Press releases, Press releases Mobility Solutions Ltd, Press releases Post Real Estate Management and Services Ltd

Subdued result due to difficult market environment

In the first quarter of 2016, Swiss Post achieved Group profit of 192 million francs, which is 33 million francs down on the previous year’s figure. Operating profit (EBIT) fell to 207 million francs (previous year: 292 million francs). This reduction is due to the lower contribution to results from three of Swiss Post’s four markets. Volume declines resulting from technological change, as well as the low interest rate environment and value adjustments in the financial sector, pose major challenges for Swiss Post.

In the first three months of 2016, Swiss Post generated Group profit of 192 million francs (previous year: 225 million francs). At 207 million francs, operating profit was 85 million francs down year-on-year. This decline is due to lower contributions to the results from the communication, logistics and particularly the financial services market. Operating income decreased by 2.8 percent to 2,069 million francs (previous year: 2,128 million francs).

In the communication market, Swiss Post recorded an operating profit of 72 million francs (previous year: 83 million francs). The 11 million franc decline year-on-year is principally due to one-off effects at Post Offices & Sales. PostMail and Swiss Post Solutions increased their contribution to operating profit. The decline in the volume of addressed letters was more pronounced year-on-year. The number of addressed letters fell by 3.3 percent. In the logistics market, PostLogistics recorded an operating profit of 24 million francs (previous year: 31 million francs). Despite additional income from the 3.9 percent rise in parcel volumes, increased demand for value logistics solutions and company takeovers, operating profit dropped due to one-off effects. In the passenger transport market, PostBus increased its operating profit by one million francs to 14 million francs. This positive trend was mainly attributable to the low price of fuel. As the budgets of the public entities which act as contracting bodies for transport services are squeezed, the pressure on prices is rising even more.

Decline in profit at PostFinance

PostFinance, which operates in the financial services market, achieved an operating profit of 102 million francs in the first three months of 2016 (previous year: 172 million francs). The 70 million franc decline is mainly due to higher portfolio value adjustments on financial assets (–27 million francs), whereas portfolio reversals of impairment had been recognized in the prior-year period (+47 million francs). Net income from the interest differential business was down 5 million francs due to a lack of profitable investment opportunities. This trend will continue in the current year and heighten the disadvantage of PostFinance not being able to issue its own loans and mortgage. Net trading income dropped by 15 million francs. The trading volumes seen in the first quarter of 2015, when record sales were achieved in foreign exchange transactions following the lifting of the minimum euro exchange rate, could not be matched in the first quarter of 2016. An encouraging rise was registered in services income, which was up 24 million francs year-on-year. The inflow of new money totalled 1.6 billion francs, with PostFinance’s sight deposit balance at the Swiss National Bank still exceeding the exemption limit.

Group key figures

Unit Full year 2015[1] Q1 2015 Q1 2016
Operating income CHF million 8,224 2,128 2,069
Operating profit (EBIT)[2] CHF million 823 292 207
As a % of operating income (EBIT return) % 10.0 13.7 10.0
Group profit CHF million 645 225 192
Total assets CHF million 120,327 120,644 125,920
Equity CHF million 4,385 5,209 4,723
Cash flow from investing activities CHF million -325 -338 -58
Headcount at Swiss Post Group FTEs[3] 44,131 44,071 43,796

1 Normalized figures.
2 The operating profit corresponds to the result before net non-operating financial income and taxes (EBIT).
3 FTEs = Full-time equivalents. Average expressed in terms of full-time equivalents, excluding trainees.

PostFinance Ltd key figures

Unit Full year 2015 Q1 2015 Q1 2016
Number of customers Thousands 2,951 2,953 2,941
Number of customer accounts Thousands 4,835 4,795 4,781
Customer assets CHF million 114,866 111,485 116,503
Funds, securities, life insurance CHF million 7,772 7,432 7,888
Mortgages[2] CHF million 5,089 4,817 5,130
Loans to business customers taken up CHF million 9,063 8,650 9,041
E-finance users Thousands 1,683 1,645 1,702
Headcount FTEs[3] 3,571 3,510 3,635
Transactions processed In millions
cumulative
1,020 248 254

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)[1]

31 March 2016 Operating income (CHF m)[2] Operating profit (CHF m)[2],[3]
Communication market PostMail 761 112
Communication market Swiss Post Solutions 146 6
Communication market Post Offices & Sales 308 -46
Logistics market PostLogistics 381 24
Financial services market PostFinance[4] 514 102
Passenger transport market PostBus[5] 231 14
Other[6] 230 -5
31 March 2015 Operating income (CHF m)[2] Operating profit (CHF m)[2],[3]
Communication market PostMail 706 104
Communication market Swiss Post Solutions 153 4
Communication market Post Offices & Sales 413 -25
Logistics market PostLogistics 379 31
Financial services market PostFinance[4] 595 172
Passenger transport market PostBus[5] 211 13
Other[6] 223 -7

1 The segment results for Post Offices & Sales, PostLogistics and PostFinance can only be compared with results from previous years to a limited extent due to one-off effects.
2 Operating income and operating profit (EBIT) by segment are reported before management, licence fees and net cost compensation.
3 The operating profit corresponds to the result before net non-operating financial income and taxes (EBIT).
4 PostFinance Ltd also applies the accounting rules for banks, securities dealers, financial groups and conglomerates (ARB). There are differences between the ARB and the IFRS results.
5 Within 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.
6 Includes service units (Real Estate and Information Technology) and management units (e.g. Human Resources, Finance and Communication).