France’s La Poste reported a decent set of financial results for 2017, thanks to new initiatives that propelled a group level growth rate above European inflation.
Sales rose 3.5% to €24.1bn, while operating earnings grew 3.8%, hitting $1bn for the year. However, net profit was essentially flat at €851m (+0.3%) while net debt, at €3.8bn, rose mildly on a comparable basis. At constant scope and exchange rates, revenues and operating income were up 2.5% and 6.4%, respectively, while net profit growth was unaffected.
La Poste said a “good performance” reflected a commitment “to its development and to cost control” and came in the wake of the strength shown by its core Services-Mail-Parcels unit, which was helped by the surge in new services and an increase in parcels.
“The significant development of both the Express (GeoPost) and the Digital Services business units, and the good performance of the activities of La Banque Postale”, also contributed to positive results, it added.
The Services-Mail-Parcels unit – which at €11.4bn last year accounted for 47.3% of total revenues – grew 0.6%, after a 1% growth rate in the prior year.
Mail revenue remained under pressure due to the structural decline in volumes (down 6.8%), but was offset by several positive items, including tariff increases, rising international flows and the stabilisation of advertising mail.
Local services have stepped up, it said, driven by growth in new and existing activities, while revenue from parcels rose 5.4% to €1.74bn thanks to higher volumes (up 8.1%), which hit a record high of 318 million parcels last year – essentially domestic B2C flows.
GeoPost, its second-largest revenue contributor, confirmed the solid trailing growth trends witnessed in 2016, but it achieved less profitable growth than in the prior year, with EBIT margin down 79 basis points to 6.3% from 7.1% in 2016. Thanks to core activities in the deferred express B2B and B2C markets, the division grew 10.5%, generating a turnover of €6.8bn against €6.1bn in 2016. Volumes surged, with 1,228 million parcels delivered, up 9.8% compared to 2016, while fuel surcharges and a slightly positive pricing also positively contributed to the mix.
Finally, its banking activities recorded €5.7bn in revenues, up 1.5% on a comparable basis.
The Services-Mail-Parcels division generated €600m (+2.7%) of operating income; GeoPost was responsible for €430m (-1.8%) of EBIT; the operating profit of La Banque Postale came in at €870m (+4.4%); and there were €889m of eliminations and losses that had to be considered.
The group invested €1.35bn, while €677m were devoted to external growth via acquisitions and equity investments, which determined higher cash outlays on a comparable basis. La Poste anticipates moderate revenue growth in 2018 as well as steady operating profits.
Source: Transport Intelligence, February 20, 2018
Author: Alessandro Pasetti
