EANS-Adhoc: AUSTRIAN POST IN H1 2011
GOOD DEVELOPMENT IN THE FIRST HALF-YEAR
UNDERLINES POSITIVE OUTLOOK
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6-month report
19.08.2011
- Increased revenue
- Revenue up 2.9% from the previous year on a comparable basis
- Mail Division on a comparable basis +2.1%, Parcel & Logistics +6.2%
- Improved earnings
- EBITDA of EUR 124.8m (margin of 11.0%)
- EBIT +9.1% to EUR 81.3m
- Ongoing solid cash flow and balance sheet
- Operating cash flow before changes in working capital up 15.5% to EUR 93.3m
- Cash and cash equivalents of EUR 264.2m
- Outlook for 2011
- Revenue in 2011: continuation of the development in the first half-year
(+2.9%)
- EBITDA margin at the upper end of the targeted range of 10-12%
AN OVERVIEW OF DEVELOPMENTS AT AUSTRIAN POST
"The first half of 2011 proceeded very satisfactorily for Austrian Post. We are
on the right track, pursuing our strategy of offsetting declining letter mail
volumes by generating growth in the parcel business and advertising mail",
comments CEO Georg Pölzl. "In the mail and parcel segments we succeeded in
maintaining our market leadership position and continuing our development in
other markets."
Against this backdrop, total revenue of the Austrian Post Group rose by 2.9% to
EUR 1,137.9m on a comparable basis, adjusted for the meiller companies which
were deconsolidated at the end of 2010. The Parcel & Logistics Division posted
the biggest increase of 6.2%, followed by the Mail Division, whose revenue rose
by 2.1%. This was in contrast to the revenue decrease of 6.2% in the Branch
Network Division.
The persistent focus on efficiency improvements and enhancing the flexibility
of the cost structure showed positive effects in the first half of 2011. As a
consequence, EBIT of Austrian Post climbed 9.1% to EUR 81.3m, with all
operating divisions generating positive earnings growth. EBIT of the Mail
Division was up 10.2%, the Parcel & Logistics Division reported a 69.3% rise
and the Branch Network Division an increase of 33.7%, the latter not least due
to effective restructuring measures. Of the 1,876 postal service points, a
total of 1,212 are already third-party operated postal partner offices, a rise
of 456 in the past year.
On the basis of this development, a continuation of the revenue increase is
expected, as shown by the 2.9% revenue growth achieved in the first half-year.
With respect to the development of earnings, Austrian Post confirms its
objective of generating a sustainable EBITDA margin between 10% and 12%. The
EBITDA margin for the entire year 2011 is expected to be at the upper end of
the targeted range.
"The basis of our operations is our consistent customer orientation, to which
we attach considerable importance to in all our decision-making processes.
Innovative products and services with self-service features are significant
factors underlying our business operations", says Pölzl. "Our current Austria-
wide initiative `CO2 neutral delivery´ is also in line with this approach to
pro-actively support each of our customers demanding ecologically sustainable
logistics services. Thus, key cornerstones of Austrian Post´s corporate
strategy are the efficiency improvements and adjustments carried out as a
response to the continuing changes in the market environment", Pölzl adds.
REVENUE DEVELOPMENT OF THE DIVISIONS*
EUR m H1 H1 Change Q2 Q2
2010 2011 % EUR m 2010 2011
Total revenue** 1,106.0 1,137.9 2.9% 31.9 543.5 566.5
Mail** 637.9 651.5 2.1% 13.5 312.9 327.3
Parcel & Logistics 387.0 410.9 6.2% 23.9 191.1 202.4
Branch Network 80.0 75.0 -6.2% -4.9 39.1 36.6
Corporate 2.6 2.5 -1.6% 0.0 1.2 1.3
Consolidation -1.5 -2.1 -34.5% -0.5 -0.8 -1.1
Working days*** 123 124 - - 61 61
* External sales of the divisions
** Figures for 2010 and changes excl. meiller Group (pro forma consolidation);
2011: joint venture MEILLERGHP consolidated at equity
*** Calendar working days in Austria
In order to enable a consistent analysis of Austrian Post´s revenue
development, revenue in 2010 has been adjusted for the meiller companies. The
deconsolidation of these companies reduced the comparable revenue of the Mail
Division by EUR 44.2m in the first half-year 2010. The joint venture MEILLERGHP
established at the end of 2010, in which Austrian Post has a 65% stake, is not
fully consolidated in 2011, but consolidated at equity instead.
