La Poste profits down 17.7%, GeoPost and banking limits decline

La Poste Group’s profits dropped 17.7% last year as the French postal operator restructured under a new business strategy. The company issued its full-year results yesterday, showing revenue up 2.1% year-on-year to EUR 22.2bn, with net profit slipping to EUR 513m.

La Poste said 2014 had been a “defining year” for the group, after its new strategy, “La Poste 2020: Conquering the Future”, was adopted in January 2014.

The company said its revenue growth during a “persistently difficult” economy was mainly driven by its GeoPost international parcel business, as well as its banking division, La Banque Postale.

The growth offset the impacts of digitisation on the traditional mail business.

Discounting acquisitions and currency movement, La Poste Group’s revenue would have risen just 0.9% year-on-year, while net profit would have fallen by 20.5%.

Looking ahead, La Poste said in 2015 it will continue to focus on development and cost control under its current strategy. Priorities include e-commerce and urban logistics.

Expectations are for the group’s revenue to grow about 3% this year, under a generally weak economy.

Divisions

La Poste’s mail and domestic parcels division saw its revenue down 1.8% year-on-year to EUR 11.4bn in 2014, as addressed mail volumes fell 5.8%. The company said the ongoing decline in letters was intensified by a “gloomy” economy, and while this was partially offset by price increases, operating profit fell 23.2% to EUR 419m.

Within the domestic business unit, the parcels division saw a slight increase in revenue to EUR 1.6bn, with the company countering the financial impacts of increased competition with price increases and export growth.

The GeoPost business, which trades through international brands like DPD and Seur, saw its revenue up 13.3% year-on-year to EUR 4.9bn, thanks to a 10.7% rise in volumes in France and abroad. The business benefited from the expansion of added-value service features including expanded pick-up and drop-off networks, deployment of parcel lockers, weekend deliveries and the expansion of the Predict parcel tracking and notification service.

Some 77% of GeoPost’s growth occurred outside France. The subsidiary’s business-to-business activity saw 6% revenue growth, while its business-to-consumer activity saw 16% growth. GeoPost’s operating profit was down 10% year-on-year with investment in network capacity and expanding added-value service features.

La Poste’s post office network saw its EUR 2.3bn down 2.5% compared to 2013, while its digital services business brought in EUR 539m in revenue, down 1.7% on the previous year.

La Banque Postale’s income grew 1.8% to EUR 5.7bn, despite “unfavourable” interest rates, with the retail banking division seeing growth of 1.2%, and asset management division achieving a 10.3% growth in net banking income. The unit’s insurance division also saw significant growth, with its net banking income up 13% year-on-year. Operating profit for La Banque Postale grew 16% to EUR 842m.