Österreichische Post AG

EANS-Adhoc: AUSTRIAN POST Q1 2013: Revenue growth (+1.3%) as well as earnings improvement (EBIT +2.4%) in Q1,Outlook confirmed for 2013

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Financial Figures/Balance Sheet/3-month report
17.05.2013


- Market environment
  - Mail business in Austria features positive revenue effects
  - Ongoing growth of the Austrian parcel market
  - Strong competition in the international parcel business
- Higher revenue
  - Revenue increase of 1.3% (excl. Benelux)
  - Slight growth in both the mail and parcel businesses
- Further earnings growth
  - EBIT rise of 2.4% to EUR 59.7m
  - Earnings per share up 7.8% to EUR 0.69
- Outlook for 2013 confirmed
  - Stable or slightly rising revenue expected
  - EBITDA margin within the targeted range of 10-12% 
  - Goal of further improving EBIT 

OVERVIEW OF AUSTRIAN POST
The first quarter 2013 proceeded very satisfactorily for Austrian Post. The
trends prevailing in the last few quarters were confirmed. In particular, the
mail segment developed in a very encouraging way in the reporting period.
Although the structural change of declining letter mail volumes caused by
electronic substitution is continuing, growth has been achieved on the basis of
positive revenue effects. The Austrian parcels market also showed growth
momentum at the beginning of 2013, which was mainly driven by the ongoing trend
towards online shopping. In addition, Austrian Post increased its market share
in the business parcels segment. In contrast, the international business showed
a mixed picture. The company succeeded in significantly increasing volumes in
South East and Eastern Europe and also achieved a slight revenue increase. On
the other hand, revenue declined in Germany, mainly due to strong competition.
Accordingly, the focus will be on enhancing the profitability of the services
provided, and the efficiency improvement programme will be decisively continued
in 2013. 
Group revenue climbed 1.3% on a comparable basis to EUR 602.9m in the first
three months of 2013. The Mail & Branch Network Division generated a 1.5%
revenue increase due to acquisitions and positive one-off items (elections and
referendums), whereas the Parcel & Logistics Division achieved a 1.0% rise in
revenue. On balance, earnings before interest and tax of Austrian Post improved
by 2.4% to EUR 59.7m, which is not least attributable to the strictly
implemented efficiency enhancement measures. Earnings per share rose by 7.8% to
EUR 0.69. 
"The results of this quarter show that we are right on track with our strong
focus on customer orientation. We want to extend our offering for business
customers along the value chain, and further expand the range of self-service
solutions for private customers", says Georg Pölzl, CEO of Austrian Post. "By
the end of 2013 we will put 200 franking machines, 200 Post Drop-off Boxes as
well as 5,000 Pick-up Boxes and 100 Pick-up Walls into operation", Pölzl adds.
At the same time, Austrian Post is paying great attention to continually
enhancing efficiency and ensuring a greater flexibility of the company's cost
structure. Against this backdrop, and based on the first-quarter performance,
the outlook for the entire year 2013 is confirmed. Revenue should remain stable
or increase slightly, and the company is striving to achieve a further EBIT
increase. 

REVENUE DEVELOPMENT IN DETAIL
In the first quarter of 2013, Austrian Post slightly increased its total revenue
to EUR 602.9m in line with expectations. Adjusted to take account of the revenue
of EUR 10.8m generated by the disposed and deconsolidated subsidiaries in the
Benelux region in the first quarter of 2012, the revenue increase in the first
quarter of 2013 amounted to 1.3%. 


REVENUE BY DIVISION1                                    
                                                                
EUR m                     Q1 2012     Q1 2013        Change   Structure 
                                                     % EUR m    Q1 2013
Total revenue               605.7       602.9    -0.5%  -2.8     100.0%
Revenue excl. 
Benelux subsidiaries2       594.9       602.9     1.3%   8.0          -
Mail & Branch Network       385.0       391.0     1.5%   6.0      64.8%
Parcel & Logistics          220.8       212.1    -3.9%  -8.6      35.2%
Parcel & Logistics excl. 
Benelux subsidiaries2       210.0       212.1     1.0%   2.2          -
Corporate                     1.3         3.4    >100%   2.1        0.6%
Consolidation                -1.4        -3.6   <-100%  -2.2       -0.6%
Calendar working days 
in Austria                     64          63        -     -           -
                                        

1 External sales of the divisions
2 The closing of the disposal of trans-o-flex Nederland B.V. took place as at
March 15, 2012, for trans-o-flex Belgium B.V.B.A as at May 31, 2012