Revenue on a comparable basis increased by 2.9% in the first half of 2011 to
EUR 1,137.9m. Revenue growth was generated in the Parcel & Logistics Division
(+6.2%) and the Mail Division (+2.1%). In contrast, revenue of the Branch
Network Division fell by 6.2% compared to 2010. The year-on-year comparison
includes one additional working day in H1 2011.
Revenue in the Mail Division was up by 2.1% on a comparable basis to EUR
651.5m. The substitution of letters by electronic media was offset by positive
effects such as changes in the letter mail portfolio, self-service products and
advance purchases of the new line of postage stamps. Moreover, the revenue
increase for addressed and unaddressed direct mail items clearly shows the good
economic development of the advertising industry.
Revenue of the Parcel & Logistics Division climbed by 6.2% to EUR 410.9m in the
first half of 2011 due to rising parcel volumes and against the backdrop of
ongoing price pressure. Growth was generated in Austria as well as in Germany,
Benelux and South East and Eastern Europe.
The organisational structure of the Branch Network Division is currently
undergoing change. In the last 12 months the number of third-party operated
postal partner offices has risen from 756 to 1,212. This change has affected
the division´s revenue and cost structure as well as the redefined partnership
with BAWAG P.S.K.. Since January 1, 2011, revenue from the financial services
business has been subject to a new cost-based compensation plan. The division´s
external sales were down 6.2% to EUR 75.0m.
INCOME STATEMENT
EUR m H1 H1 Change Q2 Q2
2010 2011 % EUR m 2010 2011
Revenue* 1,106.0 1,137.9 2.9% 31.9 543.5 566.5
EBITDA 124.8 124.8 0.0% 0.0 56.4 53.9
EBIT 74.5 81.3 9.1% 6.8 29.2 32.5
Profit for the period 54.1 62.0 14.7% 7.9 20.6 24.6
Earnings per share (EUR) 0.80 0.92 14.7% 0.12 0.31 0.36
* Figures for 2010 and changes excl. meiller Group (pro forma consolidation);
2011: joint venture MEILLERGHP consolidated at equity
The revenue growth of 2.9% or EUR 31.9m also affects the cost structure of the
Group, due to the fact that higher parcel volumes also led to an increase in
expenses for parcel logistics subcontractors. As a consequence of the increased
purchase of external transport services, operating expenses for raw materials,
consumables and services used rose 7.2% on a comparable basis to EUR 360.8m.
Staff costs on a comparable basis declined by EUR 6.1m from the prior-year
figure. This decrease includes a reduction of operational staff costs by EUR
15.2m, whereas non-operational staff costs rose. Savings in operational staff
costs were also achieved by taking advantage of voluntary employee departures.
On a comparable basis, the average number of employees fell by 786 to 23,250
employees.
Non-operational staff costs, for example restructuring expenses and the
provision for employee under-utilisation, increased in the first half-year
2011. Accordingly, a total of EUR 15.6m was allocated to the provision for
employee under-utilisation for an additional 108 employees who are likely to
transfer to the federal public service. Austrian Post already reached an
agreement with the Ministry of Internal Affairs in 2009 as well as with the
Ministries of Finance and Justice in 2010 stipulating that staff costs for
these employees will be borne by Austrian Post until June 2014. On the balance
sheet of Austrian Post, these total staff costs are reported as a provision. As
a consequence, the provision for employee under-utilisation increased year-on-
year from EUR 244.0m to EUR 248.5m. The cash-related use of these provisions in
the first half of 2011 amounted to EUR 12.3m.
Earnings before interest, tax, depreciation and amortisation (EBITDA) of
Austrian Post amounted to EUR 124.8m in the first half of 2011, precisely
matching the prior-year level. The EBITDA margin was 11.0%. EBIT rose 9.1% to
EUR 81.3m, corresponding to an EBIT margin of 7.1%.
