Interim results: Swiss Post on track financially – but environment remains challenging

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 (more on this in the media blog).

Pleasing result at PostFinance – but the short-term outlook is gloomy

PostFinance made a significant contribution to Swiss Post’s positive interim results. During the first half of 2022, the bank benefited from higher revenue from customer asset fees and interbank business. This enabled PostFinance to offset the persistent decline in the revenues from the interest difference business. Higher revenue from commission business and services also contributed to the positive result. Swiss Post considers the raising of the key rate on 17 June 2022 to be correct. Swiss Post and PostFinance welcome the return to positive interest rates, which is also in the interests of customers. But in the short term, the SNB’s interest-rate hike will have a negative impact on revenue from customer asset fees and interbank business. PostFinance therefore expects significantly lower revenue from interest operations for the second half of the year. While the bank expects the outlook for the traditional interest difference business to improve again in the medium term, the recovery will only be gradual.

PostalNetwork stable, PostBus with significantly higher passenger numbers

PostalNetwork maintained a stable result despite losses in letters and fewer over-the-counter inpayments, while operations at the Communication Services unit remain under development and are proceeding as planned. Mobility Services increased its operating profit by 5 million francs compared to the first half of 2021. Encouragingly, PostBus recorded 20 percent more passengers than a year ago as a result of its expanded range of services and recovering demand.

“Swiss Post of tomorrow” is the right path

The current developments on the markets reaffirm Swiss Post’s view that it is on the right track with its “Swiss Post of tomorrow” strategy. The company is expanding its infrastructure for the Swiss economy and the Swiss population. With the acquisition of logistics companies in neighbouring countries, it is reducing its dependency on global supply chains. Swiss Post is also continuing to develop its products and services in line with new customer requirements and is growing in new business areas. “We keep our promises, even in difficult times, and ensure optimal provision of products and services to the Swiss people and economy – powering a modern Switzerland,” says Swiss Post’s CFO, Alex Glanzmann.

Swiss Post’s full Interim Report is published here.

Group key figures

¹ Figures have been adjusted for the purposes of comparison due to the classification of Swiss Post Solutions as a discontinued operation. The Swiss Post Solutions business unit was sold on 30 March 2022.

² The operating profit corresponds to the result before net non-operating financial income and taxes (EBIT).

³ FTEs = full-time equivalents. Average headcount expressed in terms of full-time equivalents, excluding trainees.

⁴ Normalized figures.

⁵ The figures have been adjusted (see Notes to the 2022 Group interim financial statements, Basis of accounting, Accounting changes).

Selected key figures per segment 1st half of 2021¹

Selected key figures per segment 1st half of 2022¹

¹ Due to the classification of Swiss Post Solutions as a discontinued operation, the segment is no longer included in the segment disclosure. The Swiss Post Solutions business unit was sold on 30 March 2022.

² The operating profit corresponds to the result before net non-operating financial income and taxes (EBIT).

PostFinance Ltd key figures

¹ In cooperation with partner banks.

² FTEs = full-time equivalents. Average headcount expressed in terms of full-time equivalents. Headcount at PostFinance parent company

More information

Press conference video (in German)

Information

Erich Goetschi, Swiss Post Media Unit, +41 58 341 37 42, presse@swisspost.ch