La Poste records double-digit drop in profits for 2008
La Poste has unveiled a dramatic slump in profits and revenues for 2008 along with declining mail volumes due to the tremendous impact of the economic crisis, according to the company’s CEO Jean-Paul Bailly.
La Poste has unveiled a dramatic slump in profits and revenues for 2008 along with declining mail volumes due to the tremendous impact of the economic crisis, according to the company’s CEO Jean-Paul Bailly.
The French postal group experienced a double-digit drop of 32% in its operating profit which declined to €886m last year (-22% on a like-for-like basis). This represented an operating profit margin of only 4.3%, down two percentage points. The net profit decreased even more dramatically by 44% (-30% on a like-for-like basis) to €529m.
Turnover remained stable, increasing fractionally 0.2% to €20.8bn with an organic growth of 1.8% ((on a like-for-like basis).
In the express and parcels sector, La Poste increased revenues by 7.1% to €4.7bn, thanks to the positive development of Chronopost in France, a further expansion of business activities in Eastern Europe and good domestic growth in the UK and Germany. The separate French domestic parcels business ColiPoste increased revenues by 6.1%, boosted by the growing e-commerce.
However, mail revenues decreased by 1.8% to €11.3bn along with a 3% drop in volumes. Volumes for January/February 2009 showed a further 5% decline over 2008 caused by increasing electronic communication replacing letters and economic recession impacting on direct marketing programmes. Revenues from financial services went up 1.3% to €4.77bn, making it La Poste’s second largest business.
“We were strongly impacted by the intensity of the economic crisis,” said La Poste CEO Jean-Paul Bailly. “Nevertheless, our unique model in Europe based on diversified sectors and channels along with the plan of voluntary economy implemented since 1 September 2008, give us good financial resistance,” he added.
The company has invested a total of €1.38bn in the development of its business activities. Of this, €163m was designed for external growth primarily focusing on the diversification of mail activities, in particular document management as well as expanding its international mail business through acquisitions in the UK, Portugal and Spain.
From the remaining €1.19bn, the internal investment comprises the implementation of the Group’s modernisation programme in all sectors, with 9 state-of-the art mail depots currently operating and 18 others due to be opened in 2009 along with 521 post offices renovated in 2008. This brings the total number of offices renovated since 2006 to 2500.
In 2009, the first two months reflected an even stronger drawback in business activity than expected mainly impacting the mail and parcels volumes of the company.
In this difficult context, the Group said it will expand its operational measures to maintain its operating profit margin with two programmes planned in 2009. The first one is targeted at reducing operational expenses while the second one focuses on the optimisation of the Group’s cash flow.
La Poste added that it is concentrating on the development of its four sectors while their complementarity will help the company to better endure the crisis while further improving the service quality for customers.
