La Poste to invest €8bn in business growth and acquisitions up to 2020

La Poste to invest €8bn in business growth and acquisitions up to 2020

La Poste will invest about EUR 6bn in its business and set aside EUR 2bn for acquisitions over the next six years, it said last week. Philippe Wahl, chairman and chief executive of the French national postal operator, presented plans to the board on Thursday for how he will push the company to achieve a EUR 25bn turnover by 2020, year-on-year growth of 2% and a group operating profit of EUR 1.9bn excluding the impact of acquisitions.

The plan called for the acceleration of the company’s development of its current business and the expansion into “new territories”.

The Group will also look to reduce its operational costs, and as part of this continue to adapt to the changing postal business.

La Poste will also look to take more advantage of synergies between its five divisions — the post office network, the mail and parcels division, postal bank La Banque Postale, digital mail activities and the international express parcels business GeoPost.

This synergy approach is being taken forward through five priority projects, on e-commerce, urban logistics, the modernisation of public policy, an energy transformation project and the sharing of customer intelligence.

Wahl, who took over has chief at La Poste last September, is planning to invest billions in the Group itself, and in acquisitions, in order to reach the financial goals for 2020.

State-owned La Poste Group achieved a EUR22.08bn turnover in 2013 delivering 25bn items in 40 countries around the world, with about 17% of turnover stemming from international business. The company has a workforce of about 266,000 employees and a network of 17,000 customer access outlets.

As he laid out his financial targets for the Group last week, as part of the overall “La Poste 2020: Winning the Future” strategy, Wahl laid out targets for the Group’s divisions going forward.

Delivery

The mail and parcels division will look to develop new services in the field of home delivery to become the benchmark for e-commerce services and a “major player” in the provision of urban logistics.

La Poste will look to improve its offerings for the direct mail market and “simplify French life” by developing innovative new services through the range of delivery services for documents and merchandise – such as the use of individual household parcel boxes, and better choice in delivery times for household parcels.

The French national postal operator is expecting its mail volumes to decline by between 6% and 7% a year up to 2020, but aims to contain the decline, and maintain a EUR 400m operating profit for the division, with new innovations and the development of the parcels business, along with whatever postal rate increases are allowed by regulator ARCEP.

GeoPost

International express parcels subsidiary GeoPost will look to strengthen its position in the express market in France and develop its combined B2C and B2B network in Europe, according to Wahl’s new strategy.

La Poste said its GeoPost subsidiary would also aim to replicate its European business model in other key regions of the world.

Meanwhile, the company — which operates under brands including DPD — will continue to upgrade its existing services through more “interactive” delivery features, along with the kind of innovations that have seen Sunday deliveries added to UK services, returns solutions launched in Germany, and a major network of automated parcel terminals developed in partnership with Neopost.

Elsewhere, La Poste aims to expand customer access in its post office network, particularly in urban areas and through retail partnerships in rural areas, developing new retail formats including dedicated zones for business customers.

La Banque Postale will step up its development in all markets, for consumers, businesses and local communities, with a significant investment plan in place to take forward its digital activities and bring together its various separate channels. The postal bank has targets to reach a EUR 7bn turnover and year-on-year growth of 3.3% by 2020, achieving an operating profit of EUR 1.5bn that year.

La Poste’s newly-created digital division aims to grow its turnover by 35% up to 2020, excluding acquisitions, to more than EUR 600m, with operating profit reaching EUR 65m in that year. Its strategy focuses in three main areas — improving customer communications, simplifying life for the online consumer, and the launch of a digital platform for small businesses.

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