TALLINK GRUPP AS The Most Competitive Transportation and Logistics Enterprise 2009 Photo: Toomas Tuul ANDRES HUNT Master course of optimising When talking to any manager of the company, they tend to remember not the previous, but still relatively stable year, but this what is going on now. This is actually right, as the business often requires the looking into the future with analysing the present. This is also the case with the Estonian largest ship company. Andres Hunt, the member of the management board of Tallink, tells that they think about different variants and plans regarding the future. What is exactly undertaken at the falling market is not sure but one thing is clear: changing of the world economy, decrease in volume of goods transport, increase in the number of passengers on the background of falling sales – this is the big challenge for the company’s management. TALLINK GRUPP AS 2008: Sales (th EEK) 12,310,015 Change in sales 103.4 % Net profit (th EEK) 317,976 Change in net profit 30.3 % Number of employees 6,564 Investments (th EEK) 4,240,289 Return on equity 3.1 % 68
In July this year Tallink sets the record – more than million people travelled with the company ships, no one has seen so high number. At the same time, in the conditions of decreasing competition and income of people, the company had to decrease the ticket prices, the large number of passengers do not always mean higher sums for the company. Last year was quite a good year for Tallink. “Last year it was especially pleasant that two new ships were introduced in the line at a time: “Superstar“ in spring and “Baltic Princess“ in summer and this brought along several changes, “Princess“ came to the line of Tallinn-Helsinki and “Galaxy“ went to the line of Turu-Stockholm, from there “Silja Festival“ went to the line of Riga-Stockholm. When looking back, this was the right moment for such exchanges and we ourselves would have liked to do it earlier. The ship plant could not manage with its questions as expected. It was a right decision, as the numbers of passengers increased and the investment was needed,“ Hunt thinks. The company’s management was not satisfied with the last year’s financial numbers. The profitability fell, the sales increased by only 3% and the number of passengers slightly increased. The growth in profitability was in its turn cancelled by the abrupt increase in fuel price. Tallink has also surely made its activities more effective. As the fuel prices though raised too high, effectiveness resulted in no benefit. The share of goods transport fell by about 30%, but the ship has to serve also the remaining shipments and the expenses for the company are still the same. Andres Hunt thinks that the client of passenger ships requires further on more training and being used to it that the travelling by ship is also the method for spending leisure time besides travelling from one point to another. “We are not only pure transport company, we have all other services, consumptions on board which cover the expenses. If we take the income structure, the percentage of the ticket is 20%, the consumption makes a half and the percentage of goods shipments was also about 20%. The hotels of Tallink and other services to be provided still add there,” Hunt says. The economic periods are connected with each other always in business. Thus Tallink has the possibility to be satisfied in the current difficult time that the big investments have been made and the possibilities for providing better quality as to the tender have been guaranteed. The client gets these possibilities today with also cheaper price than before. Hunt states that the client’s expectations are different and currently one’s finances are viewed with more attentive glance than before. “We can’t confront the rest of the world, but go with the flow. You should be attractive and aggressive. We can’t exclude that bigger changes should be made. If the line has high loss, then it needs to be closed. There are different variants and we have played these scenarios through and now one should watch what the future brings. We should also negotiate with the partners and apply for the more favourable attitude, make alternative purchases, all that provides another way of thinking and cooperation between the partners. If one has to survive together, the plans should be made together,” one of the managers of Tallink is sure. The major activity of Tallink is now the review of the saving possibilities – on account of which it is possible to save, on account of which one could earn more. The extra money of 1 euro means millions of euros for the company. Andres Hunt says that this same difficult time offers him a lot of motivation. There are different possibilities and the choice of possibilities and the success is a big challenge. He provides one simple sample of optimising. When the bottom of the ship was before cleaned for example once a year, then now this is done more often, as the bottom of the ship will be full of algae and so the ship moves slower and also takes more fuel. Small matters bring along major changes, but with one exception: nothing should visibly become worse for the client. “We were able to implement the investment programme at the good times, we find it easier to go on from here. If we had used the old ships further on, then I do not know whether we could have been able to remain in the competition. In the big picture everything is still well. We know that this situation is not influenced by us, but from outside. We are sure that our strategy has been successful, we have not detected mistakes there. At the same time one should very seriously think at the state’s level on that Estonia would not lose attractiveness and this is greatly influenced by the state’s coping with economy,“ Hunt adds to sum up. • Transportation and Logistics Enterprises Place Müügitulu Müügitulu Puhaskasum Puhaskasumi Omakapitali Tööjõukulud ühe Tootlikkus ühe Investeeringud % Ettevõte muutus muutus tootlikkus töötaja kohta töötaja kohta esimesest *konsolideeritud tuh kr koht % koht tuh kr koht % koht % koht kr/kuus koht tuh kr koht tuh kr koht (0...100) 1 TALLINK GRUPP AS* 12,310,015 1 103.4 6 317,976 2 30.3 12 3.1 12 32,549 4 1,875 6 4,240,289 1 100.0% 2 ASPERAAMUS OÜ 58,717 10 85.8 11 3,966 10 329.5 1 91.7 1 12,847 12 8,388 2 341 11 78.8% 3 TALLINNA SADAM AS* 1,168,968 2 100.6 7 416,644 1 124.1 4 9.0 9 29,573 5 2,352 4 560,000 2 69.3% 4 LENNULIIKLUSTEENINDUSE AS 244,472 4 105.9 5 72,322 4 87.9 7 30.3 5 50,118 1 1,798 7 53,326 4 61.5% 5 LAJOS AS* 108,008 7 118.2 2 6,221 8 246.5 2 38.6 2 18,371 11 1,964 5 20,772 6 58.1% 6 SPACECOM AS* 449,013 3 74.4 12 149,005 3 109.7 6 25.2 6 34,804 3 6,803 3 4,488 8 55.5% 7 DPD EESTI AS 121,561 6 124.1 1 4,691 9 87.3 9 31.0 4 25,669 7 1,764 9 3,399 9 49.8% 8 TESA LOGISTICS OÜ 63,203 9 86.4 10 3,737 11 56.8 10 31.1 3 20,865 8 9,029 1 5,071 7 46.7% 9 ESTEVE TERMINAL AS 145,179 5 109.8 4 10,945 6 87.9 8 23.4 7 25,690 6 925 10 47,557 5 38.7% 10 SAARTE LIINID AS 53,588 11 111.1 3 10,024 7 121.2 5 6.5 10 20,401 9 670 12 127,935 3 33.4% 11 NTN EST AS 4,820 12 99.8 8 184 12 217.3 3 4.1 11 19,704 10 689 11 12 33.2% 12 TNT EXPRESS WORLDWIDE EESTI AS 101,522 8 86.4 9 22,451 5 50.2 11 9.6 8 37,296 2 1,781 8 1,452 10 30.6% www.konkurents.ee 1 EUR = 15.6466 EEK; 1 EEK = 0.0639 EUR; based on 2008 data 69
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