After a very encouraging first half of the year, Swiss Post’s result up to the end of the third quarter was less strong, as expected. The Group result (EBIT) stood at 345 million francs as at the end of September, up by 2 million on the figure for 2021. The quarterly result reflects lower letter and parcel volumes than in 2021, as well as the impact of key interest rate changes on PostFinance. At 288 million francs, Group profit was down by 82 million on 2021. This was mainly due to tax effects. Swiss Post offset lower income in its core market of logistics with income from other Group companies and subsidiaries.

Swiss Post’s result over the first nine months of 2022 was impacted by a challenging economic and geopolitical situation. This situation led to very high inflation and, as a response, two interest rate hikes by the Swiss National Bank (SNB). Various uncertainties, such as interruptions to global supply chains, also had an effect on the result. At the end of September, operating profit (EBIT) stood at 345 million francs, 2 million francs higher than in the previous year. Group profit came in at 288 million francs, 82 million francs lower than in 2021. However, this decrease was primarily due to tax effects. Operating income (revenue) stood at 5,074 million francs in the first nine months of 2022, which was 61 million francs above the previous year’s figure.

Impact of high fuel prices and lower letter and parcel volumes evident

The Logistics Services unit once again made the greatest contribution to Swiss Post’s Group result. Operating profit (EBIT) of 278 million francs had been generated by the end of September, which is 50 million francs less than in the previous year. Alex Glanzmann, Head of Finance and a member of Swiss Post Executive Management, says: “As expected, the challenges intensified during the second half of the year in comparison with the very encouraging first half. The pressure on margins and prices in the logistics business has continued to increase due to sharp rises in energy, fuel and raw material costs. This had a major impact.” Swiss Post is bearing the additional costs for fuel and energy from its own resources in 2022. As previously announced, it will not start passing on a share of the additional costs for parcels to business customers until 2023. However, it will continue bearing over half of the additional costs itself.

Lower letter and parcel volumes also had an effect on the result. By the end of September, Swiss Post employees had sorted and delivered 1,279 million letters, which represents a decline of 3 percent. Letter prices were adjusted in early 2022, but this change only partly offset the decrease. Parcel volumes also fell year-on-year, dropping by 3.6 percent and amounting to 140 million at the end of September. This decrease is explained by generally downbeat consumer confidence and the lifting of measures to tackle COVID-19 – with people increasingly shopping in stores again over recent months. However, parcel volumes in October 2022 were up by 30 percent compared with October 2019 (in other words, before the pandemic). For this reason, Swiss Post is still forecasting higher parcel volumes in the long term. It is also continuing to invest in its infrastructure – for example, it will open a new regional parcel center in Pratteln (BL) in 2023. 

Key rate hikes impact on PostFinance’s result

PostFinance also made a substantial contribution to the quarterly result. By the end of September 2022, operating profit (EBIT) had reached 218 million francs, an increase of 46 million year-on-year. “The key interest rate trend had an impact on PostFinance’s performance,” explains Alex Glanzmann, Head of Finance at Swiss Post. ​The two interest rate hikes by the SNB on 17 June and 23 September 2022 to +0.5 percent resulted in much lower income from the interbank money market and customer asset fees. By contrast, interest on assets at SNB had a positive effect – although this income did not manage to offset the loss of income from negative interest rates. PostFinance welcomes the return to positive interest rates, which is also in the interests of its customers. Long-term interest rates on the capital market have also risen sharply over recent months, which is why PostFinance once again expects higher income in the medium term. Alex Glanzmann says: “This is a positive development for PostFinance’s business model. But the recovery will be gradual and its effect delayed.” Higher income from the commission business and services also contributed to PostFinance’s success. This was due to the banking package fees introduced for private customers in 2021, the expansion of investment solutions and a rise in revenue from credit cards.

“The right strategic course has been set”

“The environment remains uncertain, and exactly how this will affect Swiss Post is very difficult to predict,” says Alex Glanzmann, Head of Finance at Swiss Post. “That’s why it’s vital that our strategy is implemented consistently, as the right course has been set. The acquisition of new subsidiaries is helping us to generate new income. In 2022, we also opened two more regional parcel centers in Buchs (AG) and Rümlang, acquired four major partners for our branches and defined an even more ambitious climate and energy target. We’re on the right track with our strategy,” says Alex Glanzmann.

Swiss Post is continually adapting to customer requirements through targeted investment, such as in new digital solutions. In addition, it is continuing to develop the Communication Services unit. This meant that the operating result for this unit was negative over the first nine months of 2022, as expected. However, it has improved by 3 million francs to –54 million francs and therefore lies within the defined investment plan. More efficient planning in the PostalNetwork unit also meant that its operating result increased by 6 million francs to –59 million francs, despite the fact that people are conducting fewer transactions over the counter each year. For example, customer payments at Swiss Post branches fell by 13 percent compared with 2021. At PostBus, demand also continued to recover during the third quarter. 117 million passengers had used Postbuses by the end of September, an increase of 14.5 percent on the same period in the previous year.