10.08.2012 – 07:31

Österreichische Post AG

EANS-Adhoc: Österreichische Post AG
AUSTRIAN POST H1 2012: Revenue growth (+3.1%) and earnings improvement (EBIT +13.5%) in the first half of 2012, Outlook for 2012 confirmed despite unstable economic environment

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6-month report

10.08.2012

- Increased revenue in H1
  - Revenue up 3.1% in the first half of 2012 despite weaker economy
  - Positive half-year development in the mail and parcel segments  
- Further earnings improvement in the first half-year 
  - EBITDA increase of 6.5% to EUR 132.9m
  - EBIT rise of 13.5% to EUR 92.2m
- Strong cash flow and solid balance sheet 
  - Operating cash flow before changes in working capital of EUR 112.3m  
  - Equity ratio increased to 40.7%
- Outlook for 2012 confirmed
  - Stable or slightly rising revenue 
  - EBITDA margin within the targeted range of 10-12% and objective of further
EBIT improvement

OVERVIEW OF AUSTRIAN POST
Against the backdrop of a dampened economic environment, the revenue and
earnings figures of the Austrian Post Group developed in line with expectations.
On balance, revenue rose 3.1% in the first half of 2012. Revenue of the Parcel &
Logistics Division increased by 4.9% and the Mail & Branch Network Division
posted a 2.1% rise. Earnings before interest and tax (EBIT) also further
improved by 13.5% in the first six months of 2012 to EUR 92.2 million. Both
divisions made a positive contribution to this growth.
The economic environment of the postal market continues to be characterised by a
structural transformation. The trend towards the electronic substitution of
letters and increased parcel volumes related to online shopping is continuing.
At the same time, the impact of the challenging economic situation has become
apparent. "With respect to Austrian Post's current and future business
development, it is important that the company continues to advance further on
the basis of its four strategic cornerstones", says Austrian Post CEO Georg
Pölzl. 
In this regard Austrian Post's market leadership in its core business was
further expanded by strengthening its foothold in the Austrian parcel market. At
the same time, further progress was made toward greater efficiency with a new
performance-oriented remuneration model for delivery staff. The earnings
potential of the strategic investments held by the Group was improved thanks to
the disposal of its subsidiaries in the Benelux region and targeted
acquisitions. Whereas the growth path in the mail area in South East and Eastern
Europe was continued by strategic investments in Poland and Bulgaria, the
purchase of a company in Austria expanded Austrian Post's service portfolio in
the parcel segment. Consistent customer orientation is a top priority in the
further development of the Group. Accordingly, online and self-service solutions
were also strongly promoted.
"It can be assumed that the entire 2012 financial year will be impacted by a
restrained economic environment. Nevertheless, we should succeed in achieving a
stable or slightly rising revenue development on a comparable basis. The Group
continues to strive for an EBITDA margin of 10-12% and an improvement in its
earnings before interest and tax (EBIT)", CEO Georg Pölzl adds.

REVENUE DEVELOPMENT IN DETAIL
In the first half of 2012, Austrian Post succeeded in increasing its total
revenue by 3.1%, to EUR 1,173.1m. Group revenue developed in line with
expectations against the backdrop of an uncertain economic situation.
Revenue in the Mail & Branch Network Division rose by 2.1% to EUR 741.6m. The
trend towards declining letter mail volumes caused by electronic substitution
along with the prevailing economic uncertainty and related negative effects on
the advertising industry had a dampening effect on overall volume development.
In addition, there was a perceptible volume shift from direct mail items to
higher quality letter mail products, and shipments in the field of online
shopping are increasingly being sent as letter mail items instead of parcels.
Moreover, the change in the product portfolio of Austrian Post as of May 1, 2011
led to positive effects in the first four months of 2012 compared to the
prior-year period. New services in the Mail Solutions segment also contributed
to growth. 
The former Branch Network Division is now encompassed 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 1,889 postal service
points as at June 30, 2012, of which 1,283 are third-party operated postal
partner offices. 
Revenue of the Parcel & Logistics Division rose by 4.9% to EUR 430.8m. From a
regional perspective, the Austrian parcel market generated the highest growth,
followed by a good revenue development in Germany. In the first half-year,
revenue of the disposed Benelux subsidiaries is still partially included in the
income statement. The Dutch company was deconsolidated as at March 15, 2012,
whereas the Belgian subsidiary was deconsolidated effective May 31, 2012. 
 
