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Swiss Post on track in challenging market environment
In the first three quarters of 2014, Swiss Post generated Group profit of 494 million francs (previous year: 535 million francs). At 632 million francs, operating profit (EBIT) is down on the previous year’s figure (769 million francs). This decrease is due to lower operating profit in the retail financial market. Operating profit increased in the passenger transport market and also improved in the communication and logistics market thanks to good cost management.
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After the first nine months of 2014, Group profit at Swiss Post stood at 494 million francs, which represents a decline of 7.7 (7.663) percent year-on-year. Operating profit fell by 137 million francs to 632 million francs. The decline in operating profit is due to the lower contribution to results from the retail financial market. The number of addressed letters continued to fall. The logistics market faced intense competition.
In the communication market, Swiss Post recorded an operating profit of 188 million francs in the three quarters of 2014 (previous year: 178 million francs). This improvement is due to positive income trends in the Swiss Post Solutions segment and lower expenses in the PostMail segment. Operating income at PostMail and Post Offices & Sales decreased as a result of volume factors. The number of addressed letters fell by 2.5 percent, while the number of unaddressed items was up 2.7 percent. In the logistics market, Swiss Post recorded an operating profit of 97 million francs, which is around three million francs more than in the prior-year period. The increase is due to business optimization measures. Operating income declined as a result of intense competition. Parcel volumes rose by two percent. The passenger transport market is growing steadily. Swiss Post achieved an operating profit of 36 million francs in this market (previous year: 27 million francs). This increase was mainly due to the expansion of services in Switzerland and France as well as to one-off transport revenue, particularly as a result of adjustments to cost apportionment of the fare networks.
PostFinance result impacted by higher impairment charges
In the retail financial market, PostFinance is still facing a difficult market environment due to persistently low interest rates, recording an operating profit of 309 million francs (previous year: 443 million francs). Net interest income before impairment remained virtually on a par with the prior-year period despite increased customer deposits. Higher portfolio impairment charges and a rise in non-staff costs led to a drop in results. The inflow of new money totalled 1,010 million francs in the first three quarters of the year, and average customer assets comprised 115 billion francs in September.
Outlook
In light of the current position, Swiss Post expects to record a solid result for 2014 as a whole. Group profit may however be below the previous year’s level.
Group key figures
| Key figures | Unit | Q1 - Q3 2014 | Q1 - Q3 2013 | Year 2013 |
|---|---|---|---|---|
| Operating income[1] | CHF m | 6,183 | 6,257 | 8,575 |
| Operating profit (EBIT)[1],[2] | CHF m | 632 | 769 | 911 |
| As a % of operating income (EBIT return) | % | 10.2 | 12.3 | 10.6 |
| Group profit[1] | CHF m | 494 | 535 | 626 |
| Total assets | CHF m | 123,949 | 118,184 | 120,383 |
| Equity | CHF m | 5,431 | 4,967 | 5,637 |
| Cash flow from investing activities | CHF m | -528 | -196 | -309 |
| Employees at Swiss Post Group | FTEs[3] | 44,687 | 43,855 | 44,105 |
1 ↑ Previous year’s figures normalized to take account of one-off items
2 ↑ Operating profit corresponds to earnings 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
| Key figures | Unit[1] | Q1 - Q3 2014 | Q1 - Q3 2013 | Year 2013 |
|---|---|---|---|---|
| Number of customers | Thousands | 2,928 | 2,958 | 2,888 |
| Number of customer accounts[2] | Thousands | 4,726 | 4,597 | 4,628 |
| Inflow of new money[3] | CHF m | 1,010 | 563 | 4,256 |
| Customer assets[3] | CHF m | 115,467 | 109,605 | 113,580 |
| Customer assets in partner solutions[3] | CHF m | 6,825 | 5,753 | 6,042 |
| Mortgages[4] | CHF m | 4,621 | 4,355 | 4,424 |
| Loans to business customers (taken up) | CHF m | 7,926 | 7,116 | 7,271 |
| E-finance users | Thousands | 1,607 | 1,528 | 1,546 |
| Headcount | FTEs[5] | 3,433 | 3,436 | 3,432 |
| Transactions processed | Millions, cumulative | 727 | 704 | 965 |
1 ↑ At end of period (unless otherwise stated)
2 ↑ New calculation from 1.1.2014
3 ↑ Monthly average from 2014, previous years restated
4 ↑ In cooperation with partner banks
5 ↑ FTEs = Full-time equivalents. Average expressed in terms of full-time equivalents. Headcount at PostFinance parent company
Selected key figures per segment (Group units)
| 30 September 2014 | Segment | Operating income (CHF m)[1] | Operating profit (CHF m)[1],[2] |
|---|---|---|---|
| Communication market | 3,500 | 188 | |
| PostMail | 2,113 | 259 | |
| Swiss Post Solutions | 483 | 8 | |
| Post Offices & Sales | 1,168 | -79 | |
| Logistics market | PostLogistics | 1,138 | 97 |
| Retail financial market | PostFinance[3] | 1,688 | 309 |
| Passenger transport market | PostBus[4] | 627 | 36 |
| Other[5] | 650 | 2 |
| 30 September 2013 | Segment | Operating income (CHF m)[1],[6] | Operating profit (CHF m)[1],[2],[6] |
|---|---|---|---|
| Communication market | 3,496 | 178 | |
| PostMail | 2,158 | 248 | |
| Swiss Post Solutions | 426 | 0 | |
| Post Offices & Sales | 1,192 | -70 | |
| Logistics market | PostLogistics | 1,152 | 94 |
| Retail financial market | PostFinance[3] | 1,780 | 443 |
| Passenger transport market | PostBus[4] | 602 | 27 |
| Other[5] | 668 | 27 |
1 ↑ Operating income and operating profit by segment are reported before management, licence fee and net cost compensation.
2 ↑ Operating profit corresponds to earnings before net non-operating financial income/expenses and taxes (EBIT).
3 ↑ PostFinance Ltd also applies the Swiss Financial Market Supervisory Authority’s Bank Accounting Guidelines (BAG). There are differences between the BAG and the IFRS results.
4 ↑ In the field of 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.
5 ↑ Includes service units (Real Estate and Information Technology) and management units (e.g. Human Resources, Finance and Communication).
6 ↑ Normalized figures