Strong growth in banking earnings and higher logistics and international profits helped SwissPost to limit its overall profit decline last year and compensate for a sharp fall in the domestic
mail business.The postal operator saw its net profit drop by 12% to CHF 728 million (€510 million) in 2009.The operating profit declined 11.2% to CHF 721 million (€505 million), and the operating profitmargin fell from 9% to 8.3%. Revenues fell by 3% to CHF 8.7 billion (€6.1 billion).
However, Swiss Post described the group profit of CHF 728 million as “a good result” in view ofthe economic crisis, confirming its efficiency and competitiveness. The main reasons for the lowerprofit are the drop in earnings, which can be attributed to the absence of the one-time earningsfrom real estate in the previous year, the price reductions and the absorption of VAT for lettersas of 1 July 2009, as well as to the economic crisis and other factors. Due to increased wageexpenses and depreciation, the expenditure could not be reduced to the same extent. The excellentresult achieved by PostFinance, lower impairments and the savings due to the new letter centrespartially compensated for the drop in profit, the postal operator stated.
PostMail reported a decline in revenues to CHF 2,808 million (€1,967 million) from the previousyear’s CHF 2,916 million figure, which is mainly due to the price reductions and absorption of VATintroduced on 1 July 2009, and the reduction in the volume of addressed letters by 4.7%. Thedecline in volumes is largely due to the economic crisis and substitution by electronic means ofcommunication. On the other hand, the commissioning of the new letter centres and the adjustment ofdelivery capacities in line with the decline in volumes resulted in considerable savings. All inall, this resulted in an operating result of CHF 198 million (€139 million), which was just CHF 51million lower than the previous year.
With stable parcels business, PostLogistics was able to limit the decline in revenues in courierand express services through acquisitions, and generated revenues of CHF 1,488 million (€1,042million) compared to the previous year’s CHF 1,516 million. Thanks to simultaneous cost reductions,the operating profit increased slightly to CHF 45 million (€31.5 million), up from CHF 39 millionin 2008.
Swiss Post International was able to retain its operating income at CHF 1,028 million (€720million), just 0.6% lower than the 2008 figure of CHF 1,034 million despite lower internationalmail volumes from Switzerland. It improved profit to CHF 53 million (€37 million) from the previousyear’s CHF 36 million due to a reduction in expenditure.
SPI said that a significant decline in volume in wholesale for the group subsidiaries in the USand the UK were partially outweighed by the good results achieved in other overseas subsidiaries. “In the downturn year of 2009, we were able to retain the sales level and now anticipate annualgrowth of 2%-4%,” commented Daniel Bättig, Head of International Mail. “This will be helped byacquisitions such as that made on 1 February 2010 in Spain.” At the start of 2010, Swiss PostInternational acquired two long term sales partners in Madrid ahead of full deregulation of theSpanish postal market next year.
In Scandinavia, Swiss Post International acquired Danish letter post provider Swiss PostInternational Denmark ApS on 1 July 2009, and merged it to become Swiss Post InternationalScandinavia. This new subsidiary is the foundation of future growth in Finland and Norway, with itsbranches in Stockholm, Malmo and Copenhagen. In Italy, Swiss Post International secured itsposition in the Italian logistics market in August 2009 with the takeover of Italian logisticscompany Costanzia, a specialist in logistics services in the B2B segment which will take over thewhole logistics operation. In the UK, Swiss Post International has merged two operating sites toimprove quality and productivity.
Looking ahead, Bättig said: “We are aiming for greater penetration of existing markets infuture. Industry sales, reseller models and acquisitions will complement our investment portfolioand contribute to further growth.” Swiss Post International is currently the world number threeamong the national postal companies in the international letter business.
Swiss Post Solutions, which like SPI mainly operates abroad, was able to hold its operatingincome at almost the same level as the previous year at CHF 696 million (€487 million) despite theeconomic difficulties. However, the unfavourable economic cycle and additional expenditure relatedto growth and restructuring resulted in a negative operating result of CHF -25 million (€17.5million) compared to the previous year’s CHF 9 million profit.
PostFinance increased its result to a record of CHF 441 million (€309 million) from CHF 229million in 2008, despite a slightly lower income of CHF 2,160 million (€1,513 million).
For this year, the hesitant recovery of the economy, the decline in volumes of addressedletters, the drop in earnings resulting from the consensual arrangement with the price supervisor(minus CHF 200 million a year) and the increasing competition will continue to define Swiss Post’senvironment. Swiss Post again expects a somewhat lower result for 2010.
In the coming years, it will also have to contribute to the financing of the pension fund, aimfor an equity level in line with the industry, finance its investments from its own funds andprovide the Confederation with an appropriate share of the profit. To do so, it needsindustry-standard results in all Group units. The Board of Directors is proposing to the FederalCouncil to use CHF 250 million of the current profit to finance the pension fund and to distributeCHF 200 million to the public purse as a share of the profit.
