France’s La Poste has unveiled a dramatic slump in profits and revenues for 2008 along withdeclining mail volumes due to the tremendous impact of the economic crisis, according to the
company’s CEO Jean-Paul Bailly.The French postal group experienced a double-digit drop of 32% in its operating profit whichdeclined to €886 million last year (-22% on a like-for-like basis). This represented an operatingprofit margin of only 4.3%, down two percentage points. The net profit decreased even moredramatically by 44% (-30% on a like-for-like basis) to €529 million.
Turnover remained stable, increasing fractionally 0.2% to €20.8 billion with an organicgrowth of 1.8% ((on a like-for-like basis).
In the express and parcels sector, La Poste increased revenues by 7.1% to €4.7 billion,thanks to the positive development of Chronopost in France, a further expansion of businessactivities in Eastern Europe and good domestic growth in the UK and Germany. The separate Frenchdomestic parcels business ColiPoste increased revenues by 6.1%, boosted by the growing e-commerce.
However, mail revenues decreased by 1.8% to €11.3 billion along with a 3% drop in volumes.Volumes for January/February 2009 showed a further 5% decline over 2008 caused by increasingelectronic communication replacing letters and economic recession impacting on direct marketingprogrammes. Revenues from financial services went up 1.3% to €4.77 billion, making it La Poste’ssecond largest business.
“We were strongly impacted by the intensity of the economic crisis,” said La Poste CEOJean-Paul Bailly. “Nevertheless, our unique model in Europe based on diversified sectors andchannels along with the plan of voluntary economy implemented since 1 September 2008, give us goodfinancial resistance,” he added.
The company has invested a total of €1.38 billion in the development of its businessactivities. Of this, €163 million was designed for external growth primarily focusing on thediversification of mail activities, in particular document management as well as expanding itsinternational mail business through acquisitions in the UK, Portugal and Spain.
From the remaining €1.19 billion, the internal investment comprises the implementation of theGroup’s modernisation programme in all sectors, with 9 state-of-the art mail depots currentlyoperating and 18 others due to be opened in 2009 along with 521 post offices renovated in2008. This brings the total number of offices renovated since 2006 to 2500.
In 2009, the first two months reflected an even stronger drawback in business activity thanexpected mainly impacting the mail and parcels volumes of the company.
In this difficult context, the Group said it will expand its operational measures to maintainits operating profit margin with two programmes planned in 2009. The first one is targeted atreducing operational expenses while the second one focuses on the optimisation of the Group’s cashflow.
La Poste added that it is concentrating on the development of its four sectors while theircomplementarity will help the company to better endure the crisis while further improving theservice quality for customers.
