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Quarterly result reflects challenges facing Swiss Post
Communication dated 28.05.2019
Swiss Post generated a lower result in the first quarter of 2019 than in the prior-year period. At 130 million francs, Group profit was down 17 million francs year-on-year. At 172 million francs, operating profit (EBIT) was also 35 million lower than in the previous year. This decline was due to a drop in revenue in the core business in addition to persistently low interest income at PostFinance.
The challenges facing Swiss Post are reflected in the operating profit of 172 million francs. The financial services market suffered a decline compared to the previous year. This was due to market-related lower interest income. The downward trend in results comes as no surprise to Swiss Post. The influencing factors – declining letter volumes, price and margin pressure in logistics and persistently low interest rates – are well known and are becoming increasingly pronounced. Swiss Post nonetheless still has a solid financial basis.
The previous year’s figures were maintained overall in the communication and logistics market. This was partly due to efficiency measures, and partly due to rising parcel volumes. The result is also on a par with the previous year’s level in the passenger transport market. Operating income declined by 60 million francs from 1,996 million francs to 1,936 million francs, which is 3 percent down on the previous year.
Contributions to the results by the business units
In the first quarter of 2019, PostMail achieved a result of 109 million francs, down 8 million francs year-on-year. Customers are increasingly opting for digital services. This is leading to a decline in consignment volumes, and hence a 20 million franc drop in revenue from addressed letters. As in previous years, the decline in profit was offset thanks to constant optimization of internal processes and the positive development of international business.
PostalNetwork more than compensated for losses in over-the-counter transactions in letters and inpayments. The operating result at PostalNetwork rose by 5 million francs due to the development of the postal network and efficiency improvements. It stood at −21 million francs in the first quarter of 2019.
The products offered by Swiss Post Solutions to help companies with the outsourcing of business processes and with services in document solutions are meeting with growing demand. SPS generated an operating profit of 10 million francs, up 3 million francs year-on-year (+43 percent). SPS succeeded in acquiring new customers in the US in particular.
Swiss Post delivers over 500,000 parcels in Switzerland each working day on average. Parcel volumes processed in Switzerland have grown year-on-year – as have import and export volumes. The overall increase stood at 7.4 percent. PostLogistics posted operating profit of 33 million francs in the first quarter of 2019, which was 1 million francs lower than the previous year’s level. The decline was mainly due to expenses for capacity expansion.
PostFinance is taking the current very low interest rates and changing customer requirements as an opportunity to consistently gear its strategy towards the transformation into a “digital powerhouse”. In the medium and long term, expansion of the investment business or innovations will not be sufficient to compensate for PostFinance’s competitive disadvantage in not being able to issue its own loans and mortgages, however. Operating profit at PostFinance stood at 80 million francs in the first quarter, 16 million francs down on the previous year. Interest income decreased by 42 million francs.
The reorganization is ensuring stability at PostBus. At 3 million francs, operating profit at PostBus remained virtually unchanged in relation to the previous year. During the first three months of the year, rising project costs and services provided to employees had a particularly marked impact on the result. The comprehensive range of services provided by PostBus continues to enjoy growing passenger demand.
Group key figures
|Unit||Full year 2018||Q1 2018||Q1 2019|
|Operating income||CHF million||7’691||1’996 ||1’936|
|Operating profit (EBIT) ||CHF million||501||207||172|
|Group profit||CHF million||405||147||130|
|Total assets||CHF million||124’202||124’202||125’944|
|Headcount at Swiss Post Group||FTEs ||41’632||41’565||41’076|
2 ↑ The operating profit corresponds to the result before net non-operating financial income and taxes (EBIT).
3 ↑ FTEs = full-time equivalents. Average headcount expressed in terms of full-time equivalents, excluding trainees.
PostFinance Ltd key figures
|Unit||Full year 2018||31 March 2018||31 March 2019|
|Number of customers||in thousands||2’857||2’882||2’805|
|Customer assets||CHF million||118’943||122’407||118’712|
|Customer assets in partner solutions||CHF million||10’074||10’025||11’079|
|Mortgages ||CHF million||5’816||5’712||5’858|
|Development of customer assets||CHF million||–822||2’538||–232|
2 ↑ FTEs = full-time equivalents. Average headcount expressed in terms of full-time equivalents. Headcount at PostFinance parent company.
Selected key figures per segment
|31 March 2018||Operating income |
|Operating profit |
(CHF million) 
|Communication market||PostMail||718 ||117|
|Communication market||Swiss Post Solutions||144||7|
|Financial services market||PostFinance||454 ||96|
|Passenger transport market||PostBus||235||4|
|31 March 2019||Operating income |
|Operating profit |
(CHF million) 
|Communication market||Swiss Post Solutions||155||10|
|Financial services market||PostFinance||432||80|
|Passenger transport market||PostBus||234||3|
Masha Foursova, Swiss Post Media Unit, 058 341 49 60, email@example.com