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A solid result and further investment at Swiss Post

Swiss Post recorded a solid result in 2014, generating Group profit of 638 million francs (previous year normalized: 626 million francs). Operating profit (EBIT) stood at 803 million francs (previous year normalized: 911 million francs). The slight increase in profit is attributable to lower financial and tax expenses. The decline in operating profit is primarily due to additional portfolio impairment charges. All four markets contributed to the solid annual result. Swiss Post continuously aligns its activities with changing customer requirements, investing 443 million francs in the past year in the quality of the universal service and in trendsetting services.

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In 2014, Swiss Post generated Group profit of 638 million francs, up 1.9 percent year-on-year (normalized: 626 million francs). The increase of 12 million francs was the result of the non-recurring nature of one-off tax effects in 2013. Operating profit fell by 11.9 percent to 803 million francs (previous year normalized: 911 million francs). The drop was primarily due to non-recurring reversals of impairment and to the recognition of additional portfolio impairment charges for financial assets. Operating income fell by 118 million francs to 8,457 million francs (previous year normalized: 8,575 million francs). The operating profit margin decreased slightly from 10.6 percent in 2013 to 9.5 percent in 2014. Total assets rose from 120,383 million francs to 124,671 million francs year-on-year. During the reporting period, Swiss Post made investments of CHF 443 million francs (previous year: 453 million francs).

At the General Meeting, the Board of Directors will propose paying a dividend of 200 million francs to the Confederation. As at 31 December 2014, equity stood at 5.0 billion francs (before appropriation of profit).

Positive contribution to result from all four markets

Swiss Post achieved positive results in all four markets. However, the trends varied from market to market. In the communication market, the three Group units PostMail, Swiss Post Solutions and Post Offices & Sales together generated an operating profit of 246 million francs (previous year normalized: 238 million francs). At PostMail and Post Offices & Sales, the volume of addressed letters fell by 2.5 percent, while the number of unaddressed items was up 2.6 percent.

With operating income of 2,887 million francs (previous year: 2,959 million francs), PostMail is the strongest pillar in the communication market, registering operating profit of 334 million francs (previous year normalized: 324 million francs). Lower volumes led to a decrease in income, which was more than offset by the reduction in operating expenses.

Swiss Post Solutions generated operating income of 659 million francs (previous year: 616 million francs). Operating profit rose to 12 million francs (previous year normalized: 5 million francs). The increase was due to a significant improvement in business performance in the core markets of Germany, the UK and the USA.

With operating income of 1,663 million francs (previous year normalized: 1,697 million francs), Post Offices & Sales recorded an operating loss of –100 million francs (previous year normalized: –91 million francs). Letter and parcel volumes and the number of inpayments by private customers continued to decline in 2014. The fall in income was partially offset by savings in operating expenses.

In the logistics market, PostLogistics generated operating profit of 141 million francs (previous year normalized: 133 million francs), with operating income of 1,562 million francs (previous year: 1,581 million francs). The improved result was mainly due to cost savings achieved through process optimization and to improved results in fleet management and value logistics solutions. Parcel volumes increased by 1.6 percent year-on-year.

In the passenger transport market, PostBus recorded an operating profit of 30 million francs (previous year normalized: 28 million francs). Operating income rose to 835 million francs (previous year: 812 million francs). Growth in sales of system services, increased income from networked traffic and a rise in the number of kilometres travelled all contributed to the positive trend.

PostFinance is stable

Operating in the financial services market, PostFinance is facing a challenging market environment due to the still deteriorating interest rate situation. It recorded an operating profit of 382 million francs (previous year normalized: 537 million francs). PostFinance’s operating earning power remained stable. The decline of 155 million francs is mainly due to the recognition of higher portfolio impairment charges. While reversals of impairment and profits in the trading portfolio totalling 74 million francs had a positive influence on the result in the previous year, portfolio impairments of 84 million francs had to be recognised in 2014. Net interest income before impairment rose by 21 million francs year-on-year due to interest rate changes. The inflow of new money totalled 2,839 million francs, and average customer assets amounted to around 117 billion francs in December. At year’s end, 2.9 million customers had placed their trust in PostFinance – a modest rise over the previous year.

