Nova Poshta is the largest private operator of postal services in Ukraine and one of the most dynamic and fast-growing companies in the country in general.
From a university dormitory ...
The history of Nova Poshta (NP) is one of the most interesting in Ukraine. Two friends from the university dormitory create an express delivery company with a start-up capital of $7,000, and twenty years later it processes more than 200 million parcels a year and generates revenues of almost UAH 20 billion.
Vyacheslav Klimov and Vladimir Popereshnyuk shared a room in the dormitory of the Kharkov Aviation Institute for five years. In 2001 this friendship developed into a business partnership. New company rented three offices - in Poltava, Kiev and Kharkov, and began to carry out express delivery of parcels between these cities. The company employed 8 people, including the founders, and the vehicle fleet consisted of two cars.
Several years were spent on initial rollout, trials and errors. The first large clients appeared in 2005-2006, and in the following years, active development began.
The first important event for NP was cooperation with one of the largest mobile phones and accessories chain in Ukraine at that time - Mobilochka. In 2004 Popereshnyuk and Klimov began studying at the International Institute of Business, where they met the marketing director of the Mobilochka chain. As a result, this company has become the largest client of Nova Poshta.
... Up to a billion turnover
NP entered the 2008 crisis as a relatively small, but already fast-growing company with a turnover of UAH 40-50 million and practically no debt burden. In fact, at that time there was still nothing to lose, and financial crisis was viewed by the owners of the company as an opportunity to improve efficiency and further growth.
The business began to generate good profits, which were reinvested in the opening of new branches. Following the growth of the network, the number of sent parcels increased, and the turnover grew exponentially, having doubled for several years in a row. In 2009, NP delivered 1.9 million parcels (having 80 branches), in 2010 - more than 4 million (140 branches).
During the same time, Nova Poshta has been actively establishing relations with the growing segment of e-commerce and became a key partner for many online stores, in particular, in 2010, cooperation with another fast-growing company, Rozetka.ua, began.
In October 2012, the number of Nova Poshta branches exceeded 1000, and its revenue, continuing to double annually, in 2013 exceeded UAH 1 billion. On July 19, 2013, the opening of the first high-tech distribution terminal of the company took place in Lviv.
Due to the hostilities in Donbas in 2014-2015, Nova Poshta lost about 15-20% of its branches, however, since these branches were rented, this loss practically did not affect the further development of the company. During this period, the NP elaborated a new logo, as well as other elements defining its identity. The group enters the international delivery market; representative offices were also opened in Georgia and Moldova.
By the end of 2015, the company's network, which covers almost 1000 settlements in Ukraine, consists of more than 2200 branches and 1400 parcel terminals. In 2015, NP transported about 100 million shipments and generated revenue of about $ 100 million.
Steady growth
On its official website, the management and founders of the company define 2016-2020 as a time of sustainable growth. It is difficult to argue with this - Nova Poshta is already the undisputed market leader, its financial standing is excellent, revenue and profits are growing (in 2016, revenue amounted to UAH 5.4 billion, which is twice as much as in 2015), and its debt burden remains low. In their communication with the press in 2018, the owners of the company noted that for them the year is considered as unsuccessful if the revenue increased by less than 50%.
The company began to actively come into small towns and villages, as a result, in 2019 the number of Nova Poshta branches doubled and exceeded 6,000. The franchise scheme was actively used for expansion - NP has more than 700 partners in all regions of the country.
In parallel with the opening of new branches, the company strengthened its logistics base. A milestone event - in March 2018, Nova Poshta launched the Kyiv Innovation Terminal (KIT), the capacity of which made it possible to serve more than 350 thousand parcels per day. The volume of investments amounted to about 15 million euros. Furthermore, in 2019, a similar hub was opened in Khmelnytsky, in which 9 million euros were invested.
To finance this development, in addition to reinvesting profits, Nova Poshta began to use new sources of funding. So, for the construction of the terminal in Khmelnytsky, an EBRD loan was attracted, and in 2019 the first issuance of the company's bonds in amount of UAH 300 million was carried out. The underwriter of the issue was Raiffeisen Bank Aval, the buyers were mainly banks and insurance companies. The maturity was just over a year and the interest rate was 22%. Also Nova Poshta attracted partners for the construction of terminals, signing long-term lease agreements with them.
Present day
The active expansion of Novaya Poshta on the market resulted in the continued improvement of operating and financial performance of the company. In 2019, the number of shipments increased by 22% compared to last year and amounted to 212 million units, revenue (incl. VAT) increased by 28% - from UAH 12.6 billion to UAH 16 billion, EBITDA amounted to UAH 1.7 billion, net profit - about UAH 800 million (source - the company's annual financial report).
In 2020, the general situation with Covid in the country (and in the world) was extremely favorable for Nova Poshta. The branches continued to work under any quarantine restrictions, the share of online sales of goods in Ukraine as a whole increased, as did the number of shipments of goods (+ 32% in the 1st half of 2020 compared to the same period of the last year). Nova Poshta became one of the companies that only benefited from the quarantine.
According to the financial report of Nova Poshta, its revenue (including VAT) for 2020 increased by 25% compared to 2019 and reached UAH 20.3 billion. Net sales in 2020 amounted to UAH 16.9 billion, EBITDA - UAH 2.5 billion, net profit - about UAH 1 billion. The company's total debt at the end of the year was UAH 1.7 billion.
Today Nova Poshta is an absolute leader in express delivery services in Ukraine with more than 8,000 branches (as of 31.12.20). Having achieved economies of scale, the company has significantly increased the threshold for entering the market and further development for any competitor. But whether Nova Poshta will be able to maintain a high level of quality of its services - only time will answer this question.
Key Financials
Nova Poshta is not a public company, however, its unconsolidated financial statements for 2020 are publicly available, main takeaways are presented in the following table:
UAH mln
2018
2019
2020
Turnover (VAT incl)
12 620
16 140
20 284
Net revenues
10 516
13 453
16 903
EBITDA
625
1 700
2 469
EBITDA margin, %
5.9%
12.6%
14.6%
Net Profit
452
783
991
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