* Cost savings of 220 mln euros targeted by 2015
* Restructuring charge of 150 mln euros over 3 years
* Focus on stand-alone company after failed UPS takeover
* Shares virtually flat in higher market
By Anthony Deutsch
AMSTERDAM, March 25 Dutch package delivery firm
TNT Express said on Monday it will cut 4,000 jobs and
focus on Europe after a failed $7 billion takeover by United
TNT Express, facing overcapacity and rapidly eroding prices
in Europe, had focused on a strategy in which UPS would help it
cope with difficult markets. It will now have to face the future
The cuts, which equate to 6 percent of its workforce, are
aimed at saving 220 million euros ($286 million) by 2015, and
will result in a restructuring charge of 150 million euros, it
Roughly two-thirds of the job cuts will be in Europe, where
economic conditions are tough and TNT Express generates the bulk
of sales, said interim chief executive Bernard Bot. About 4.6
billion, or 63 percent, of 7.3 billion euros in 2012 revenue
came from Europe, the Middle East and Africa.
If the restructuring is successful, TNT Express will have an
adjusted operating income margin of around 8 percent and sales
growth of roughly 2 percent by 2015, it said.
That forecast assumes a return to a normal economic climate
in crisis-hit Europe, Bot said, where markets remain highly
"The business we have is the business we have, in terms of
its geographic scope, and that's where we are going to focus,
improve, and try to get the best possible margins," Bot told
"But yes, we also have to accept that we are a cyclical
stock and are to some extent dependent on the economic
Bot, who will soon be replaced by Tex Gunning and will
return to his job of chief financial officer, said TNT Express's
management is focused on moving ahead as an independent company
after the unsuccessful bid by UPS.
UPS's bid for TNT Express was blocked by the European Union
Commission in January due to concerns it would have too dominant
a market position. TNT Express said it did not expect offers
from other rivals and is not a break-up target.
TNT Express, which had already announced a 15 percent
reduction in European capacity, said on Monday it is "exploring
options" to reduce its exposure to intercontinental capacity,
including sharing agreements, subleases and lease terminations.
Five major aircraft could be dropped, Bot said. "If we can
take out the aircraft in an attractive deal we will do so," Bot
said. The company has 45 planes in its European network.
TNT Express in February announced plans to sell domestic
units in Brazil and China. The job cuts announced on Monday do
not include those planned disposals.
The sales process for domestic China is under way and
preparations have begun for the sale in Brazil. The company
provided no other detains.
"It would have been nice to see progress on the sales," said
Rabobank analyst Philip Scholte.
"They are counting on a recovery in Europe, but that's a
pretty big condition. Continued margin erosion means they have
to make profit in other ways and that meant job cuts were
The firm's shares were virtually flat in Amsterdam trading,
lagging the broader market.
Analyst Andre Mulder at Kepler & Cheuvreux said in a trading
note he was disappointed TNT had not provided details about the
disposals in Brazil and China, noting the U.S. business did not
generate a margin, while the China business only made a small