Investment in the high-quality universal service and other services

In the past year, Swiss Post has invested 443 million francs in measures to improve the efficiency and assure the quality of the universal service, as well as in new services and products. Thanks to the expansion of automatic sequencing and the procurement of new handheld scanners, it was able to continue improving efficiency in delivery services. Continued growth in online retail is another focus for Swiss Post. To this end, sorting capacity has been increased in the parcel centers and the network of My Post 24 terminals has been expanded. The YellowCube logistics solution was brought on stream to meet the requirements of business customers. Thanks to this new system, online retailers can now let Swiss Post handle their entire logistics chain. Swiss Post is meeting the challenges that lie ahead 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.

Group key figures

Key figures Unit 2014 2013
Operating income CHF m 8,457 8,575[1]
Operating profit (EBIT)[2] CHF m 803 911[1]
As a % of operating income (operating profit margin) % 9.5 10.6[1]
Group profit CHF m 638 626[1]
Total assets CHF m 124,671 120,383
Equity CHF m 5‘010 5‘637
Investments[3] CHF m 443 453
Employees at Group (excluding trainees) Full-time equivalents[4] 44,681 44,105
Of which abroad Full-time equivalents[4] 7,627 6,779
Group trainees in Switzerland Full-time equivalents 2,035 2,024
Addressed letters Millions of items sent 2,203,1 2,258,6
Parcels Millions of items sent 111.8 110.0
Number of passengers in Switzerland Persons (in m) 140.6 138.9

1  Normalized figure
2  The operating profit corresponds to the result before non-operating financial income and taxes (EBIT)
3  Investments in property, plant and equipment, investment property, intangible assets and subsidiaries
4  Average headcount expressed in terms of full-time equivalents (excluding trainees)

PostFinance Ltd key figures

Key figures Unit 2014 2013
Number of customers Thousands 2,938 2,888
Number of customer accounts Thousands 4,752 4,628
Inflow of new money[1] CHF m 2,839 4,256
Customer assets[1] CHF m monthly Ø 117,186 113,580
Customer assets in partner solutions[1] CHF m monthly Ø 7,125 6,042
Mortgages[2] CHF m 4,713 4,424
Loans to business customers (taken up) CHF m 8,165 7,271
E-finance users Thousands 1,624 1,546
Headcount Full-time equivalents[3] 3,454 3,432
Transactions processed In m 996 965

1  Monthly average from 2014, previous year restated
2  PostFinance does not provide mortgages independently. It works with partner banks to do so.
3  Average headcount expressed in terms of full-time equivalents

Selected key figures per segment (Group units)

Communications market Figure Unit 2014 2013
PostMail Operating income CHF m 2,887 2,959
PostMail Operating profit[1] CHF m 334 324[2]
Swiss Post Solutions Operating income CHF m 659 616
Swiss Post Solutions Operating profit[1] CHF m 12 5[2]
Post Offices & Sales Operating income CHF m 1,663 1,697[2]
Post Offices & Sales Operating profit[1] CHF m -100 -91[2]
Logistics market Figure Unit 2014 2013
PostLogistics Operating income CHF m 1,562 1,581
PostLogistics Operating profit[1] CHF m 141 133[2]
Financial services market Figure Unit 2014 2013
PostFinance[3] Operating income CHF m 2,261 2,377
PostFinance[3] Operating profit[1] CHF m 382 537[2]
Passenger transport market Figure Unit 2014 2013
PostBus[4] Operating income CHF m 835 812
PostBus[4] Operating profit[1] CHF m 30 28[2]

1  Operating income and operating profit (EBIT) by segment are reported before management, licence fee and net cost compensation.
2  Normalized figure
3  PostFinance also applies the Swiss Financial Market Supervisory Authority’s Bank Accounting Guidelines (BAG). There are differences between the BAG and the IFRS results.
4  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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