Implementation of strategy not fast enough for Cirillo
The postal service considers itself only halfway through its strategy to modernize the company. In a press conference on Tuesday, Post CEO Roberto Cirillo noted that progress in opening up the postal network to other services has been modest and that there are too few new investment opportunities.
"We are not moving fast enough in implementing our strategy," Cirillo said. The postal strategy focuses on services in the communications and logistics sectors. The postal network, for example, is to be used more broadly as a service center.
This network opening with currently only four partners took longer than planned, Cirillo said. One reason for this, he said, was that all possible interested parties had to be given an equal chance during the awarding process and had to be informed accordingly. That took about a year, he said.
Full investment fund
The transformation of Swiss Post is taking place through investments and divestments, organic growth, efficiency improvements and price adjustments. However, due to construction delays or problems with permits, these investments are taking longer than planned. "We have enough funds in the coffers. The challenge is not to have found enough investment opportunities," the Post boss said.
"We can't grow as fast as we need to in order to compensate for declining volumes in the mail business. We will have to accelerate and continue to develop useful services for the population and do it in a sustainable and self-sustaining way," Cirillo said.
Society, but especially business customers, where 90 percent of sales are generated, are putting increasing pressure on Swiss Post to become more sustainable. In the next few months, the cities of Bern and Zurich are to be supplied completely CO2-free and by the beginning of 2025, all major Swiss cities, Cirillo announced.
Offsetting inflation with efficiency gains
Another major challenge for Swiss Post is inflation. The Group has a very large cost base, a small-margin business and does not have full control over its own prices. It will therefore need to increase its own efficiency to compensate for inflation.
Nevertheless, Cirillo announced that 2022 will be a fairly good year for the Post, with stable sales. He said the Post will have to endure inflationary pressures during a transition period, and that will put pressure on 2023 earnings. From 2025, digital services should contribute to profits. (SDA)
