR) was boosted by sales gains from the divestment of investment properties (12 MEUR). Adjusted earnings declined in all of the company's service segments, which we view negatively given the increased volume in growing businesses. The negative earnings trend in eCommerce and Delivery Services was driven by a weakened sales mix, as revenue growth is currently weighted towards lower-margin C2C parcels. However, the company is taking measures to address the issue, which we hope will at least neutralize the situation. In Warehousing and Logistics Services, weaker earnings development compared to the comparison period was driven by decreased utilization rates due to the loss of a single large customer. We estimate the customer was Kesko, as it transferred part of K-Rauta's logistics to in-house management. We expected the results of the aforementioned segments to have increased in Q1. In Postal Services, the company's earnings declined, but the decrease was smaller than we expected, which we attribute to successful price increases. Due to weaker-than-expected operational development and higher income taxes, Q1 adjusted EPS (around EUR -0.03) was clearly lower than in the comparison period (EUR 0.13), and also fell short of our forecast (EUR 0.06).

Reiterated guidance calls for measures to reverse the earnings trend

Posti reiterated its guidance for 2026, which indicates revenue of 1,400–1,500 MEUR (2025: 1,448 MEUR) and an adjusted EBIT of 63–79 MEUR (2025: 69 MEUR). The repetition of the guidance was expected, at least in line with our expectations, but the sluggish Q1 performance puts some pressure on the full-year earnings development. In practice, the guidance requires development for the rest of the year to be roughly in line with the comparison period (with a margin of -2 MEUR to the lower end), considering the actual development in Q1. It was positive that the drop in Postal Services' earnings was limited relative to the decline in volume, and we consider the weaker earnings development in other businesses to be partly temporary or rectifiable. However, this requires that Posti's operating environment does not materially weaken during the current year. However, there are drivers for weaker market development; for example, the ripple effects of a prolonged situation in the Middle East could be factors that would reduce overall economic activity. This would thus also negatively affect the development of the transport and logistics sector. We are monitoring the situation closely, but so far, its impact on Posti's development has been minor, in our view. According to our preliminary assessment, our forecasts are subject to at least slight downward pressure, but we are keen to hear more detailed steps from the company regarding the impact of the reform program on earnings development for the current year.