A good Group result in a difficult environment

Swiss Post generated a solid Group profit of CHF 728 million in 2009, which is 12 percent lower than in the previous year. The operating income fell by 3 percent to CHF 8,709 million (previous year: CHF 8,980 million). The main reasons for the lower profit are the drop in earnings, which can be attributed to the absence of the one-time earnings from real estate in the previous year, the price reductions and the absorption of VAT for letters as of 1 July 2009, as well as to the economic crisis and other factors. Due to increased wage expenses and depreciation, the expenditure could not be reduced to the same extent. The excellent result achieved by PostFinance, lower impairments and the savings due to the new letter centres partially compensated for the drop in Profit

The operating profit margin fell from 9 to 8.3 percent. Investments in 2009 were lower than the previous year (CHF 516 million) at CHF 431 million and could again be fully financed from our own funds. This positive result means that Swiss Post is able to boost its equity further. This came to CHF 3,534 million at the end of the year, which is still below the usual level for the industry.

Swiss Post needs good results also in future

The Group profit of CHF 728 million is a good result in view of the economic crisis, confirming Swiss Post’s efficiency and competitiveness. The hesitant recovery of the economy, the decline in volumes of addressed letters, the drop in earnings resulting from the consensual arrangement with the price supervisor (minus CHF 200 million a year) and the increasing competition will continue to define Swiss Post’s environment. Swiss Post again expects a somewhat lower result for 2010. In the coming years, it will also have to contribute to the financing of the pension fund, aim for an equity level in line with the industry, finance its investments from its own funds and provide the Confederation with an appropriate share of the profit. To do so, it needs industry-standard results in all Group units. The Board of Directors is proposing to the Federal Council to use CHF 250 million of the current profit to finance the pension fund and to distribute CHF 200 million to the public purse as a share of the profit.

Differing unit trends

The individual units performed in different ways in the reporting period. However, the majority delivered substantial profit contributions. PostMail reported a decline in earnings to CHF 2,808 million (previous year: CHF 2,916 million), which is mainly due to the price reductions and absorption of VAT introduced on 1 July 2009, and the reduction in the volume of addressed letters by 4.7 percent. The decline in volumes is largely due to the economic crisis and substitution by electronic means of communication. On the other hand, the commissioning of the new letter centres and the adjustment of delivery capacities in line with the decline in volumes resulted in considerable savings. All in all, this resulted in an operating result of CHF 198 million – just CHF 51 million lower than the previous year. With stable parcels business, PostLogistics was able to limit the decline in earnings in courier and express services through acquisitions, and generated an operating result of CHF 1,488 million (previous year: CHF 1,516 million). Thanks to simultaneous cost reductions, the operating result increased slightly to CHF 45 million (previous year: CHF 39 million). Swiss Post International was able to retain its operating income at CHF 1,028 million (previous year: CHF 1,034 million) and improve its result due to a reduction in expenditure to CHF 53 million (previous year: CHF 36 million). Swiss Post Solutions, which like SPI mainly operates abroad, was able to hold its operating income at almost the same level as the previous year at CHF 696 million (2008: CHF 708 million), despite the economic difficulties. However, the unfavourable economic cycle and additional expenditure related to growth and restructuring resulted in a negative operating result of CHF -25 million (previous year: CHF +9 million).

Additional income from branded items and PostBus

The Post Offices & Sales unit increased its total income by CHF 22 million to CHF 1,359 million thanks to the additional revenues from the sale of financial products and non-postal branded items. The additional expenditure, influenced in part by higher staff costs, resulted in a decline in the result by CHF 18 million to CHF -113 million. PostFinance (this unit already published its financial figures for 2009 in February) increased its result to a record of CHF 441 million (previous year: CHF 229 million), despite a slightly lower income of CHF 2,160 million (previous year: CHF 2,191 million). By again expanding its service in Switzerland and abroad, PostBus increased its operating income by CHF 36 million to CHF 640 million. The additional services created more jobs and resulted in additional expenditure on a similar scale, meaning that the operating result remained stable on a par with the previous year (CHF 27 million).

Selected key figures for segments (Group units)

¹ ↑ Operating result corresponds to operating profit before net non-operating financial income/expense and taxes (EBIT).
² ↑ Investment in tangible fixed assets, participations & intangible assets
³ ↑ Average workforce in full-time equivalents
⁴ ↑ The PostBus segment is subject to the Railways Act (EBG). This provides for separate accounting regulations for franchised transport businesses (REVO). Results prepared in accordance with REVO and IFRS differ.
⁵ ↑ Previous year's figures adjusted