Swiss Post delivers strong performance despite lower annual result

Swiss Post generated a group profit of 178 million Swiss francs in 2020. This is 77 million Swiss francs less than the previous year. The operating result (EBIT) was 272 million Swiss francs, down 178 million Swiss francs. The Corona pandemic has posed significant challenges for the Post in all areas. In light of these diverse and substantial challenges, the management of the Post is satisfied with the results.

(Bern) The pandemic clearly demonstrates that the new strategy of the Post is important and correct. The Post must now invest and act sustainably to ensure that it can continue to provide basic services with its own resources in the future.

The group profit and operating result of Swiss Post were significantly lower in 2020 than in the previous year, as expected. The profit amounted to 178 million Swiss francs, which is about 77 million Swiss francs below the previous year’s profit. The operating result fell from 450 million Swiss francs to 272 million Swiss francs compared to the previous year. The decline is due in part to existing trends, such as the decrease in letter volumes and the negative interest rate situation at PostFinance. Additionally, the Corona pandemic has exacerbated some of these developments and brought new challenges for all areas and markets of the Post: a veritable package boom on one hand, additional protective measures and staff, fewer letters, and reduced counter transactions in post offices on the other hand.

Difficult Conditions

At PostAuto, the number of passengers has significantly decreased, while PostAuto has maintained its basic service. The effects of the Corona pandemic have burdened the group result overall by 139 million Swiss francs. “The pandemic has put all employees and the entire management of the Post under significant pressure. For example, we processed an unprecedented volume of packages under difficult conditions and reliably delivered them to all corners of Switzerland. Given these large and diverse challenges posed by Corona, we can be satisfied with last year’s results, even if they are worse than in previous years,” says Roberto Cirillo, CEO of the Post. In this context, the annual result was both expected and a strong performance.

Package Boom Cannot Compensate for Declines in Other Areas

In 2020, the Post delivered about 23 percent more packages than in the previous year. These enormous package volumes and increased insurance benefits led to a very good operating result for PostLogistics. It amounts to 201 million Swiss francs, which is 73 million Swiss francs above the previous year’s figure. However, the fact remains: the large package volumes cannot compensate for the negative impacts of the Corona crisis on all other areas of the Post.

More Packages, Fewer Letters: Utilizing Resources Effectively

The pandemic has accelerated the decline in the number of letters. The volume of addressed letter mailings fell by 5.6 percent to 1,705.6 million last year. PostMail achieved an operating result of 293 million Swiss francs in 2020. This remains the most significant contribution to the group’s results, even though it is 77 million Swiss francs lower than in the previous year. The Post utilized resources in letter processing to relieve the heavily burdened package logistics. It was able to process up to 150,000 small packages daily in the letter centers. The close collaboration between employees in the letter and package sectors was efficient and effective. Since the beginning of 2021, letter and package processing have been organizationally merged. This integration creates the logistical foundation for the future postal basic service in Switzerland.

The Pandemic Affected All Areas of the Post

The Corona pandemic influenced all areas of the Post. PostNetz recorded a negative operating result of -105 million Swiss francs. This allowed PostNetz to improve its operating result by 27 million Swiss francs compared to the previous year; however, the previous year’s result had been burdened by a provision of 41 million Swiss francs. In 2020, package transactions in the branches also rose sharply (+19 percent). However, the long-standing declines in payment transactions (-15 percent) and letter business (-10 percent) were further exacerbated as a result of the pandemic.

The operating result of PostFinance amounted to 161 million Swiss francs, which is 79 million Swiss francs less than in the previous year. Of this, 22 million Swiss francs are the result of the impacts of the Corona pandemic: As people traveled significantly less, the conversion gains from cash withdrawals in foreign currencies at ATMs both domestically and abroad, as well as from credit card usage, decreased. Furthermore, the decline in results is primarily due to the ongoing negative interest rate environment and declining trading success. In light of this challenging environment, the Post welcomes the political discussion initiated by the Federal Council regarding the future of PostFinance and the future design and financing of basic services in Switzerland’s payment transactions.

Swiss Post Solutions was able to achieve new business of 302 million Swiss francs last year, which is 93 million Swiss francs more than in the previous year. However, exchange rate effects and losses due to the pandemic also led to a decline in the operating result by 7 million Swiss francs to 25 million Swiss francs at Swiss Post Solutions.

