Where at French postal operator and international parcel carrier Le Groupe La Poste on the surface had a bumper year in terms of operating profit, a look under the hood suggests a more modest affair. At a Group level, non-recurring items accounted for the majority of the 75.6% y-o-y operating profit growth. Including non-recurring items operating profit grew to €2,950m but on pure operations the overall growth was still strong at 15.8% y-o-y to €1,946m. Revenues were up 1.5% to €34,569m.
Geopost – non-recurring items inflate profits
The international parcel carrier segment of La Poste, Geopost reported an almost 124% y-o-y increase in profits to €624m despite a notable revenue per parcel y-o-y fall of 1.6% to €7.38.
La Poste stated “Excluding material non-recurring items, Geopost’s profit decreased by €98m on a like-for-like basis.” This equates to a real-world drop of 35.1% y-o-y. The non-recurring items included:
– The sale of same-day delivery company Stuart that benefitted operating profit by €74m
– Currency exchange benefits added €10m
– Sale of Chronopost’s Massy depot added €19m
The company also appears to be taking on less profitable parcels, with its B2C share increasing to 61.6% from 59.1% in 2023. This may well point in part to the fall in revenue per piece. Among other operational highlights Geopost had:
– 25% growth of out-of-home delivery
– 6.7% growth of intra-European cross-border home deliveries
– 23.8% growth in volume of Geopost’s temperature controlled food delivery services, that may improve margins into the future
Yves Delmas, CEO of Geopost said, “We have strengthened our hybrid model, maintaining a balanced share of B2B and B2C revenue and have capitalised on the dynamic growth of our strategic segments, out-of-home, international, and food services under controlled temperature.”
La Poste transitions away from mail
The USO postal operator segment of La Poste, Service-Mail-Parcels saw a very sharp fall in profits, from €1m in 2023 to a loss of €138m in 2024 on revenues that increased 0.6% to €10,064m. Among the data, mail operations operating profit fell by €167m, offset by a €26m increase in its domestic parcel carrier arm Colissimo. While mail volumes continued to decline in the segment, parcel volumes grew, following global trends in the industry.
Chairman of the Board of La Poste Philippe Wahl pointed out, “Mail now accounts for 15.8% of our overall revenues compared to 52% in 2010,” continuing, “Despite fierce competition… parcel deliveries now account for 53% of our revenues compared with 23% in 2010.”
Non-recurring profits for the benefit of society?
The benefit of non-recurring items boosting profits is by its nature a non-recurring event. Such real-world falls in operating profit reflect a general softness in the wider European economies, and with the global geopolitical uncertainties keeping people’s wallets buttoned, there is no immediate end in sight.
A final word from Wahl suggests that profit is not the whole picture: “La Poste Group’s mission is to be a committed, profitable and responsible group, and going forward it intends to pursue its growth trajectory, backed by its [two] shareholders – Caisse des Dépôts and the French State – for the benefit of society as a whole.” Society as a whole does not benefit from a purely profit making enterprise but more one with an eye on its welfare. Perhaps more companies should follow?
Author – Richard Shrubb
Source: Ti Insight
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