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The first quarter results of 2022 for Swiss Post are better than the previous year. A significant portion of the improved results can be attributed to PostFinance. The logistics services sector again made the largest contribution to the group result, although the volume of packages decreased by around 10 percent compared to the previous year.
(Bern) Swiss Post is overall on track and continues to push ahead with the planned expansion of logistics infrastructure and digital competencies. It is closely monitoring the current environment, which is filled with numerous uncertainties and challenges.
In the first quarter of 2022, Swiss Post generated a group profit of 159 million Swiss francs, which is 68 million francs more than in the same period last year. The operating result (EBIT) was 145 million francs, 64 million francs above the previous year’s figure. Revenue (operating income) reached 1,749 million francs – 58 million francs more than a year ago. “The Post has made a good start to the year with the first quarter; we are financially and strategically on track,” says Alex Glanzmann, CFO of the Post. “However, the good results should not distract from the fact that we still face demanding tasks ahead.”
PostFinance primarily contributed to this positive start. Although interest income on financial investments continued to decline due to market conditions, it was compensated by increased activities in the interbank money market and higher account fees. As a result, total interest income was higher than in the previous year. In terms of commissions and services, PostFinance also recorded greater success – among other things, thanks to new digital investment products such as electronic asset management.
Parcel Market Grows – But Slower Again
While the number of letters decreased by 1.8 percent to 471.8 million pieces, the volume of packages significantly declined in the first quarter compared to the previous year. Swiss Post processed 47.2 million packages in the first quarter of this year, which is 9.6 percent less than in the same period in 2021, when the lockdown effect led to very high volumes in online retail. The COVID-19 measures have largely been lifted, and people are shopping more in stores again. Additionally, supply bottlenecks in Asia and a depressed consumer mood due to the Ukraine war have contributed to the decline in package volumes. Therefore, Swiss Post expects the parcel market to develop more slowly in 2022 than previously anticipated. Despite the flattened growth curve, the increase in volume is expected to continue in the long term. Swiss Post is therefore continuing to expand its infrastructure for package processing as planned. “The additional capacities are necessary for us to efficiently and environmentally friendly process and deliver the long-term growing package volumes,” says CFO Alex Glanzmann. “However, fluctuations in volumes and uncertain forecasts regarding economic development require proactive management of capacities and costs.”
With a result of 109 million francs, the logistics services sector made the largest contribution to the positive group result. However, compared to the previous year, it was 11 million francs lower. PostNet was able to maintain its results despite the continued decline in counter business, while mobility services increased their results by 5 million francs. In PostAuto, there was a significant recovery in demand, which rose to 33.7 million passengers, an increase of 18 percent compared to the previous year. The business of the communications services sector is still in development and is progressing as planned.
Post Confirms Its Chosen Course
Swiss Post is consistently pursuing its strategy “Post of Tomorrow.” It focuses on developing its core business in logistics and communication. It also relies on partnerships, investments, and acquisitions to build necessary competencies. Swiss Post intends to earn the money for the necessary investments itself in the future. “The impact of current investments will also be reflected in the financial results with a certain time lag. We are very confident that we will achieve our goals by the end of the strategy period in financial terms as well,” says CFO Alex Glanzmann.
The environment for implementing the strategy remains very challenging. Market and volume developments, political initiatives, interest rates, energy prices, inflation risks, consumer sentiment, and supply chains: numerous uncertainties currently shape the situation. Agility and proactive planning are therefore of central importance for Swiss Post. “We are closely monitoring the environment to be able to respond quickly to new developments,” says CFO Alex Glanzmann.
Photo: © Swiss Post