Revenue of the Mail & Branch Network Division rose by 1.5%, or EUR 6.0m, to EUR
391.0m. On the one hand, this gratifying development can be attributed to the
consolidation of new subsidiaries in Poland, Romania and Bulgaria (plus EUR
6.2m). On the other hand, the revenue increase is also due to the positive
impetus provided by elections and referendums held in Austria during the first
quarter of 2013. In addition, services offered in the field of Mail Solutions
also posted growth. 
In the Parcel & Logistics Division, revenue in the first quarter of 2013,
adjusted to take account of the disposed subsidiaries in the Benelux region,
rose by 1.0% to EUR 212.1m. The Dutch company was deconsolidated as at March 15,
2012, whereas the Belgian subsidiary was deconsolidated effective May 31, 2012.
From a regional perspective, the Austrian parcel market generated the highest
growth, whereas revenue declined in Germany.

INCOME STATEMENT
Against the backdrop of a stable revenue development of the Austrian Post Group,
the decline in turnover in Germany in particular led to a reduction of operating
expenses for raw materials, consumables and services used, which fell by 1.9% to
EUR 187.2m. In particular, purchases of external transport services were
reduced. 
Staff costs decreased slightly year-on-year to EUR 280.2m. This figure
encompasses all operational staff costs as well as non-operational staff costs
in the Group, which are primarily designed to enable a sustainable improvement
in the cost structure. On balance, non-operational staff costs in the first
quarter of 2013 amounted to about EUR 16m, which encompass severance payments,
restructuring measures and provisions. For example, staff-related expenses of
EUR 8.3m arose for the provisions for employee under-utilisation. 
In the first quarter of 2013, earnings before interest, tax, depreciation and
amortisation (EBITDA) of the Austrian Post Group improved by 2.1%, to EUR 80.0m.
Accordingly, the EBITDA margin was 13.3%. Earnings before interest and tax
(EBIT) rose by 2.4% to EUR 59.7m, corresponding to an EBIT margin of 9.9%. 
From a divisional perspective, the company showed a stable development. The Mail
& Branch Network Division generated an EBIT of EUR 79.0m, a rise of 3.3%. This
increase is related to positive effects in the division's revenue development as
well as the ongoing efficiency improvements in the entire mail logistics
operations. EBIT of the Parcel & Logistics Division in the first quarter of 2013
amounted to EUR 7.4m, slightly below the level achieved in the prior-year
period. The EBIT margin of 3.4% is within the targeted range for the entire year
2013.
After deducting income taxes totalling EUR 12.2m, the Group net profit (profit
after tax for the period) amounted to EUR 46.6m. This corresponds to earnings of
EUR 0.69 per share for the first quarter of 2013, an increase of 7.8%.


EBIT BY DIVISION                                
                                                   Change
EUR m                  Q1 2012     Q1 2013        %   EUR m
Total EBIT                58.3        59.7     2.4%     1.4
Mail & Branch Network     76.5        79.0     3.3%     2.5
Parcel & Logistics         7.8         7.4    -5.4%    -0.4
Corporate                -25.9       -26.7    -2.9%    -0.7
                                

CASH FLOW
In the first three months of 2013, operating cash flow before changes in working
capital totalled EUR 88.6m, slightly above the prior-year level, in which case
the adapted reporting of changes in provisions between the operating cash flow
before changes in working capital and the changes in net working capital is
applied. On the basis of this adapted reporting of changes in provisions, the
allocation to or reversal of non-current provisions is now recognised in the
operating cash flow before changes in working capital, whereas their use is
reported in changes in net working capital. 
On balance, the changes in net working capital totaled minus EUR 38.7m, of which
about EUR 23m can be attributed to the payment of customer bonuses. Furthermore,
a cash-related reduction in liabilities took place, for example for employees
transferring to the federal public service. 
Cash flow from investing activities of minus EUR 51.1m includes cash outflows
for the purchase of property, plant and equipment (CAPEX) totalling EUR 22.3m
and EUR 10.9m for acquisitions. In addition, the change in the securities
portfolio based on the purchase of investment-grade bonds and money market
products led to a cash outflow of EUR 18.4m. On balance, free cash flow before
acquisitions and securities amounted to EUR 28.1m in the first quarter of 2013.

EMPLOYEES
The average number of full-time employees at the Austrian Post Group totalled
23,829 people in the first quarter of 2013. This comprises an increase of 831
employees from the prior-year quarter, 1,400 of whom can be attributed to the
newly acquired subsidiaries in Poland, Bulgaria and Romania. Most of Austrian
Post's labour force is employed by the parent company Österreichische Post AG (a
total of 18,867 full-time equivalents).

