Österreichische Post AG

EANS-Adhoc: Österreichische Post AG
AUSTRIAN POST Q1 2012: Revenue growth (+6.0%) and earnings improvement (EBITDA +7.0%) in Q1; outlook confirmed for 2012

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3-month report

16.05.2012

- Increased revenue
  - Revenue up 6.0% above the prior-year quarter
  - Good development in the mail and parcel segments  
- Further earnings improvement 
  - EBITDA rise of 7.0% to EUR 75.8m
  - EBIT up to EUR 55.8m
- Strong cash flow and solid balance sheet 
  - Free cash flow of EUR 51.2m  
  - Equity ratio increased to 43.4%
- Outlook for 2012 confirmed
  - Stable or slightly rising revenue 
  - EBITDA margin within the targeted range of 10-12% and further EBIT
improvement

OVERVIEW OF AUSTRIAN POST
The first quarter of the 2012 financial year proceeded very satisfactorily for
Austrian Post in both the parcel and mail segments. Against the backdrop of
generally dampened economic expectations in Austria and neighbouring countries,
the postal business continues to be mainly impacted by postal-specific trends.
Structural changes arise as a result of electronic substitution of addressed
letters as well as the positive impetus on parcel shipment volumes provided by
online business. 
In the first three months of 2012, total revenue of Austrian Post rose by 6.0%
to EUR 605.7m. The newly established Mail & Branch Network Division posted an
increase of 6.2%. The revenue of the Parcel & Logistics Division was up by 5.9%,
and even by 6.6% if the subsidiaries in the Benelux, which Austrian Post is
currently disposing of, are excluded. In addition to a generally solid volume
development, special effects also contributed to this good development. An
additional working day compared to the first quarter of 2011, along with new
information requirements on the part of customers in the finance,
telecommunications and energy sectors, resulted in volume growth. Furthermore,
the changed product portfolio offered by Austrian Post led to a shift from
addressed direct mail items to higher quality letter mail products.

"The earnings posted in this quarter once again demonstrated Austrian Post's
success in consistently focusing its business operations on the four strategic
priorities it has defined. Group EBITDA increased by 7.0% to EUR 75.8m", says
Austrian Post CEO Georg Pölzl. We confirm our original outlook for 2012 based on
these quarterly results, with annual revenue expected to remain stable or
increase slightly on a comparable basis. At the same time, the company is
pursuing the goal of improving EBIT for the year.   
"We had a good start in the year 2012 as a result of a consistently pursued
corporate strategy. For this reason, we will continue on our chosen path of
further developing the Group", Georg Pölzl adds. "We cannot compensate for the
ongoing trend towards declining addressed letter mail volumes only by increasing
the number of parcel shipments. Improving the efficiency and cost structure is
just as important for the success of the company as optimising service quality
on behalf of our customers."                                                    
                             
REVENUE DEVELOPMENT IN DETAIL

In the first quarter of 2012, Austrian Post succeeded in increasing its total
revenue by 6.0% to EUR 605.7m. A generally solid volume development contributed
to the revenue improvement, along with positive special effects in the letter
mail segment and an additional working day compared to the prior-year quarter. 
Revenue in the Mail & Branch Network Division rose by 6.2% to EUR 385.0m. The
trend towards declining letter mail volumes caused by electronic substitution
was more than offset by positive special effects, namely new information
requirements on the part of customers in the finance, telecommunications and
energy sectors with positive implications on volumes. Moreover, the changed
product portfolio offered by Austrian Post resulted in a volume shift from
direct mail items to higher quality letter mail products and from parcel to
letter mail items in the field of online shopping. In addition, new services in
the Mail Solutions segment such as mailroom management contributed to growth. 
The former Branch Network Division is now encompassed in the business area
"Branch Services" in the Mail & Branch Network Division. Revenue and costs in
the new management structure developed as planned. On balance, Austrian Post
featured a total of 1,878 postal service points as at March 31, 2012, of which
1,266 are third-party operated postal partner offices.      
Revenue in the Parcel & Logistics Division increased by 5.9% to EUR 220.8m. From
a regional perspective, the Austrian parcel market generated the highest growth,
followed by a good revenue development in Germany. In the first quarter, revenue
of the disposed Benelux subsidiaries is still included in the income statement
for the most part. The Dutch company was deconsolidated as at March 15, 2012. 