Last but not least, the pandemic has also severely impacted the passenger transport market. The Federal Council’s recommendation in spring to the population to avoid public transport whenever possible led to a significant drop in demand and revenue for PostAuto. Nevertheless, PostAuto maintained its basic service on behalf of the Federal Government. Consequently, the operating result fell to -79 million Swiss francs, which is 55 million Swiss francs less than in the previous year. The majority of this (48 million Swiss francs) can be attributed directly to the pandemic. As a licensed company in regional passenger transport, PostAuto is not allowed to realize planned profits; any surpluses go into a legally mandated reserve. From this reserve, PostAuto must cover the revenue losses caused by the pandemic and has no entitlement to the financial support for public transport approved by Parliament in regional transport.

The Post is on the Right Track

The Corona pandemic has shown that the Post is there for the people of Switzerland even in times of crisis, and it is central to the Swiss economy. The restrictions on public life highlighted the important role of the Post in the basic supply of Switzerland. Only because the Post brought goods to people’s homes did the population remain supplied with everything necessary. CEO Roberto Cirillo is convinced: “The pandemic shows us that people and businesses in Switzerland rely on a functioning Post. At the same time, we have proven that the Post can be relied upon, even in challenging times.” The Chairman of the Board, Urs Schwaller, adds: “The new corporate strategy that we have been implementing for two months strengthens the Post as a public service company. A high-quality basic supply across the country is and remains our most important goal. It is therefore essential that a comprehensive discussion about basic supply takes place in Parliament in the near future. We need clarity about the future postal basic supply and about the basic supply in payment transactions.”

The Post aims to ensure basic supply in the long term with its own financial resources. It is already setting the course for this today. Since the beginning of 2021, it has organizationally merged letter and package logistics, thereby enabling additional synergies. According to CFO Alex Glanzmann, such efficiency measures are just as important for the coming years as timely price adjustments, targeted investments, and growth in clearly defined markets: “We will not only invest in our logistics but also in the area of trustworthy digital communication. The Post wants to support the people and businesses of Switzerland on their way into the digital future.” Glanzmann emphasizes: “The Post has a stable financial foundation and a healthy equity and liquidity situation. This helps us tackle the planned growth to ensure basic supply in the future with our own resources.”

Urs Schwaller Will Hand Over the Presidency to New Leadership at Year-End

Chairman of the Board Urs Schwaller has decided to hand over his position effective December 1, 2021. “The timing is right for both the Post and for me. We have consistently addressed past mistakes and implemented far-reaching measures to prevent such occurrences from happening again. Above all, we have set central courses for the future viability of the Post. The new strategy of the Post ensures that we meet the changing needs of our customers and secure the future of basic supply through competitiveness. Therefore, I am passing on the presidency of the Board with a good feeling at the end of the year,” says Urs Schwaller. Urs Schwaller took over the presidency of the Post in April 2016. “At 68 years old, the right moment has also come for me personally to consciously step back from my career. Even though I already know that I will miss the people in our organization. The Post thrives on its great employees who are dedicated every day and connect Switzerland in so many different ways. This has not only impressed me time and again but has also given me a positive outlook. Hearts are also yellow,” summarizes Schwaller.

The Federal Council will determine the successor to Urs Schwaller and propose it to the Board for election. The General Assembly, which will decide on this, will take place on April 27, 2021. Through the long-term planning of the handover, Urs Schwaller aims to ensure that the succession proceeds smoothly.

Key Figures Group

¹ ↑ The 2019 value has been adjusted.
² ↑ The operating result corresponds to the result before non-operating financial success and taxes (EBIT).
³ ↑ PE = Personnel unit. Average count converted to full-time positions, excluding trainees.

Key Figures PostFinance AG

¹ ↑ In cooperation with partner banks.
² ↑ PE = Personnel unit. Average count converted to full-time positions. Count of PostFinance AG.
³ ↑ For life insurance, starting in 2020, the zillmerized coverage capital is replaced by the surrender value of the life insurances. Previous year values restated.

Selected Key Figures Segments

¹ ↑ The 2019 value has been adjusted.

Photo: © Swiss Post / Caption: Post Chairman Urs Schwaller will hand over his position effective December 1, 2021

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