Press Release

Interim results: Swiss Post’s profit declines in difficult market environment

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In the first half of 2016, Swiss Post generated Group profit of 313 million francs (previous year: 391 million francs). The market environment in which Swiss Post operates continues to be difficult: operating profit (EBIT) fell to 383 million francs (previous year: 504 million francs) due to lower contributions to the results from the financial services, communication and logistics markets. 

In the first six months of 2016, Swiss Post generated Group profit of 313 million francs, 78 million francs less than in the prior-year period. At 383 million francs, operating profit was 121 million francs down year-on-year. The company’s business performance is characterized by an ongoing decline in the volume of letters, growing pressure on parcel margins and low interest rates in the financial services market. Operating income rose slightly by 1.2 percent to 4,150 million francs (previous year: 4,100 million francs).

Communication and logistics market: lower contributions to results

In the communication market, Swiss Post recorded an operating profit of 94 million francs (previous year: 137 million francs). The sharper decline in profit generated by Post Offices & Sales is principally due to the Group unit’s new internal performance mandate. PostMail maintained its contribution to operating profit, while Swiss Post Solutions recorded an increased contribution. The decline in the volume of letters was more pronounced year-on-year, with the number of addressed letters falling by 3.5 percent. The operating profit posted by Swiss Post Solutions totalled 10 million francs, 4 million francs higher than the previous year’s figure.

In the logistics market, PostLogistics recorded an operating profit of 52 million francs (previous year: 65 million francs). The logistics market continues to be characterized by increasing competition and price pressure, both nationally and internationally. Despite additional income from the 6.5 percent rise in parcel volumes and increased demand for value logistics solutions, operating profit fell. This decline is due to the Group unit’s adapted internal performance mandate.

In the passenger transport market, PostBus increased its operating profit by two million francs to 21 million francs. The main factor responsible for this positive trend was the ongoing 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.

PostFinance’s competitive disadvantage widens

Active in the financial services market, PostFinance recorded an operating profit (EBIT) of 237 million francs (prior-year figure: 280 million francs). The 43 million franc decline is mainly due to higher portfolio value adjustments on financial assets (–79 million francs), whereas portfolio reversals of impairment had been recognized in the first half of the previous year (+30 million francs). Net income from the interest differential business was down 17 million francs due to a lack of profitable investment opportunities. This trend will continue in the current year. Gains realized from the sale of equity holdings partially offset the decline in profit. The Brexit referendum in the United Kingdom temporarily caused a slight increase in customer foreign exchange trading volumes. Customer assets increased in both the private and business customer segments, with PostFinance’s sight deposit balance at the Swiss National Bank exceeding the exemption limit. PostFinance’s disadvantage of being unable to issue its own loans and mortgages will become increasingly pronounced. In the current low interest rate environment, it is clear that the lending prohibition is economically damaging and a threat to PostFinance’s long-term profitability.

Consistently adapting to customer requirements

Swiss Post wants to continue to provide its customers with first-class services in the future and therefore relies on solid profits which it can reinvest. In addition, Swiss Post must further develop its access points and services, continuing to provide customers with easy and versatile access, while at the same time creating an affordable infrastructure. Swiss Post expects to meet the Confederation’s financial goals again in 2016.

Information

Swiss Post Media Unit: 058 338 13 07

Media Unit PostFinance: 058 338 30 32

Media Unit PostBus: 058 338 57 00

Group key figures First half 2016
First half 2015 Year 20151
Group key figures
Operating income (CHF m)
First half 2016
4'150
First half 2015
4'100 3
Year 20151
8'224
Group key figures
Operating profit (EBIT, CHF m) 1, 2
First half 2016
383
First half 2015
504
Year 20151
823
Group key figures
As a % of operating income (EBIT return)
First half 2016
9.2
First half 2015
12.3
Year 20151
10.0
Group key figures
Group profit (CHF m) 2
First half 2016
313
First half 2015
391
Year 20151
645
Group key figures
Total assets (CHF m)
First half 2016
127'889
First half 2015
121'662
Year 20151
120'327
Group key figures
Equity (CHF m)
First half 2016
4'276
First half 2015
5'227
Year 20151
4'385
Group key figures
Cash flow from investing activities (CHF m)
First half 2016
-289
First half 2015
-404
Year 20151
-325
Group key figures
Headcount at Swiss Post Group (FTEs) 4
First half 2016
43'732
First half 2015
44'018
Year 20151
44'130


1 The operating profit corresponds to the result before non-operating financial income and taxes (EBIT).
2 Normalized figure
3 The figure has been adjusted (see Notes to the Group interim financial statements, Accounting changes).
4 FTEs = Full-time equivalents. Average expressed in terms of full-time equivalents, excluding trainees.