INCOME STATEMENT
Revenue growth of 6.0% to EUR 605.7m also affected operating expenses for raw
materials, consumables and services used, which rose by 4.4%, to EUR 190.9m.
Higher costs related to increased purchases of external transport services as
well as higher commissions for postal partner offices, amongst other factors,
resulted as a consequence of the structural transformation of the branch
network. 
Staff costs rose by 6.6% in a quarterly comparison, or EUR 17.7m, to EUR 284.4m.
This increase is primarily due to higher non-operational staff costs. In
contrast, operational staff costs remained largely constant during the same
period. The average number of employees in the Group declined by 268 compared to
the prior-year period to 22,998 employees (full-time equivalents). 
Non-operational staff costs, which amounted to EUR 20.1m in the first quarter,
include all investments designed to achieve a sustainable improvement in the
cost structure such as restructuring measures. Furthermore, due to
internationally low interest rate levels, it was necessary to reduce the
discount interest rate for existing, interest-bearing provisions of Austrian
Post by 0.25 percentage points. The lower discount factor led to increased
provisioning requirements totalling EUR 8.5m.  
Otherwise there were no significant changes in provisions for employee
under-utilisation or employees transferring to the federal public service during
the reporting period. The provisions for employee under-utilisation have
declined from EUR 239.0m to EUR 236.3m since the beginning of 2012. The
cash-related use of these provisions in the first quarter amounted to EUR 7.7m. 
In the first quarter of 2012, earnings before interest, tax, depreciation and
amortisation (EBITDA) of Austrian Post improved to EUR 75.8m. Accordingly, the
EBITDA margin was 12.5%. Earnings before interest and tax (EBIT) rose by 14.4%
to EUR 55.8m, corresponding to an EBIT margin of 9.2%. 
From a divisional perspective, both divisions improved their operating results
during the period under review. EBIT in the Mail & Branch Network Division rose
in the first quarter to EUR 74.4m, mainly as a consequence of the
above-mentioned revenue increase. 
The Parcel & Logistics Division also showed an improvement. EBIT increased from
EUR 5.2m to EUR 7.6m. The good volume development combined with structural
measures implemented in the subsidiaries featuring a below-average performance
is leading to an improved margin situation for the year 2012. 
EBIT in the Corporate segment was down from minus EUR 17.3m in the previous year
to minus EUR 26.2m in the first quarter of 2012. Amongst other reasons, this
decline can be attributed to the reduction of the discount interest rate for
provisions by 0.25 percentage points. Thus, requirements increased for
interest-bearing provisions on the balance sheet.
Earnings before tax rose 16.6% to EUR 55.7m. After deducting income taxes
totalling EUR 14.3m, the Group net profit (profit after tax for the period)
amounted to EUR 41.4m. This corresponds to earnings of EUR 0.61 per share for
the first quarter of 2012 (prior year quarter: EUR 0.55).

CASH FLOW
The operating cash flow before changes in working capital amounted to EUR 71.3m
in the first three months of 2012, or EUR 23.6m above the prior-year quarter.
During the period under review, the cash flow from changes in net working
capital amounted to minus EUR 6.0m. This development is mainly due to the
increase in receivables. 
The cash flow from investing activities of minus EUR 14.1m includes cash
outflows for the purchase of property, plant and equipment (CAPEX) totalling
minus EUR 10.1m, and cash inflows derived from the disposal of property, plant
and equipment of EUR 4.9m. Accordingly, the free cash flow was EUR 51.2m,
compared to EUR 23.2m in the first three months of the previous year. 

EMPLOYEES
The average number of full-time employees at Austrian Post totalled 22,998
people in the first quarter of 2012, corresponding to a decline in the workforce
by 268 employees from the prior-year period. Most of Austrian Post's labour
force is employed by the parent company Österreichische Post AG (a total of
19,372 full-time equivalents).   

OUTLOOK FOR 2012
Austrian Post confirms the original outlook for its revenue development for the
entire year 2012. Revenue should remain stable or rise slightly on a comparable
basis. 
Business development will continue to be impacted by structural changes in the
postal sector. Electronic substitution will lead to a decline in addressed
letter mail volumes, whereas increasing       e-commerce should result in growth
in the transported parcel volumes. The dampened economic environment could have
a negative effect on the advertising industry and consumer behaviour. 
One focal point of the Group will continue to be on enhancing the profitability
of the services offered. With respect to sustainable earnings development,
Austrian Post confirms the targeted EBITDA margin in the range of 10% to 12%.
The company is also striving to achieve a further improvement in earnings before
interest and tax (EBIT) compared to 2011.
The operating cash flow generated by Austrian Post will continue to be prudently
used mainly to finance sustainable efficiency improvements, structural measures
and future-oriented investments. Total capital expenditure (CAPEX) in 2012 is
expected to reach a level of EUR 80-90m. This will primarily focus on
replacement investments in existing facilities as well as on continuous
modernisation and efficiency enhancement, for example new sorting technology for
direct mail items. Domestic and international acquisitions are possible to round
off and safeguard Austrian Post's core business. The current attractive dividend
policy will be continued. 

