GLS saw operating profits drop in the year ending March 31, 2009, as volumes were impacted by therecession and customers switched to cheaper standard parcels from premium express items. But it
continued to invest in its European network.The Royal Mail subsidiary announced today that its revenues increased by 2.4% to €1.8 billionand the number of parcels shipped rose 5% to 350 million in 2008/9, but EBIT fell by 7.5% to €149million. The GLS results were partly released within the Royal Mail results last month but inBritish pound terms.
The results include the positive trading conditions in the first six months. In the secondhalf of the year, the results were impacted by the global economic crisis, with prices as well asvolumes coming under considerable pressure, the company pointed out in a statement.
“Volumes as well as turnover and profits were lower than our expectations,” admitted CEO RicoBack. “Considering the particularly difficult economic environment, the overall result isnevertheless satisfactory. As a logistics provider that services almost all sectors, GLS is notimmune from the crisis. The results, however, demonstrate the strength and resilience of GLS’European road-based network.”
The impact on GLS’ core business of standard parcels was less than on other logisticssegments such as freight and express. “During times of crisis, companies increasingly send smallshipments instead of larger volumes,” Back explained. “In addition, many companies also prefer touse more lower-priced standard products instead of Premium Services. GLS’ strong road-basedEuropean parcel network is perfectly suited for gaining additional volumes from this trend.”
Last year, the GLS Group invested €66 million in capital expenditure to further strengthenits networks’ quality, structure and coverage. “In times of crisis, competition becomes moreintense and only companies that offer their customers high quality and competitive services will besuccessful in the long run,” Back added.
The objective of GLS is to maintain its high service quality and invest in the future despitethe economic crisis and decreasing parcel volumes. “In the past months, we have adjusted ourcapacities to match parcel volumes,” Back disclosed. “However, we will also continue to invest inthe quality and strength of the GLS network. GLS has a broad and diversified customer base and isdebt-free.”
