Chillin' out till it needs to be funded
The surface logistics business ( only of parcel deliveries) got murky back in 2005 when Mr Brown came over with the latest technology in difference and deals were signed with Global franchises including the $100 bln Amazon.com.
The current EUR 5 bln bid for TNT at a 80% premium over the closing price in Europe while prices on the ADR/ADS have already caught up on the big board to $12.57 in anticipation of a new bid.
TNT was under some duress last year but it knows for sure that Fedex cannot be far behind for a brand name like it has and its distribution strengths in India, China and Brazil. TNT is part of the Big 4 of the industry and focusses on Europe and other global destinations. TNT split in 2010 /11 with Internal Express Delivery now easily available as a block while the Dutch Post business is not interesting for either Fedex or UPS
Mr Brown’s UPS grew 8% in 2011 revenues to $53.5 bln and has no debt to speak of, while Gross Profit before Interest
Tax and Depreciation is 50% at $25.5 bln and a bottomline of $3.8 bln. Its $44 bln Package divisions have $33 bln 2011 revenue in the US but $12 bln Internationa shipments as well. In US Domestic, specifically, the company pointed to its winning alliances with ECommerce companies and growth of margin to 14.9% up 200 points this quarter.
TNT Express revenues for the last 12 months till September 2011 were EUR 7 bln or $9.1 bln but profits were close to 0, with $ 14 mln in the September quarter compared to UPS $4.35 earnings for the full
UPS has almost $10 bln revenues from Freight including Healthcare logistics for which it had also purchased Italian Peiffe last year as Europe opens up as an opportunity for US industries trying to make a mark including banks
Fedex compares with $40 bln in revenues annually ( $39 bln for May 2011, 12 mo) has half the market cap and cash flows compare with UPS at $4 bln but UPS seems to have been growing its Cash for some time now
DHL, part of Deustche Post, is expected to contribute more than 50% of the group profit at E1.3 bln in 2011 out of a total of E2.4 bln o f the EUR 17 bln Deutsche Post with EUR 52-53 bln in revenues expected for 2011 at the run rate of Q3’s 13 bln. Revenue break up for the package business is not immediately available.