Competitor Watch

Several of our listed postal peers have updated the market on their first quarter financial performance, also highlighting emerging trends due to the covid-19 pandemic.

Deutsche Post DHL (DP DHL) is seeing signs that business is ‘normalising’ in Europe, but the pandemic continues to weigh on its financial results. In line with preliminary figures released last month, Group revenue rose 0.9 per cent to €15.5bn in the quarter to the end of March, while operating profit almost halved to €592m, including a €210m hit due to covid-19.

In the Post & Parcel division, mail volumes fell 6.8 per cent, but revenues increased 2.3 per cent to €2.1bn, thanks to higher prices. The letters volume decline has continued in April, mainly due to reduced marketing activity. German parcels volumes for the quarter rose 3.3 per cent to 346m items, while revenue was up 9.9 per cent to €1.26bn. Strong growth in the last week of March continued into April, with the company hiring 4,000 additional staff, mainly in delivery, but also some in sorting centres.

DHL Express saw fluctuating volumes in the first three months of the year but revenue increased by 4.5 per cent to €4.15bn. Express shipments in Europe and China have shown signs of recovery in April, but the company cautioned that given the high level of uncertainty, it remains to be seen whether these developments are now really the beginning of a sustainable trend.

DP DHL is preparing for a ramp-up in activity in sectors that have been affected, but it is also preparing for a potential second virus wave.

Austrian Post is benefitting from its partnership with DP DHL, with 24 per cent parcels revenue growth in the January to March quarter. Overall revenue increased 2.1 per cent to €503m, but profits fell 42 per cent to €33.3m due to covid-19 measures and start-up costs for its new ‘bank99’ subsidiary. Letters revenue fell 4.6 per cent to €317m on a 4-5 per cent fall in addressed letters and a 9 per cent decline in advertising mail.

Austrian Post said that further developments of the pandemic, government measures and the way and extent to which the economy rebounds will all have a direct impact on the company’s further business development in 2020.

Poste Italiane overall revenues fell 3 per cent to €2.76bn, while profits fell 28.6 per cent to €441m on lower revenues impacted by lockdown and one-off costs to face the emergency.

The company said that recent trends confirm its strategic direction of: increased customer engagement via digital channels; stronger e-commerce growth and accelerated e-substitution; and business diversification. In the immediate period following lockdown, parcels revenue grew 32 per cent, with volume peaks comparable to Black Friday and Christmas periods. The contribution from China inbound parcels doubled, and this will be a key focus for the business going forward. Mail volumes fell 31 per cent over the same period, largely due to cancelled direct mail campaigns and suspension of the recorded mail product.