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Swiss Post achieves solid annual result

Swiss Post again achieved a good result in 2012. Despite the challenging economic climate, Group profit reached a high level of 859 million francs, just below the previous year’s result (904 million francs). At 8,582 million francs, operating income remained virtually unchanged (previous year 8,599 million). The slight fall in profit was primarily due to higher employee benefit expenses, but was limited by increases in productivity and an upturn in revenues from parcels and transport services. The results showed different trends in Swiss Post’s four markets.

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Last year, Swiss Post generated Group profit of 859 million francs. This is roughly 5 percent less than in the previous year (904 million francs). Operating income fell slightly, by 0.2 percent to 8,582 million francs (previous year 8,599 million). Increased revenues from the parcel business and transport services, and savings as a result of continued increases in productivity could not fully offset the negative effects of higher staff costs and lower earnings.

The operating profit margin showed a moderate fall to 10.4 percent (previous year: 10.6percent). Investments amounted to 443 million francs (previous year 429 million) and were financed as before entirely from the company’s own resources. Total assets rose to 120,016 million francs, mainly due to the increase in customer deposits (previous year 108,254 million). At the end of the year, equity stood at 5,625 million francs.

As in previous years, Swiss Post continues to require sound results throughout all Group units in order to ensure a high-quality basic service in the long term. From the parent company’s profit of 732 million francs in 2012, the Board of Directors proposes to the Federal Council to use 100 million francs to consolidate the pension fund, to pay a dividend of 200 million francs to the Confederation and to allocate 432 million to equity.

Different developments in the four markets

In the final year before its conversion into a public limited company, Swiss Post achieved positive results in all four markets. However, the trends varied from market to market.

In the communication market, Swiss Post with its three Group units (PostMail, Swiss Post Solutions, Post Offices & Sales) generated an overall operating result of 61 million francs (previous year 111 million). The decline was primarily due to higher employee benefit expenses. Volume trends varied from market to market. While the decrease of -1.8 percent in addressed letters remained in line with the previous year, the number of unaddressed items increased by 51 percent due to the complete takeover of the DMC Group.

The PostMail unit, reporting operating income of 3,103 million francs (previous year 3,141 million), represents the strongest pillar in the communication market, and recorded an operating result of 178 million francs (previous year 251 million). The decrease was primarily due to a sharp increase in employee benefit expenses. This has a higher-than-average impact in labour-intensive group units.

With operating income virtually unchanged at 547 million francs (previous year 549 million), Swiss Post Solutions recorded a result of 3 million francs (previous year 11 million).  Restructuring costs in a number of units and declining project revenues from Global Services weighed heavily on the result.

The Post Offices & Sales unit generated a result of –120 million francs (previous year –151 million) with operating income reported at 1,689 million francs (previous year 1,706 million). The significant improvement is essentially due to successful cost management, which produced major savings that more than compensated for declining revenues and increased staff costs. The downward trend in letters mailed and inpayments by private customers continued in 2012. Sales of non-postal brand-name items continued to perform positively and made an important contribution to the utilisation and financing of the postal network.

In the logistics market, PostLogistics achieved an operating result of 152 million francs (previous year 162 million francs). Operating income rose by 34 million to 1,535 million francs (previous year 1,501 million). This increase can be attributed to increased parcel volumes. However, higher employee benefit expenses and increased costs for IT and a range of comprehensive restructuring measures led to an overall decline in profits. The volume of parcels transported increased by 4.1 percent, mainly due to the increase in online business and the partial regaining of import parcel processing from Germany.

In the retail finance market, the result rose to 627 million francs (previous year 591 million) with income coming in at 2,362 million francs (previous year 2,451 million). The growth in customer deposits continued unabated, with the average volume managed by PostFinance exceeding the 100 billion mark for the first time in 2012. Net interest income decreased substantially due to the challenging market environment and less profitable investment options, but this was offset by reversals of impairment losses on financial assets.

In the public passenger transport market, PostBus increased operating income to 778 million francs (previous year 719 million), primarily as a result of a further expansion of services. The operating result amounted to 6 million francs. Due to changes in the internal settlement of accounts between unit and Group, it is not comparable with the previous year.

New structures before the conversion

In accordance with a decision by the Swiss Federal Council, Swiss Post will be converted into a public limited company (Ltd) on 26 June 2013, retroactively to 1 January 2013. In the future organisational form, the three subsidiaries, Post CH Ltd, PostFinance Ltd and PostBus Switzerland Ltd 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 become subject to regulation by the Swiss Financial Market Supervisory Authority FINMA. Operationally, the financial institution will continue to be managed by its own board, but the board will now report to a Board of Directors of PostFinance Ltd nominated by the Swiss Post Board of Directors. With a view to the new organisational form, Swiss Post has obtained a rating from Standard & Poor’s. The rating agency has allocated Swiss Post very good ratings of "AA+" and "AA" (for the PostFinance Ltd subsidiary).

As a public limited company, Swiss Post’s goal will be to continue to provide its customers with first-class services in all four markets. The company expects the challenges resulting from the markets and technological change to become tougher. Swiss Post Ltd will face these challenges by continuing to develop its core business to meet the needs of customers, exploiting identified growth options, further optimising its costs and pursuing a market-driven pricing policy.

Group key figures

Key figures Unit 2012 2011
Operating income CHF million 8‘582 8‘599
Operating result (EBIT)[1] CHF million 890 908
As a % of operating income (EBIT return) % 10,4 10,6
Group profit CHF million 859 904
Total assets CHF million 120‘016 108‘254
Equity CHF million 5‘625 4‘879
Investments[2] CHF million 443 429
Employees at Swiss Post Group (excluding trainees) Full-time equivalents[3] 44‘605 44‘348
of which abroad Full-time equivalents[3] 6‘621 6‘645
Group trainees in Switzerland Persons 2‘015 1‘942
Addressed letters Millions of items sent 2‘291 2‘334
Parcels Millions of items sent 111 107

Selected key figures per segment (Group units)

Communication market Figure Unit 2012 2011
Communication market Operating result[1] CHF million 61 111
PostMail[4] Operating income CHF million 3'103 3'141
PostMail[4] Operating result (EBIT)[1] CHF million 178 251
Swiss Post Solutions Operating income CHF million 547 549
Swiss Post Solutions Operating result (EBIT)[1] CHF million 3 11
Post Offices & Sales Operating income CHF million 1'689 1'706
Post Offices & Sales Operating result (EBIT)[1] CHF million -120 -151
Logistics market Figure Unit 2012 2011
PostLogistics[4] Operating income CHF million 1'535 1'501
PostLogistics[4] Operating result (EBIT)[1] CHF million 152 162
Retail financial market Figure Unit 2012 2011
PostFinance Operating income CHF million 2'362 2'451
PostFinance Operating result (EBIT)[1] CHF million 627 591
PostFinance Inflow of new money CHF million 11'553 8'185
Public passenger transport market Figure Unit 2012 2011
PostBus Operating income CHF million 778 719
PostBus Operating result (EBIT)[1],[5] CHF million 6 33
PostBus PostBus Number of passengers in Switzerland Million people 129 124

1  The operating result is the operating profit before non-operating financial income and taxes (EBIT).
2  Investments in property, plant and equipment, investment property, shareholdings and intangible assets.
3  Average headcount expressed in terms of full-time equivalents.
4  The previous year’s figures were adjusted with the discontinuation of the Swiss Post International segment as of 1 January 2012.
5  Within regional public transport, PostBus is subject to the DETEC ordinance on the accounting of licensed businesses (RKV). There are differences between RKV and IFRS.

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