INCOME STATEMENT
Revenue growth of EUR 35.2m to EUR 1,173.1m also affected operating expenses for
raw materials, consumables and services used, which rose by EUR 18.6m to EUR
379.5m. In particular, cost increases were due to higher purchases of external
transport services to handle rising parcel volumes, as well as higher
commissions for postal partner offices as a consequence of the structural
transformation of the branch network. 
Staff costs rose by 1.7% year-on-year, or EUR 8.9m, to EUR 549.5m. The
operational staff costs included in this figure increased by 1.6% from the first
half of 2011. The average number of employees in the Group declined by 269
compared to the prior-year period to 22,981 employees (full-time equivalents). 
Non-operational staff costs, which amounted to EUR 30.1m in the first half of
2012, include all investments designed to achieve a sustainable improvement in
the cost structure, such as restructuring measures. Accordingly, allocations
were made to various provisions relating to employee under-utilisation or
employees transferring to the federal public service during the reporting
period. All in all, the provisions for employee under-utilisation reported on
the balance sheet of Austrian Post, currently at EUR 239.2m, have remained
constant for the most part since the beginning of 2012. The cash-related use of
these provisions in the first half-year amounted to EUR 13.9m. Due to
internationally low interest rate levels, it was already necessary in the first
quarter 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.
In the first half of 2012, earnings before interest, tax, depreciation and
amortisation (EBITDA) of the Austrian Post Group improved to EUR 132.9m.
Accordingly, the EBITDA margin was 11.3%. Earnings before interest and tax
(EBIT) rose by 13.5% to EUR 92.2m, corresponding to an EBIT margin of 7.9%. 
From a divisional perspective, both operating divisions improved their operating
results during the period under review. EBIT in the Mail & Branch Network
Division rose 10.1% in the first half-year to EUR 135.0m, mainly as a
consequence of the above-mentioned revenue increase. The Parcel & Logistics
Division also showed an improvement. EBIT increased to EUR 11.4m. All effects
relating to the disposal of Austrian Post's former subsidiaries in Belgium and
the Netherlands were integrated in the earnings figures as final transaction
costs recognised in the second quarter. EBIT in the Corporate segment was down
to minus EUR 54.2m. Amongst other reasons, this decline can be attributed to the
reduction of the discount interest rate for provisions of 0.25 percentage points
and the related increase in provisioning requirements. 
Earnings before tax of the Austrian Post Group rose 15.1% to EUR 91.3m. After
deducting income taxes totalling EUR 20.6m, the Group net profit (profit after
tax for the period) amounted to EUR 70.8m. This corresponds to earnings of EUR
0.44 per share for the second quarter of 2012 and EUR 1.05 per share for the
first half of the year (+14.2%).

CASH FLOW
Operating cash flow before changes in working capital amounted to EUR 112.3m in
the first six months of 2012, or EUR 19.0m above the comparable prior-year
period. The cash flow from investing activities of minus EUR 53.6m includes cash
outflows for the purchase of property, plant and equipment (CAPEX) totalling
minus EUR 25.5m, and cash inflows derived from the disposal of property, plant
and equipment of EUR 6.2m. Accordingly, free cash flow before
acquisitions/divestments amounted to EUR 87.4m, or EUR 22.3m above the
comparable figure in the first half of the previous year. All in all, a total of
EUR 37.7m in expenditures related to the disposal of Austrian Post's
subsidiaries in the Benelux and for the acquisitions in Poland, Bulgaria and
Austria. 

EMPLOYEES
The average number of full-time employees at the Austrian Post Group totalled
22,981 people in the first half of 2012, corresponding to a decline in the
workforce by 269 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 19,407 full-time equivalents).

