Spir Communication announces closure of Adrexo Mail (FRA)

Spir Communication has announced that it will close Adrexo Mail, its addressed mail distribution arm, after a difficult year. Group net income plunged 43.5 percent to 29.8 million euros in 2007 compared to the same period last year and operation income decreased from 42.5 percent to 44.5 million euros. Turnover increased 10.5 percent to 650.1 million euros.

The company said that its margins and last year’s results have been severely affected by the distribution networks of Adrexo Mail, an activity which was launched last year pending deregulation of the postal market in France and Europe. “This important strategic decision was motivated by the lack of clarity and stability of the market,” Phillippe Leoni, CEO of Spir said at a conference. “Spir stresses that given the lag from the date of full liberalization of the postal marketing in France from January 2009 to January 2011, there is uncertainty.”

He added that the group benefited from the difficult experiences of its European competitors in the market for the distribution of addressed mail. Leoni said that Spir chooses to limit the damage, and as a result this activity has generated an operation loss of around 18 million euros in 2007. The closure of Adrexo Mail will result in a total loss of less than 13 million euros in 2008. Spir expects to keep some activities, such as packages and relay letters, which do not depend on the opening of the postal market. This division has weighted on the results of the mail (distribution of printed matter, packages, catalogues, mail), which saw net operation profit plunge from 61.7 percent to 8.6 million errors despite a 23.4 percent increase in turnover of 303.6 million. The group remains confident in its ability to improve its performance in 2008.

Spir Communication has announced that it will close Adrexo Mail, its addressed mail distribution arm, after a difficult year. Group net income plunged 43.5 percent to 29.8 million euros in 2007 compared to the same period last year and operation income decreased from 42.5 percent to 44.5 million euros. Turnover increased 10.5 percent to 650.1 million euros.

The company said that its margins and last year’s results have been severely affected by the distribution networks of Adrexo Mail, an activity which was launched last year pending deregulation of the postal market in France and Europe. “This important strategic decision was motivated by the lack of clarity and stability of the market,” Phillippe Leoni, CEO of Spir said at a conference. “Spir stresses that given the lag from the date of full liberalization of the postal marketing in France from January 2009 to January 2011, there is uncertainty.”

He added that the group benefited from the difficult experiences of its European competitors in the market for the distribution of addressed mail. Leoni said that Spir chooses to limit the damage, and as a result this activity has generated an operation loss of around 18 million euros in 2007. The closure of Adrexo Mail will result in a total loss of less than 13 million euros in 2008. Spir expects to keep some activities, such as packages and relay letters, which do not depend on the opening of the postal market. This division has weighted on the results of the mail (distribution of printed matter, packages, catalogues, mail), which saw net operation profit plunge from 61.7 percent to 8.6 million errors despite a 23.4 percent increase in turnover of 303.6 million. The group remains confident in its ability to improve its performance in 2008.

Spir said that closing Adrexo Mail will allow a reallocation of resources which confirms the assets itself is the real source of growth for the group. Numerical forecast has not been released, but the company estimates that its prospects were positive in all its business.