OUTLOOK FOR 2013
Austrian Post maintains its original outlook for the entire year 2013. A stable
or slightly positive revenue development is expected. The medium-term revenue
growth target of 1-2% per year defined by Austrian Post remains unchanged. 
The primary macro trends, i.e. electronic substitution of letter mail, the
development of the advertising industry and the development of domestic and
international parcel volumes remain unchanged. Austrian Post expects an ongoing
volume decline in traditional addressed letter mail items in the amount of 3-5%
p.a., reflecting international trends. 
In contrast, there could be a stabilisation in direct mail volumes in 2013
following the drop in advertising mail volumes in the previous financial year. A
robust advertising industry and positive volume effects caused by various
elections should contribute to this development. In the parcel segment, Austrian
Post continues to anticipate growth in its business with private customers,
whereas the intensive level of competition in the business customer segment is
likely to continue. 
Enhancing the profitability of the services offered will continue to be a key
focal point of the Group's activities. In particular, Austrian Post will
maintain its efforts to promote efficiency increases in its parcel and logistics
business. With respect to sustainable earnings development, Austrian Post
confirms the targeted EBITDA margin in the range of 10-12% for the Group. The
company is also striving to achieve a further improvement in its earnings before
interest and tax (EBIT) compared to 2012. 
The operating cash flow generated by Austrian Post will continue to be used
prudently and in a targeted manner to finance sustainable efficiency
improvements, structural measures and future-oriented investments. Total capital
expenditure is expected to reach a level of about EUR 90m in 2013. This will
primarily focus on replacement investments in existing facilities as well as
their continuous modernisation and efficiency enhancement. Domestic and
international acquisitions which aim to round off and safeguard Austrian Post's
core business are possible.

PERFORMANCE OF DIVISIONS 
MAIL & BRANCH NETWORK DIVISION 
Divisional revenue developed very positively in the first quarter of 2013,
increasing by 1.5% to EUR 391.0m. This development can be attributed to the
first-time full consolidation of new Group subsidiaries (plus EUR 6.2m) and the
positive effects of various elections and referendums in Austria in the first
quarter of 2013. 
Letter Mail revenue improved by 2.1% from the prior-year period to EUR 209.5m.
The substitution of letter mail by electronic media is continuing as before.
Such decreases took place, for example, in the telecommunications customer
segment. In contrast, various elections provided added impetus, due to the fact
that the possibility of voting by absentee ballot has emerged as a popular
instrument of direct democracy. New services offered in the field of Mail
Solutions also posted growth. 
Revenue in the field of Direct Mail also increased in the first quarter of 2013,
climbing by 2.8% to EUR 112.8m. The rise here was also due to the newly
consolidated subsidiaries and the positive effects of elections on the business.
On the other hand, Media Post revenue was down by 1.3% in the first three months
of 2013 to EUR 35.3m. Branch Services revenue also fell by 3.1% to EUR 33.4m,
which is mainly related to the decline in financial services. 
On balance, EBIT of the Mail & Branch Network Division improved by 3.3% to EUR
79.0m, which can be attributed to the good revenue development as well as the
ongoing efficiency enhancement measures.

PARCEL & LOGISTICS DIVISION 
External sales of the Parcel & Logistics Division decreased by 3.9% to EUR
212.1m in the first quarter of 2013. However, the prior-year quarter still
included the revenue achieved by the Benelux subsidiaries disposed of during the
first half of 2012. The deconsolidation of the Dutch company took place as of
March 15, 2012, and the disposal of the Belgian subsidiary took effect on May
31, 2012. Adjusted to take account of the former Benelux subsidiaries, the
division actually achieved a 1.0% revenue increase on a year-on-year comparison.
This growth was driven by increases in Austria and in South East and Eastern
Europe. In contrast, revenue declined in Germany. 
Premium Parcels (parcel delivery within 24 hours), which are mainly used in the
business-to-business segment, generated revenue of EUR 158.9m in the first
quarter of 2013, a drop of 6.2% from the previous year. This decline is
primarily due to the deconsolidation of the Benelux subsidiaries as well as the
downward trend in Germany. Parcel volumes of business customers increased at an
above-average rate in Austria. 

Standard Parcels, which mainly involve shipments to private customers, also
posted growth. Revenue rose by 5.2% to EUR 45.9m. 
Earnings of the Parcel & Logistics Division featured an EBIT of EUR 7.4m,
comparable to the prior-year level. The EBIT margin of 3.4% is within the
targeted range for the entire year 2013.

The interim report for the first quarter of 2013 is available on the Internet at
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

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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