Post group puts its stamp on a solid year

Keystone

Swiss Post has reported a net profit of SFr837 million ($689 million) for 2006, equalling the record income it achieved in 2004.

The company, which is owned by the state, said on Friday that all business areas and units had contributed to the positive result, despite dwindling volumes of letters.

The 2006 profit represents a 3.2 per cent increase or SFr26 million on the previous year.

Operating income was SFr7.895 billion, an increase of five per cent over 2005.

Swiss Post commented in a statement that the results would allow it – as required by the government – to finance its investment programme from its own resources, continue to guarantee a “high-quality basic service” and remain a socially responsible employer.

The company added that it would also eventually be above to finance its pension fund from its own resources.

Restructuring

Swiss Post has been under fire for its restructuring programme, which has been cutting the number of post offices around the country and employees.

In a reaction to the 2006 figures, the transfair union noted the “enormous” profit and demanded that there should be no further job cuts or reduction in salaries.

The Swiss Business Federation (economiesuisse) said it was satisfied with the “spendid” results, noting that this was the ninth year in a row that Swiss Post had been in the black.

In the annual report, that was also published on Friday, chief executive Ulrich Gygi noted that in 2006, Swiss Post processed 1.8 per cent fewer addressed and one per cent unaddressed letters.

“In other words, our dense post office network is not being used to the same extent as in the past.

“Since 2000, 42 per cent fewer letters and 42 per cent fewer parcels were handed in at post offices, and the volume of payments was down by 14 per cent.”

Gygi also pointed out that profit and a simultaneous reduction in headcount did not constitute a contradiction.

“Swiss Post is being increasingly exposed to competition, and technology is making manual work redundant.”

New opportunities

He said it made more sense to seek new business opportunities and to create jobs there, which the company was pursuing.

Swiss Post, affectionately known in Switzerland as the Yellow Giant, said it now intended to support its sustained growth and “enhance its innovativeness”.

With this in mind, it was combining its innovative and electronic new businesses in Switzerland and abroad in a new unit named “Business Customer Solutions”.

The company, which has 2.31 million customers in its PostFinance unit, has been seeking a banking licence, allowing it to compete directly with the cantonal banks.

“We handle a good portion of all the payment transactions in Switzerland. We want to be able to offer these customers the entire range of financial services at attractive and fair conditions,” Gygi said.

“We are prepared to enter the retail market under the same conditions as our competitors. For this we need the appropriate legal basis,” he added.

swissinfo with agencies

Key facts

2006 figures

Operating income: SFr7.895 billion (+5% compared with 2005)
Operating result (Ebit): SFr823 million (SFr805 million in 2005)
Net profit: SFr837 million (SFr811 milion)
Swiss Post Group employees: 42,178(41,073)
Swiss Post delivered 2.76 billion letters in 2006 compared with 2.81 billion the previous year.

In brief

In November 2006, Swiss Post announced it was slashing 500 jobs as part of its restructuring programme.

Hundreds of postal workers took to the streets in several cities against the reforms and unions threatened to disrupt the deliveries.

At the end of the year, unions and the post office’s management agreed that all 500 job cuts would be achieved through natural attrition over the next two years.

Swiss Post

PostMail delivers 15 million letters a day – from greetings cards and love letters to business correspondence, direct marketing letters and newspapers.

PostFinance is a retail financial institution that has a market share of 60%, making it the undisputed leader in the Swiss payments market.

PostBus, a wholly owned subsidiary, has a network covering 12,268 kilometres and carries more than 106 million passengers a year.

There are 2,493 post offices in Switzerland – one of the densest networks in the world. There were 2,531 at the end of 2005.

The Philately unit issues about 40 new stamps a year.