Major management restructuring in the face of declining revenues at the UK International division of TNT Express has also seen ‘a handful’ of top executives made redundant, Motortransport.co.uk has learnt.

The news comes as the Dutch-owned delivery company, which is set to be acquired by larger US rival FedEx for around £3bn, reported its global results for Q2 2015.

It revealed underlying revenue growth of 4.1% and a narrower net loss compared to the same time last year.

The company declined to disclose figures for its UK division, which are included in its overall domestic and international division figures.

However a spokesman told Motortranport.co.uk performance in the UK had been mixed.

He said that whilst TNT Express’s UK Domestic division had performed strongly under country manager Marianne Culver, who joined TNT UK in February, its UK International division had delivered disappointing results.

“We are not satisfied with the revenue performance there. There are leadership issues,” said the spokesman.

He added that  continuing poor service levels at its UK international division had prompted it to instigate management changes, which will see the appointment of a new UK country manager and the removal of a ‘handful’ of top executives.

The company declined to identify the new country manager until the management restructuring is completed over the next few weeks.

The TNT spokesman also declined to identify the roles that have been affected, adding: “The changes are very recent and there could be more changes in management coming.”

The company’s restructuring of its IT functions will also see further redundancies in the UK division. TNT Express plans to outsource many of its IT functions, which will see 500 of its 1300 IT roles cut.

UK domestic business

In contrast TNT Express’ UK Domestic business has performed well, the spokesman said. He added: “UK Domestic improved revenue in Q2 with volumes also improved, compared to Q2 2014. This is the first time we have seen these improvements in sometime.”

He attributed the revenue rise to improved service quality and ‘particularly good’ revenue growth in business from SMEs in the UK. “That is true across our (global) Domestic division but particularly so in our UK Domestic division,” he added.

He pointed to investments in TNT’s UK fleet, infrastructure and automation, as well as the opening of a new, state-of-the-art  warehouse in Swindon, ahead of schedule this month, as contributing to the UK Domestic division’s improved performance.

Turnaround continuing

Speaking today, TNT Express CEO Tex Gunning said the company was continuing its turnaround. The group results revealed a net loss of €1m (£0.71m) in the second quarter, compared with a €2m net loss in the same period a year earlier.

A fall in the value of the euro in the period helped boost revenue, which rose to €1.76bn in Q2, up 6.2% from €1.66bn a year earlier. Underlying revenue growth was 4.1%, net of fuel surcharges and disposals.

The company said the rise was driven by the continued growth of revenues from small and medium enterprises or SMEs.

IT transition and Outlook project costs of €15m, plus costs to introduce new services and facilities, as well as pricing pressures, had a downward pressure on profitability.

TNT warned that 2015 would continue to be a challenging year, marked by restructuring costs ahead of the planned takeover by FedEx, and major investments in logistics facilities around the world.

"TNT's turnaround is progressing well under our Outlook strategy. Service levels and customer satisfaction scores further improved. We are achieving good growth in the SME customer segment after years of decline," Gunning said.

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