The new slimmed down TNT Group has released its first annual set of results showing a 7.8% increase in revenues and an 11.1% increase in profits. The drivers of these improved results are strong growth in Express combined with release from the losses of the now sold logistics activities.

Express has grown strongly over the year with revenue being 12.1% higher, this accelerating slightly in the fourth quarter. Profit margins are also strong at an annual margin of 9.6%, up from 8.9% last year and increasing to 10.7% in the usually strong fourth quarter. TNT describes growth in this sector as largely organic but augmented by some acquisitions in Spain and India. Underlying organic growth was described as 11.4% (although this figure is inflated by favourable currency effects) with international business particularly strong. Express Europe is TNT's most important region and it has continued to show strong growth both in demand for road and airfreight services. TNT suggests that consignment weight and asset utilisation are both increasing.

Mail is also growing, but profit margins slipped. The 'European Mail Network' is the most dynamic part of the business with international business growing by 27.5%. Here TNT Mail is grabbing market share from incumbents in Germany as well as the UK. In contrast its domestic Dutch business shrunk by 1.9%. Profit margins were lower due to one-off costs but are still very high at 17.4%. Overall revenue growth was 2.8%.

The poorest figures in these results came from TNT 'discontinued operations'. Overall the company lost €157m, representing losses from both the logistics business at the beginning of the year and the write-off of TNT's investment in Global Automotive Logistics. However TNT has not booked the profits from its sale of its freight forwarding business and is benefiting from tax credits against these losses, although these will show-up in next year's figures.

Overall these are a strong set of figures from a business that has recovered its poise after several difficult years. However it is clear that whatever the merits of the Mail business, TNT must continue to accelerate the growth of the Express business and in particular look to make major advances in areas outside Europe. TNT Express is growing well but its three big rivals are also growing and investing broadly across markets.