La Poste records solid growth in the face of growing uncertainty

La Poste

The annual results of France’s La Poste, which were released on 23rd February, showed a 4% increase in consolidated revenue and rising operating income, yet the outlook remains uncertain as competition intensifies.

The group said that it continues to operate in an economic environment that remains difficult due to rapidly “declining mail volumes, dwindling post office visits and persistent, historically low interest rates”.

There is also the looming question of Amazon’s next move – it bought a 25% stake in French parcel delivery Colis Privé in 2014 and recent reports have said it is close to acquiring the remainder of the company.

Presenting La Poste’s annual results, chief executive Philippe Wahl said that Amazon was morphing from being La Poste’s biggest customer to becoming its largest competitor.

The success of its business plan – which is labelled “La Poste 2020: Conquering the Future” – hinges on the performance of its vast portfolio of assets, which includes postal and banking operations, among others.

In this context, 2015 revenue for the core services, mail and parcels division increased just less than 1% to €11.4bn at constant exchange rates.

Mail revenues were flat at €9.3bn last year; the average 7% price increase that took place on 1 January 2015 offset “almost all the drop in addressed mail volumes,” it noted, adding that the development of services offered by postmen, who are now equipped with Facteo smartphones, helped increase sales.

Meanwhile, parcels revenue grew 2.3% to €1.6bn in a “highly competitive environment”; the increase in volumes (+1.6% compared to -2.7% in 2014 for B2C only) was made possible by a strategy aimed at winning back market share. Price increases as well as changes in export product mix also provided a helping hand.

Viapost and Mediapost, La Poste’s smaller subsidiaries operating in the logistics market and the unaddressed advertising mail market respectively, registered better results. Due to aggressive sales policies, revenue reached €525m and beating European inflation by several basis points.

Elsewhere, revenue for the GeoPost business unit, which covers the deferred express B2B and B2C markets in France and abroad, continued to register a remarkably strong growth rate which totalled €5.6bn. Good volume-led performances especially in the UK, Benelux, Spain, Poland and Germany were also noted. In addition, B2C share continued to rise and now accounts for 30% of volumes, even though the segment “had a slightly unfavourable price/mix effect.”

The year was characterised by rolling out home delivery services and out-of-home delivery services as well as increasing handling capacities, particularly with the launch of a new hub in Birmingham that began operations in September.

Finally, the La Banque Postale division, which includes banking, asset management and insurance businesses, recorded €5.7bn in net banking income and grew slightly above inflation.

At group level, rising sales helped the group register a significantly higher level of operating profitability, up from 3.2% in 2014 to 3.8% in 2015. Operating income rose 21.6% to €875m at constant scope and exchange rates while net debt declined almost €400m to €3.6bn.

Source: Transport Intelligence, 4th March 2016

Author: Alessandro Pasetti

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