Interim results: Swiss Post on track financially – but environment remains challenging
In the first half of 2022, Swiss Post generated a profit of 259 million francs, up 12 million francs on the first six months of 2021. At 294 million francs, operating profit was up 55 million francs compared to the previous year’s figure, while revenue stood at 3,460 million francs, up 104 million francs year-on-year. Overall, the results are better than in the first half of 2021. They have enabled Swiss Post to strengthen its financial foundation, and prepare it for the challenges of the months ahead. The sharp rise in prices for energy, fuel and raw materials and the marked increase in inflation are leading to significantly higher costs at Swiss Post – particularly in logistics.
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Steep growth in parcel market levels off
Swiss Post can look back on a financially positive first semester. With the second quarter of 2022 now behind it, profit, operating profit (EBIT) and revenue (operating income) are better than in the first half of the previous year. “The interim results are in line with our expectations, Swiss Post is on track strategically and financially,” says Alex Glanzmann, Chief Financial Officer of Swiss Post. “We have established a solid financial foundation over recent years, and consolidated it during the first half of 2022. Swiss Post is well placed to meet the challenges of the months ahead”, Glanzmann adds. The economic environment is particularly challenging, with the sharp rise in inflation, record high prices for energy, fuel and raw materials, potential supply bottlenecks for essential goods, a tense geopolitical situation with the war in Ukraine and subdued consumer confidence, all of which are having an impact on operations at Swiss Post.
Steep growth in parcel market levels off
The largest contribution to the group result in the first half of the year comes from the Logistics Services unit. It generated an operating profit of 229 million francs, 36 million francs less than the previous year’s figure. While letter volumes were down 2.8 percent to 893.5 million, parcel volumes fell more significantly in the first half of 2022. Swiss Post processed 95.6 million parcels in the last six months, 5.1 percent lower year-on-year. The previous uninterrupted trend towards online retail slowed in the first six months of this year. The reasons for this are subdued consumer confidence and the almost complete lifting of coronavirus measures – people are again doing more of their shopping in the high street. In the longer term, however, Swiss Post still expects continued growth in parcels. By comparison, current parcel volumes are 41 percent higher than in the first half of 2018. Swiss Post continues to push ahead with the planned expansion of its parcel processing infrastructure – because greater capacity is needed in the medium and long term. This is the only way that Swiss Post can continue to process and deliver the growing parcel volumes in a manner that is both efficient and ecological.
But the parcel market is fiercely competitive, and pressure on margins and prices is high. This pressure has increased even more due to sharp price spikes in energy, fuel and raw material prices in recent months. “This impacts us significantly. Sorting and delivery cost us a good deal more money than they did a year ago,” says CFO Alex Glanzmann. For 2022, Swiss Post expects additional overall costs in the parcel business of between 30 and 40 million francs. Swiss Post attempts to offset these costs itself as best it can, and will continue to bear them in the second half of 2022. From next year on, however, Swiss Post will have to pass on some of the higher costs: As of 1 January 2023, Swiss Post will be introducing a variable energy surcharge and an inflation surcharge for parcels. Some 3,500 business customers with individually agreed prices for national parcel services will be affected ().