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Swiss Post achieves encouraging result in difficult environment

Communication dated 25.08.2015

In the first half of 2015, Swiss Post generated normalized Group profit of 391 million francs (previous year: 370 million francs). At 504 million francs, normalized operating profit (EBIT) was up slightly year-on-year (previous year: 472 million francs). This increase is principally due to solid income on the financial and investment markets despite the ongoing low interest rate situation, as well as to good cost management.

In the first six months of 2015, Swiss Post achieved Group profit normalized to take account of one-off items of 391 million francs, which represents an increase of 21 million francs (previous year: 370 million francs). At 504 million francs, normalized operating profit (EBIT) is 32 million francs up on the previous year’s figure (472 million francs). The improved result is principally due to solid income on the financial and investment markets, which offset lower interest income, as well as to good cost management. Operating income remained stable at 4,100 million francs. This represents a decline of 1 percent from the previous year’s figure (4,142 million francs).

Markets make varying contributions to operating profit

The financial services market’s normalized contribution to the result proved higher than in the first half of the previous year, whereas the contributions from the other markets declined. In the communication market, Swiss Post recorded a normalized operating profit (EBIT) of 137 million francs (previous year: 154 million francs). The decline in income at PostMail and Post Offices & Sales caused by lower volumes could not be offset, despite a reduction in expenses in all the units within this market. The decline in volumes of addressed letters decreased to 0.7 percent year-on-year. The volume of unaddressed items fell by 1.1 percent. Swiss Post Solutions’ result remained stable.

In the logistics market, Swiss Post recorded a normalized operating profit (EBIT) of 65 million francs, virtually on a par with the previous year’s level (66 million francs). Declines in sales in small consignment transport and warehousing, combined with lower income in the fuel business, were almost fully offset by higher parcel volumes and optimization of operating expenses. Parcel volumes increased by 2.2 percent year-on-year.

In the passenger transport market, Swiss Post recorded a normalized operating profit (EBIT) of 19 million francs (previous year: 25 million francs). A decline in revenue in Liechtenstein and the translation effect – the conversion of accounts managed in foreign currencies into the Group’s reporting currency – could not be fully offset by additional services in Switzerland. Operating expenses increased slightly year-on-year. The number of kilometres covered by PostBus increased by 0.9 percent.

Lower interest income at PostFinance

PostFinance, which operates in the financial services market, achieved a normalized operating profit (EBIT) of 280 million francs, which represents an increase of 50 million francs year-on-year. Net interest income before impairment was down year-on-year due to low, and partly even negative, interest rates. Portfolio reversals of impairment on financial assets of 30 million francs had an equivalent positive effect on the result (previous year: portfolio impairment charges of 24 million francs). Transaction volumes on the foreign exchange markets rose sharply following the abandoning of the minimum euro exchange rate, resulting in a 39 million franc increase in net trading income. Normalized staff costs rose by 12 million francs year-on-year due to increased employee benefit expenses.

Group profit affected by one-off items

In the first half of 2015, Swiss Post’s financial result includes one-off items with a total net value of 14 million francs in terms of Group profit. The non-consideration (normalization) of the three one-off items allows comparison with the previous year and provides an accurate representation of the current operating business performance.

Challenges on the markets increase

Swiss Post expects the challenges resulting from the markets and technological change to grow. It is meeting these challenges by following a strategy of long-term, gradual growth, by further optimizing costs in a socially responsible manner and by pursuing market-driven pricing policies. Swiss Post depends on increases in profitability in all its markets and on solid profits.
Swiss Post expects to meet the financial goals of its owner again in 2015.

Group key figures

Key figures Unit First half 2015 First half 2014 Year 2014
Operating income CHF m 4,100 4,142[3] 8,457
Operating profit (EBIT)[1] CHF m 504[2] 472 803
As a % of operating income (EBIT return) % 12.3 11.4 9.5
Group profit CHF m 391[2] 370 638
Total assets CHF m 121,662 125,347 124,671
Equity CHF m 5,277 5,316 5,010
Cash flow from investing activities CHF m -404 -542 -369
Headcount at Swiss Post Group FTEs[4] 44,018 44,715 44,681
1  The operating profit corresponds to the result before non-operating financial income and taxes (EBIT).
2  Normalized figure
3  The figure has been adjusted (see Notes to the Group interim financial statements, Accounting changes).
4  FTEs = Full-time equivalents. Average expressed in terms of full-time equivalents, excluding trainees.

PostFinance Ltd key figures

Key figures Unit[1] First half 2015 First half 2014 Year 2014
Number of customers Thousands 2,946 2,908 2,938
Number of customer accounts Thousands 4,810 4,682 4,752
Inflow of new money CHF m -4,433 923 2,839
Customer assets CHF m 113,115 114,999 117,186
Customer assets in partner solutions CHF m 7,614 6,708 7,125
Mortgages[2] CHF m 4,904 4,555 4,713
Loans to business customers (taken up) CHF m 8,742 7,342 8,165
E-finance users Thousands 1,657 1,582 1,624
Headcount FTEs[3] 3,528 3,410 3,454
Transactions processed Millions, cumulative 499 486 996
1  At end of period (unless otherwise stated)
2  In cooperation with partner banks
3  FTEs = Full-time equivalents. Average expressed in terms of full-time equivalents. Headcount at PostFinance parent company

Selected key figures per segment (Group units)

30 June 2015 Group units Operating income (CHF m)[1] Operating profit (CHF m)[1],[2],[7]
Communication market - 2,465 137
Communication market PostMail 1,389 184
Communication market Swiss Post Solutions 300 6
Communication market Post Offices & Sales 776 -53
Logistics market PostLogistics 757 65
Financial services market PostFinance[3] 1,114 280
Passenger transport market Postbus[3] 416 19
Other[5] - 465 3
30 June 2014 Group units Operating income (CHF m)[1] Operating profit (CHF m)[1],[2]
Communication market - 2,567 154
Communication market PostMail 1,441 197
Communication market Swiss Post Solutions 324 6
Communication market Post Offices & Sales 802 -49
Logistics market PostLogistics 765 66
Financial services market PostFinance[3] 1,091[6] 230
Passenger transport market Postbus[4] 418 25
Other[5] - 435 -3
1  Operating income and operating profit by segment are reported before management, licence fee and net cost compensation.
2  Operating profit corresponds to earnings before net non-operating financial income/expenses and taxes (EBIT).
3  PostFinance Ltd also applies the ARB accounting rules for banks (Accounting rules for banks, securities dealers, financial groups and conglomerates – ARB). There are differences between the ARB and the IFRS results.
4  In the field of regional public transport, PostBus Switzerland Ltd is subject to the DETEC ordinance on the accounting of licensed businesses (RKV). There are differences between the RKV and the IFRS results.
5  Includes service units (Real Estate and Information Technology) and management units (e.g. Human Resources, Finance and Communication).
6  The figure has been adjusted (see Notes to the Group interim financial statements, Accounting changes).
7  Normalized figures