bpost improved operating profits by 18% in the final quarter of 2014 and achieved a double-digitfull-year increase thanks to strong parcel growth but is warning of diverse headwinds this
year.The Belgian postal group reported a 2.2% rise in revenues to €655 million in Q4, 2014, andimproved EBIT by 18.4% to €102.8 million. The operating profit margin went up to 15.7% from 13.5%in the final quarter of 2013.
In 2014 as a whole, revenues were 1.5% higher at €2.46 billion. Operating profits increased by10% to €480 million, and the already high 18% profit margin rose to 19.5%. The full-year net profitwas 8% higher at €295 million.
Key growth drivers in the fourth quarter were the parcels business and a lower than expected3.7% volume decline in mail, according to company management. Domestic mail revenues were 1.2%lower at €409 million in the final quarter, and declined by 1.8% to €1.52 billion in the year as awhole.
Domestic parcels volume grew by 7.1% in the final quarter thanks to a particularly strongChristmas peak season, including a 15.6% volume rise in December. This was driven by continueddevelopment of the Belgian e-commerce market, especially in fashion.
However, domestic parcels revenue increased by only 4.9% to €41 million in Q4 due to changes inthe customer mix, with a higher number of large customers who attract bigger discounts, and weakerC2C sales. In the year as a whole, bpost’s domestic parcels business increased volumes by 7% andrevenues were 6.7% higher at €151 million.
The international parcels business, now operating under the Landmark Global brand, increasedrevenues by 33% to €46 million in the final quarter, largely due to consolidation of severalacquisitions and higher volumes on US and Asia trade lanes. Full-year revenues increased by 48% to€143 million.
CEO Koen Van Gerven commented: “In the last quarter of the year bpost reported very strongresults which were helped by a lower than expected decline of mail volumes. Our parcels activitiescontinued to grow solidly, especially during the holiday season, beating the already strong growthof 2013. Our productivity plans delivered better than expected and strengthened the company to faceits future challenges.
Looking ahead to this year, however, he warned: “In 2015, we will face some major challenges.Mail volumes will be under substantial pressure and the compensation bpost receives from theBelgian state will be reduced. We will more than ever need to seize growth opportunities based onour unique assets, our proximity to customers through our 10,000 postmen and 1,300 postal servicepoints. We will also continue to improve productivity and efficiency to have bpost fully responsiveto the evolving expectations of our customers.”
bpost is forecasting a 5% decline in mail volumes this year, following a soft start to the year.In addition, Brussels will reduce its payment for the management contract by €16.5 million.
In the parcels sector, the lucrative business of shipping baby milk powder to China is no longergrowing and could decline in future, according to the company. More positively, however, bpostexpects domestic parcel volumes to increase by a mid-single-digit rate this year and its US andAsia parcels business should achieve overall growth.