PostFinance Ltd key figures First half 2016
First half 2015
Year
2015
PostFinance Ltd key figures
Number of customers (Thousands) 1
First half 2016
2'944
First half 2015
2'946
Year 2015
2'951
PostFinance Ltd key figures
Number of customer accounts (Thousands) 1
First half 2016
4'770
First half 2015
4'810
Year 2015
4'835
PostFinance Ltd key figures
Customer assets (CHF m)
First half 2016
117'630
First half 2015
113'115
Year 2015
114'866
PostFinance Ltd key figures
Funds, securities, life insurance
First half 2016
7'488
First half 2015
7'614
Year 2015
7'772
PostFinance Ltd key figures
Mortgages 2
First half 2016
5'174
First half 2015
4'904
Year 2015
5'089
PostFinance Ltd key figures
Loans to business customers (taken up; CHF m)
First half 2016
8'215
First half 2015
8'742
Year 2015
9'063
PostFinance Ltd key figures
E-finance users (Thousands)
First half 2016
1'717
First half 2015
1'657
Year 2015
1'683
PostFinance Ltd key figures
Headcount (FTEs) 3
First half 2016
3'622
First half 2015
3'527
Year 2015
3'571
PostFinance Ltd key figures
Transactions processed (Millions, cumulative)
First half 2016
516
First half 2015
499
Year 2015
1'020


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)

30. June 2016
Group unit
Operating income (CHF m)1 Operating income (CHF m)1,2
30. June 2016
Communication market
Group unit
PostMail
Operating income (CHF m)1
1'485
Operating income (CHF m)1,2
183
30. June 2016
Communication market
Group unit
Swiss Post Solutions
Operating income (CHF m)1
285
Operating income (CHF m)1,2
10
30. June 2016
Communication market
Group unit
Post Offices & Sales
Operating income (CHF m)1
576
Operating income (CHF m)1,2
-99
30. June 2016
Logistics market
Group unit
PostLogistics
Operating income (CHF m)1
772
Operating income (CHF m)1,2
52
30. June 2016
Financial services market
Group unit
PostFinance 3
Operating income (CHF m)1
1'126
Operating income (CHF m)1,2
237
30. June 2016
Passenger transport market
Group unit
PostBus 4
Operating income (CHF m)1
457
Operating income (CHF m)1,2
21
30. June 2016
Other 5
Group unit
 
Operating income (CHF m)1
457
Operating income (CHF m)1,2
-21
30. June 2015 Group unit
Operating income (CHF m)1 Operating income (CHF m)1,2,6
30. June 2015
Communication market
Group unit
PostMail
Operating income (CHF m)1
1'389
Operating income (CHF m)1,2,6
184
30. June 2015
Communication market
Group unit
Swiss Post Solutions
Operating income (CHF m)1
300
Operating income (CHF m)1,2,6
6
30. June 2015
Communication market
Group unit
Post Offices & Sales
Operating income (CHF m)1
776
Operating income (CHF m)1,2,6
-53
30. June 2015
Logistics market
Group unit
PostLogistics
Operating income (CHF m)1
757
Operating income (CHF m)1,2,6
65
30. June 2015
Financial services market
Group unit
PostFinance 3
Operating income (CHF m)1
1'114
Operating income (CHF m)1,2,6
280
30. June 2015
Passenger transport market
Group unit
PostBus 4
Operating income (CHF m)1
416
Operating income (CHF m)1,2,6
19
30. June 2015
Other 5
Group unit
 
Operating income (CHF m)1
465
Operating income (CHF m)1,2,6
3


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 ARB accounting rules for banks (Accounting rules for banks, securities dealers, financial groups and conglomerates – ARB). There are differences between the ARB 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