Canada Post reports Q2 loss; Transaction Mail volumes record fastest first-half decline since 2006
The Canada Post segment reported a loss before tax of $31 million for the second quarter of 2015, as Transaction Mail volumes fell faster in the first half of the year than in any comparable period since volumes peaked in 2006.
The results were also due to higher employee benefit expenses and partially offset by continued strong growth in the Parcels business.
Transaction Mail volumes fall sharply
Transaction Mail volumes fell by 102 million pieces or 7.2 per cent in the first two quarters of 2015.
This ongoing volume erosion reflects Canadians’ changing needs for postal service.
Transforming our business
We need to outpace the decline in Transaction Mail by completing all the initiatives set out in the Five-Point Action Plan, which will achieve substantial operational savings, and we need to grow our business.
Our e-commerce business continues to grow. Reliable on-time parcel delivery and the innovative solutions we provide for online retailers and customers continue to produce solid growth in our Parcels business.
And we are working hard to grow our Direct Marketing business, which accounts for about one fifth of all the revenue generated by the Canada Post segment. It is a pillar of our growth strategy.
Key results for the Canada Post segment compared to Q2 2014
Transaction Mail
• Revenue fell by $44 million or 5.4 per cent to $779 million
• Volumes fell by 63 million pieces or 6.5 per cent
Parcels
• Revenue rose by $17 million or 4.8 per cent to $370 million
• Volumes increased by more than two million pieces or 6.5 per cent
Direct Marketing
• Revenue fell by $12 million or four per cent to $297 million
• Volumes fell by 17 million pieces or 1.3 per cent
Employee benefit expenses: Significant volatility in employee benefit expenses continues to pose a sizeable financial risk to Canada Post. Costs rose by $59 million in the second quarter mainly because the discount rates used to calculate benefit plan costs declined. Employee benefit expenses are expected to remain higher throughout 2015 than they were in 2014.
• Read the news release or consult the 2015 Q2 report for full details.
2015/08/20
Canada Post reports Q1 profit; Domestic Lettermail volumes decline steeply
Canada Post released its quarterly financial results today.
The Canada Post segment reported a profit before tax of $24 million in the first quarter of 2015, compared to a loss before tax of $27 million for the first quarter of 2014.
The improved results were mainly due to:
• continued growth in the Parcels business; and
• tiered pricing for Transaction Mail;
They were offset by:
• higher employee benefit expenses.
Five-point Action Plan continues to deliver results
The first quarter profit shows the Five-point Action Plan is continuing to deliver results.
• We are expanding our market share in the highly competitive parcels business by creating shipping solutions for online retailers and shoppers.
• The Five-point Plan’s tiered pricing for Transaction Mail helped lift revenue as Domestic Lettermail volumes continued their historic decline.
Ongoing decline in our core business accelerates
Volumes of Domestic Lettermail, still our core business, fell by 8.4 per cent during this period. It is one of the steepest quarterly rates of decline since 2006, when Domestic Lettermail volumes peaked. It reflects the accelerating use of digital alternatives to paper.
The ongoing decline shows we still have a long way to go to create a financially sustainable postal service. We need to outpace the decline in Domestic Lettermail by completing all the initiatives in the Five-point Action Plan.
Our goal remains to secure the future of the postal service for all Canadians. We are heading in the right direction. We are growing our Parcels business and working hard to grow the highly valuable marketing mail business.
Parcels: Parcels revenue rose to $380 million, up $39 million. Volumes increased by more than 4 million pieces, or 6.5 per cent.
Transaction Mail: The decline in Domestic Lettermail volumes was offset by higher revenue from the tiered pricing structure. Transaction Mail revenue grew by $112 million to $889 million.
Direct Marketing Results: Revenue from Direct Marketing rose by $11 million to $298 million. Without three more business days in the first quarter compared to the same period last year, Direct Marketing volumes and revenue declined, but by less than one per cent.
Employee benefit expenses: Significant volatility in employee benefit expenses continues to present a sizeable financial risk to Canada Post. Employee benefit expenses rose by $70 million because the discount rate used to calculate benefit plan costs declined. Employee benefit expenses are expected to remain higher throughout 2015 than they were in 2014.
• Read the news release for full details.
2015/05/21
FlexDelivery service launches opportunity to grow our business
The public launch of Canada Post’s new FlexDelivery service on May 4 says to busy online shoppers: “Because you’re everywhere. And so are we.” FlexDelivery lets customers direct the items they order online to any one of the nearly 6,000 post offices across the country. Only Canada Post can offer online shoppers convenience and control like that. FlexDelivery gives us a unique advantage in the highly competitive parcel delivery business.
Roughly 1 in 3 customers isn’t home during the day to accept delivery of a parcel. With FlexDelivery, they can choose a post office near their home, work, gym or cottage and direct the item for pick up there. They will never miss another delivery.
FlexDelivery’s success will be important to our success as a company. Canada Post already delivers nearly 2 out of every 3 parcels Canadians order online, and parcels will be a huge part of Canada Post’s future.
An integrated marketing campaign includes a TV commercial, Direct Marketing pieces, online ads and placements in newspapers and magazines.
Registering for FlexDelivery is free, simple and fast. Sign up today, if you haven’t already, and spread the word to your friends and family.
2015/05/05
New Canada Post Solutions for Small Business™ program launches
This country’s 1.2 million small- and medium-sized businesses are led by incredibly busy and hard-working entrepreneurs – who tell us they need solutions that save them time and money, as well as help their businesses succeed. Introducing Canada Post Solutions for Small Business! This full suite of products and services will help small and medium-sized businesses do business successfully.
Solutions for Small Business replaces the VentureOne™ program by meeting small businesses’ marketing, e-commerce, shipping and mailing needs. It removes the barriers to doing business with Canada Post, while offering more ways to access program benefits, competitive pricing and incentives that reward these customers for coming back to us with more business.The marketing launch kicks off with a new microsite that explains the solutions on canadapost.ca/whatittakes. Look out for our new TV ad which airs on major English and French television stations and specialty channels. It includes spots on shows like Hockey Night in Canada, NCIS LA and CTV News.
2015/04/28
Thousands of Stores TV ad on air
Canada Post launched Thousands of Stores, the newest ad in the Delivering the Online World campaign. The ad dramatizes how Canada Post brings consumers’ online purchases from thousands of online stores to one convenient Canada Post location.
The ad continues to showcase Canada Post’s iconic red shopping cart, as well as the tagline Delivering the Online World. The new ad focuses on CPC’s leadership in delivering the most parcels in Canada, the convenience of Canada Post’s superior retail network, and setting the stage for the launch of FlexDelivery in May.
The ad airs on major English and French television stations and specialty channels. It includes spots on hit TV series like Grey’s Anatomy, The Amazing Race, La Voix and Unité 9, and high-profile sports shows, among them the broadcasts of five Canadian NHL teams.
2015/04/14