PERFORMANCE OF DIVISIONS 
MAIL & BRANCH NETWORK DIVISION 
Since the beginning of the year 2012, the previous Mail and Branch Network
divisions were merged to create the new Mail & Branch Network Division. The new
segment reporting reflects the current organisational, management and reporting
structure.
Divisional revenue developed very positively in the first quarter of 2012,
rising to EUR 385.0m. Despite economic uncertainties and the ongoing trend
towards declining addressed letter mail volumes related to electronic
substitution, this solid growth was achieved on the basis of special effects
such as the new requirements for the physical distribution of information
applying to customers in the finance, telecommunications and energy sectors,
which positively influenced revenue development. Moreover, the first quarter of
2012 featured an additional working day compared to the same period in the
previous year.   
In the Letter Mail Business Area, revenue improved by 13.3% from the prior-year
quarter to EUR 205.2m. The continuing substitution of letters by electronic
media was counteracted by positive effects. Special effects included an
additional working day and the new legal information obligations for various
customer groups. In addition, the change in the product portfolio of Austrian
Post resulted also in a volume shift from direct mail items to higher quality
letter mail products and from parcel to letter mail items in the field of online
shopping. Furthermore, new services in the Mail Solutions segment such as
mailroom management contributed to growth. 

The Direct Mail Business Area posted a slight revenue drop in the first quarter
of 2012, to EUR 109.7m. This development is mainly attributable to the
above-mentioned volume shifts to the Letter Mail segment, but also to the
structural decrease in the business of mail order companies and seasonal shifts
of advertising campaigns from the first to the second quarter. Revenue of the
Media Post Business Area improved to EUR 35.7m in the first three months of
2012.   
Activities of the former Branch Network Division are now reported in the
business area Branch Services, whose revenue fell to EUR 34.4m. Half of this
decrease is due to the reclassification of the "Value Logistics" operations to
the Parcel & Logistics Division, whereas the other half is the result of
declining revenue with retail products and financial services.    
On balance, EBITDA of the Mail & Branch Network Division improved to EUR 81.8m
in the period under review, and EBIT climbed to EUR 74.4m. The former Branch
Network is included with a slightly negative earnings contribution. 

PARCEL & LOGISTICS DIVISION 

External sales of the Parcel & Logistics Division climbed 5.9% in the first
quarter of 2012, to EUR 220.8m. As at March 15, 2012, an agreement was signed
with PostNL regarding the sale of the subsidiaries in the Netherlands and
Belgium. The deconsolidation of the Dutch company took place as at March 15,
2012. The disposal of the Belgian subsidiary is expected at the end of June
2012.  
The premium parcel segment (parcel delivery within 24 hours), which is mainly
used in the business-to-business area, generated a revenue increase of 4.1% in
the first quarter of 2012, to EUR 169.4m. The German subsidiary trans-o-flex
accounted for about three-quarters of this revenue. Parcel volumes of business
customers in Austria increased at a disproportionately high rate, whereas
intensified price pressure was perceptible in South East and Eastern Europe. 
The standard parcels product segment used mainly for shipments to private
customers also posted growth. Revenue rose by 7.2%, to EUR 43.6m.
The operating result of the Parcel & Logistics Division improved. First quarter
EBIT totalled EUR 7.6m. 


The interim report for the first quarter of 2012 is available in the internet:
www.post.at/ir/en --> Publications --> Financial Reports


Further inquiry note:
Austrian Post
Mr. Harald Hagenauer
Head of Investor Relations & Corporate Governance 
Tel.: +43 (0) 57767-30400
harald.hagenauer@post.at

Austrian Post
Ms. Ingeborg Gratzer
Head of Press & Internal Communications
Tel.: +43 (0) 57767-24730
ingeborg.gratzer@post.at	

Austrian Post
Mr. Michael Homola
Press Spokesman
Tel.: +43 (0) 57767-32010
michael.homola@post.at

end of announcement                               euro adhoc 
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issuer:      Österreichische Post AG
             Haidingergasse  1
             A-1030 Wien
phone:       +43 (0)57767-0
mail:     investor@post.at
WWW:      www.post.at
sector:      Transport
ISIN:        AT0000APOST4
indexes:     ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English
 



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