Swiss Post’s net profit dropped 5 per cent to CHF 859 million last year due to lower mail volumesand higher costs and despite growth for its parcels and financial services businesses.
The group, which will become a limited company this year, warned that the current year wouldalso be tough due to difficult market conditions and stressed it will press ahead with growthinitiatives and cost savings.
In 2012, Swiss Post’s revenue declined fractionally by 0.2 per cent to CHF 8,582 million.Operating profits dropped by 2 per cent to CHF 890 million and the profit margin fell back slightlyto 10.4 per cent from the previous year’s 10.6 per cent.
Swiss Post described the results as good given the “challenging economic climate”. Increasedrevenues from the parcel business and transport services, and savings as a result of continuedincreases in productivity could not fully offset the negative effects of higher staff costs andlower earnings, it explained.
In the communication market, Swiss Post with its three Group units (PostMail, Swiss PostSolutions, Post Offices & Sales) generated an overall operating result of CHF 61 million, downby 45 per cent from the previous year’s figure of CHF 111 million. The decline was primarily due tohigher employee benefit expenses.
Volume trends varied from market to market. While the decrease of -1.8 per cent in addressedletters remained in line with the previous year, the number of unaddressed items increased by 51per cent due to the complete takeover of the DMC Group.
The PostMail unit’s revenues declined 1.2 per cent to CHF 3,103 million but operatingprofits slumped by nearly a third to CHF 178 million. The decrease was primarily due to a sharpincrease in employee benefit expenses.
With operating income virtually unchanged at CHF 547 million francs, Swiss Post Solutionsmade an operating profit of CHF 3 million, down from the previous year’s CHF 11 million.Restructuring costs in a number of units and declining project revenues from Global Servicesweighed heavily on the result.
The Post Offices & Sales unit reduced its operating loss to CHF 120 million from theprevious year’s CHF 151 million, with revenues slightly lower at CHF 1,689 million. The significantimprovement was essentially due to successful cost management, which produced major savings thatmore than compensated for declining revenues and increased staff costs. The downward trend inletters mailed and payments by private customers continued in 2012. Sales of non-postal brand-nameitems continued to perform positively and made an important contribution to the utilisation andfinancing of the postal network.
In the logistics market, PostLogistics saw operating profits decline by 6.2 per cent to CHF152 million although revenues grew 2 per cent to CHF 1,535 million. The volume of parcelstransported increased by 4.1 per cent, mainly due to the increase in online business and thepartial regaining of import parcel processing from Germany. However, higher employee benefitexpenses and increased costs for IT and a range of comprehensive restructuring measures led to theoverall decline in profits.
Post Finance increased its operating profit to CHF 627 million francs on revenues of CHF2,362 million. The growth in customer deposits continued unabated, with the average volume managedby PostFinance exceeding the 100 billion mark for the first time in 2012.
In the public passenger transport market, PostBus increased operating income to CHF 778million francs, primarily as a result of a further expansion of services. The operating resultamounted to CHF 6 million but due to changes in the internal settlement of accounts between theunit and the group, this was not comparable with the previous year.
Looking ahead to this year, Swiss Post highlighted its forthcoming conversion into a publiclimited company (Ltd) on 26 June 2013, retroactively to 1 January 2013. In the futureorganisational form, the three subsidiaries, Post CH Ltd, PostFinance Ltd and PostBus SwitzerlandLtd will operate under the umbrella of the parent company Swiss Post Ltd.
In the course of the year, PostFinance will also be issued with a banking licence and becomesubject to regulation by the Swiss Financial Market Supervisory Authority FINMA. Operationally, thefinancial institution will continue to be managed by its own board, but the board will now reportto a Board of Directors of PostFinance Ltd nominated by the Swiss Post Board of Directors.
“As a public limited company, Swiss Post’s goal will be to continue to provide its customerswith first-class services in all four markets. The company expects the challenges resulting fromthe markets and technological change to become tougher. Swiss Post Ltd will face these challengesby continuing to develop its core business to meet the needs of customers, exploiting identifiedgrowth options, further optimising its costs and pursuing a market-driven pricing policy,” itstated.