OUTLOOK FOR 2012
Austrian Post continues to expect revenue to remain stable or rise slightly on a
comparable basis in the entire year 2012. Development of the mail and parcels
business is impacted by the dampened economic environment as well as structural
changes in the postal and logistics sector. Electronic substitution will lead to
a decline in addressed letter mail volumes, whereas increasing e-commerce should
result in parcel volume growth. The ongoing economic uncertainty could continue
to have a negative effect on the advertising industry and private consumption
patterns.
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 an improvement in earnings before
interest and tax (EBIT) compared to 2011.
The operating cash flow generated by Austrian Post is prudently and purposefully
used to finance sustainable efficiency improvements, structural measures and
future-oriented investments, and also serves as the basis for an attractive
dividend policy. Total capital expenditure (CAPEX) in 2012 is expected to reach
a level of about EUR 90m. This will primarily focus on replacement investments
in existing facilities as well as on investments to further improve mail and
parcel logistics operations.
 
PERFORMANCE OF DIVISIONS 
MAIL & BRANCH NETWORK DIVISION 
Since the beginning of the year 2012, the previous Mail Division and the Branch
Network Division 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
half of 2012, rising to EUR 741.6m. In spite of economic uncertainties and the
fundamental trend towards declining addressed letter mail volumes, this solid
performance could be achieved due to the fact that positive special effects
impacted half-year results. 
In the Letter Mail Business Area, revenue improved by 7.0% from the prior-year
period to EUR 390.3m. The trend towards slightly decreasing letter mail volumes
related to electronic substitution continued. However, this was counteracted by
volume shifts from direct mail items to higher quality letter mail products as
well as various Internet orders, which are no longer sent as parcels but as
letter mail items. In addition, changes in the product portfolio of the Letter
Mail Business Area, which took effect on May 1, 2011, continued to deliver
positive contributions in the first four months of the 2012 financial year. 
Revenue of the Direct Mail Business Area fell to EUR 213.6m in the first
half-year 2012. This development is attributable to the above-mentioned volume
shifts to the Letter Mail Business Area, but also to the current economic
uncertainty, which in turn led to a dampening of consumer confidence and a
reduction in the volume of direct mail items ordered by companies. In
particular, structural related decreases in the business of mail order firms
have taken place. In contrast, revenue of the Media Post Business Area improved
to EUR 71.6m in the first six months of 2012.  
Revenue of the former Branch Network Division, which is now reported in the
business area Branch Services, was down to EUR 66.1m. Half of this decrease is
due to the reclassification of the value logistics operations as part of the
Parcel & Logistics Division, whereas the other half is the result of declining
revenue from retail products and financial services.    
On balance, EBITDA of the Mail & Branch Network Division increased by 8.4% to
EUR 150.2m in the period under review, and EBIT climbed by EUR 12.4m to EUR
135.0m. The former Branch Network Division is included with an improved but
still negative earnings contribution. 
 
PARCEL & LOGISTICS DIVISION 
External sales of the Parcel & Logistics Division climbed 4.9% in the first half
of 2012, to EUR 430.8m. As at March 15, 2012, an agreement was signed with
PostNL regarding its acquisition of the Austrian Post subsidiaries in the
Netherlands and Belgium. The deconsolidation of the Dutch company took place as
at March 15, 2012, and the disposal of the Belgian subsidiary took effect on May
31, 2012. Since the beginning of the year, the company "Wertlogistik"
specialising in value logistics has been a new part of the portfolio offered by
the Parcel & Logistics Division, whereas it was previously assigned to Austrian
Post's Branch Division. In addition, the firm "Systemlogistik" acquired as at
May 31, 2012 expands the range of services offered by the division with respect
to warehousing, picking and packing of goods.
The premium parcel segment (parcel delivery within 24 hours), which is mainly
used in the business-to-business area, generated a revenue increase of 2.6% in
the first half of 2012, to EUR 329.5m. The German subsidiary trans-o-flex, which
posted a satisfactory growth rate, accounted for about 60% of this revenue.
Parcel volumes of business customers in Austria increased at a
disproportionately high rate, whereas intensified price pressure was evident in
South East and Eastern Europe. The standard parcels product segment used mainly
for shipments to private customers also posted growth. Revenue rose by 8.8%, to
EUR 86.5m.
On balance, EBITDA of the Parcel & Logistics Division improved by EUR 22.0m.
EBIT in the first half of 2012 amounted to EUR 11.4m, a rise of 10.5% from the
prior-year level. This includes various transaction costs relating to the
disposal of the subsidiaries in the Netherlands and Belgium.

The half-year financial report 2012 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

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

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