La Poste sees small growth in revenue for 2010

French operator La Poste has revealed a revenue growth of 2% for the 2010. Revenue totalled EUR 20.9bn, of which EUR 11.53bn came from the Mail business and its subsidiaries, down 1.2% at constant structure and exchange rates.

Operating profit also grew, up 3.5% to EUR 784m, whilst the post declared an EBITDA of EUR 2.03bn, an increase of 9.1% against 2009 levels.

The results were revealed at a La Poste board meeting on Thursday, chaired by company head Jean-Paul Bailly. He thanked and paid tribute to postal workers for their daily commitment and major contribution to customer service and Group modernisation.

Bailly also revealed the payment of incentive bonuses totalling EUR 60m to staff, equating to EUR 245 per individual.

The decrease in Mail volume remains significant but did slow in 2010 (economic volumes down 3.5%, compared with a 5% decline in 2009). This average figure reflects contrasting trends across the various mail segments (-6.7% for private mail, -4% for the press, -0.8% for registered letters and advertising mail).

The Sofipost holding company increased revenue by 4% over the previous year, to EUR 938m (up 2.6% at constant structure and exchange rates). In 2010, the advertising sales agency Mediapost Publicité was created as part of Sofipost. The year also saw the acquisition of Sogec.

La Poste said the Parcels/Express segment recorded revenue of EUR 4.84bn, up 6.3% at constant structure and exchange rates.

In the French and European Express segment, GeoPost generated revenue of EUR 3.4bn, up 7.3% at constant structure and exchange rates in a highly competitive market.

The impact of the 9.8% increase in volumes (mainly in Germany, the United Kingdom and France) was softened by an average negative price effect of -3.9%. ColiPoste’s revenue was EUR 1.44bn in 2010, up 4% compared to 2009. Volumes grew 2.7%, mainly due to the upturn in mail order house activity. Revenue from e-commerce was up 11% on the previous year.

La Banque Postale continued to grow in 2010, currently boasting more than 10m active customers, and reported consolidated net banking income of EUR 5.2bn.

The increase in credit outstanding exceeded EUR 6.1bn at the end of December, with more than EUR 10bn of home loan issuance, and consumer loans distributed for the first time in 2010.

Customer funds in savings and sight deposit accounts were up by EUR 6.2bn at the end of December, as withdrawals from Livret A and LEP accounts were offset by positive new money collection for home ownership savings, life insurance and sight deposit accounts.

Net banking income was up 3.9% (4.9% excluding extraordinary items). This increase resulted from the strength of household lending activity and the continued rise in the number of products per customer. La Banque Postale also remains the cheapest bank on the market.

In 2010, the Retail Brand again played a key role by distributing the Group’s business products to the general public through its 17,079 outlets. Its network (post offices and facilities operated through partnerships) generated revenue of EUR 2.483bn, down 2.3%.

But with more than EUR 1bn of new money collection and over EUR 10bn of loan production for La Banque Postale, the banking business saw steady growth across the network.

As in 2009, La Poste managed to “significantly” cut the average waiting time at its 1,000 largest post offices. For example, for depositing and collecting mail and parcels, which account for nearly half of all transactions, the waiting time fell from 6 minutes and 50 seconds at the end of 2008 to 4 minutes and 30 seconds at the end of 2009 and 3 minutes and 20 seconds at the end of 2010.

Running costs were up 2.4% at constant structure and exchange rates. Costs in the Parcels/Express segment increased in line with business levels, while those of La Banque Postale included expenses incurred on the launch of new operations (mainly consumer loans and general insurance).

The other businesses and their support services saved EUR 90m relative to the previous year. Employee benefit and payroll expenses were also up 0.6% over the year. Provisions for the various retirement schemes were discounted to take into account the higher legal age of retirement.

Given these extraordinary expenses, a standard measure of the Group’s operational performance between 2009 and 2010 is the change in EBITDA. This reached EUR 2.037bn in 2010, up EUR 170m on 2009.

The Group’s consolidated operating profit amounted to EUR 784m, reflecting a stable operating margin of 3.7% of revenue and profitability for all businesses.

Mail recorded consolidated operating profit of EUR 149m. Despite a further drop in the volume of mail handled, the mail business still enjoys a positive operating margin.

Consolidated operating profit for the Parcels/Express segment was EUR 336m in 2010. The operating profit margin reached 6.9% of revenue.

The contribution from the banking business to the Group’s operating profit was EUR 730m, with the cost-to-income ratio improving by 1.5 points (2.5 points excluding extraordinary items) to 85.1%.

After taking into account net finance income and expenses and the EUR 195m contribution from CNP Assurances, the Group share of net profit for the year amounted to EUR 550m.

This result enables La Poste to propose the approval of a dividend payout of EUR 136m at its next General Meeting.

The Group invested EUR 1.06bn in 2010. Industrial and commercial investments accounted for EUR 777m of this total. In particular, four new industrial mail platforms were opened and the Group continued to modernise its post offices.

Since 2008, a total of 660 post offices have been renovated, including 620 of the 1,000 busiest post offices.

For its part, La Banque Postale invested EUR 215m, mainly in its information systems. Over the year, EUR 73m was spent on acquisitions, especially in the Mail business (taking over Sogec, a relationship marketing company, and buying out minority interests in Mediapost SA and Sefas Innovation).

The Group’s consolidated equity came to EUR 4.5bn at 31 December 2010, which helped bring the net debt to equity ratio down to 1.08, from 1.36 a year earlier. The net debt to EBITDA ratio was 2.36 at the end of 2010.

2011 will see the execution of the EUR 2.7bn capital increase decided at the end of 2008 and made possible by the Act of 9 February 2010.

The first tranche of EUR 1.05bn will be paid up in April. Caisse des Dépôts will sit on the Board of Directors from the second quarter onwards.

Against the backdrop of market conditions still affected by declining mail volume and uncertainty about the financial and banking environment, the Group forecasts stable consolidated revenue along with an operating margin greater than 3% of revenue, exceeding the targets indicated in the 2010-2015 plan. The Group will continue its modernisation work with a EUR 1.3bn investment programme.

The capital increase and the achievement of its operational targets will enable La Poste to significantly improve the quality of its balance sheet – the gauge of its strategic ambition – to consolidate its business and social model and to accelerate innovation and development, the company said.