Disappointing results for La Poste
The French mail company La Poste now seems to be paying the price for the ambitious expansion course which CEP subsidiary GeoPost has steered in recent years. GeoPost is a holding company which groups together the activities of La Poste outside France. The service
provider is active in the parcel, express and logistics sectors. La Poste president Martin Vial puts the blame for the deficit, the first which the group has suffered in five years, squarely on the GeoPost subsidiary.
A loss rather than the expected profit
With overall sales of EUR 17.03 billion (6.6% more than in 2000) La Poste would have made a modest profit of EUR 75 million, but in view of the EUR 170 million of extraordinary write-downs on new acquisitions by GeoPost, the bottom line result was a loss of EUR 95 million. In 2000, the company registered a profit of EUR 139.2 million and in 1999, profit was no less than EUR 283.6 million.
<> emphasised Vial. He justified the high cost of the growth strategy which has
been pursued by the group since 1996 with the tough competition among European mail companies in the parcel and express sector and in the logistics industry. Thus the majority stake in the German DPD (Deutscher Paket Dienst GmbH) alone cost EUR 457 million. In addition, the takeover of a 67% share of the DPD France cost EUR 21 million. GeoPost’s revenue in 2001 was EUR 2.94 billion, 30.8% more than for the previous year. Discounting acquisitions, the growth rate in revenue was 3.4%. Parcel and express services, and logistics thus represent 17% of the La Poste group’s total turnover.
President Martin Vial was proud that La Poste’s parcel services, whose turnover has trebled since 1996 and holds a market share of 10%, was in third place in Europe today be-
hind Deutsche Post and the Dutch TPG. After a spate of acquisitions, GeoPost now focusing on internal restructuring. It intends to be back in the black by the end of this financial year with a return of 2% on turnover.
GeoPost open to new partners
Today GeoPost, with a capitalisation of EUR 900 million, remains open to new partnerships. Rumours that GeoPost was working towards an alliance in the logistics sector with the Calberson division of the Geodis Group, and in return would get access to financial resources of the recently recapitalised Geodis Group, were neither confirmed nor denied by Martin Vial. So as to deflect any criticism that his group — which, by the way, has repackaged its public image with a new logo — was financing generous
<> from the income from its national mail monopoly, Vial pointed out that the group already generated 56% of its sales in the private sector of the economy and that the liberalisation of the letters market ordered by Brussels was making progress. The mail monopoly will accordingly be restricted on January 1, 2003 to shipments weighing up to 100 grams, from 2006 to 50 grams, and in 2009 the monopoly will be totally abolished. Martin Vial went on to say that La Poste, which showed the best results for customer satisfaction in a comparative survey of European mail service providers, spent EUR 1.2 billion per year on <>. This includes for example keeping post offices open in thinly populated rural areas, which, from a purely economic viewpoint, should have been closed long ago.