All operating divisions developed positively in the first half of 2011. EBIT of
the Mail Division rose by 10.2% to EUR 130.4m, the Parcel & Logistics Division
reported a 69.3% increase in EBIT to EUR 10.3m, and the Branch Network Division
improved by 33.7% to minus EUR 7.7m.
EBIT of the Corporate segment deteriorated from minus EUR 38.2m to minus EUR
51.7m due to the allocation of EUR 15.6m during the period under review to
provisions for employees who are likely to transfer to the federal public
service. The Corporate segment encompasses, amongst other items, non-allocated
costs for central departments, expenses in connection with unused properties as
well as changes in staff-related provisions.
Due to the current restructuring the negative earnings of Austrian Post´s 65%-
owned subsidiary MEILLERGHP led to results of investments consolidated at
equity of minus EUR 3.0 million.
Earnings before tax rose 12.5% to EUR 79.4m. After deducting income taxes
totalling EUR 17.4m, the Group net profit (profit after tax for the period)
amounted to EUR 62.0m. This corresponds to earnings of EUR 0.92 per share for
the first half of 2011, a rise of 14.7% from the prior-year figure.
BALANCE SHEET
Austrian Post takes a risk-averse business approach. This is demonstrated by
its high equity ratio, the low level of financial liabilities and the solid
level of cash and cash equivalents invested with the least possible risk.
The analysis of the balance sheet of Austrian Post shows a considerable level
of current and non-current financial resources. As at June 30, 2011, Austrian
Post had cash and cash equivalents of EUR 264.2m and financial investments in
securities amounting to EUR 51.6m.
CASH FLOW
In the first half of 2011, the operating cash flow before changes in working
capital, at EUR 93.3m, represents a rise of EUR 12.5m from the prior-year
level. Taxes paid at EUR 26.0m also include a tax payment of EUR 7.2m for the
2009 financial year.
The cash flow from changes in working capital declined by EUR 17.2m. The most
significant negative effect was the rise in receivables of EUR 12.0m, which is
mainly related to the new value added tax regulation applicable since the
beginning of 2011.
The cash flow from investing activities was minus EUR 7.5m, including a cash
outflow for the purchase of property, plant and equipment (CAPEX) amounting to
minus EUR 24.7m as well as a cash inflow derived from the disposal of property,
plant and equipment of EUR 14.7m. The total free cash flow was EUR 68.6m,
compared to EUR 51.3m in the first half of the previous year.
EMPLOYEES
During the period under review, the average number of full-time employees at
Austrian Post totalled 23,250 people, corresponding to a decline in the
workforce by 786 employees (on a comparable basis excl. the meiller Group)
compared to the prior-year period. The number of employees in the Parcel &
Logistics Division increased slightly, whereas the staff of the Mail Division
and Branch Network Division was reduced as planned. Most of Austrian Post´s
labour force, namely 19,832 full-time equivalent employees, is employed by the
parent company Österreichische Post AG.
OUTLOOK 2011
Austrian Post expects the volume of addressed letter mail in Austria to
decrease by 3-5% p.a., reflecting international trends. This will be primarily
driven by electronic substitution and the decline of high-value products. In
contrast, there are indications of a positive development in the business with
parcels and direct mail items, driven by the current economic development.
Based on these volume estimates, Austrian Post anticipates a continuation of
its revenue development for the entire year 2011, as demonstrated by the 2.9%
revenue growth in the first half of 2011. The overall revenue development of
the Mail Division should be stable or increase slightly on a comparable basis.
Austrian Post expects an increase in the revenue of the Parcel & Logistics
Division, which will clearly focus on enhancing the profitability of the
services offered. With respect to the earnings development of the Group, the
company confirms its objective of achieving a sustainable EBITDA margin between
10% and 12%. An EBITDA margin at the upper end of the targeted range is
expected for the entire year 2011.
The operating cash flow generated by Austrian Post will continue to be used to
finance future-oriented investments and dividend payments. The financial
planning of Austrian Post foresees total capital expenditure of about EUR
80-90m in 2011. This will primarily focus on replacement investments in
existing facilities as well as in new and more efficient sorting technology.
The top priorities in the company´s international business will be to enhance
performance and expand existing networks. Potential acquisitions will only take
place in the core business areas of Austrian Post, and only for companies with
growth-oriented business models. No major acquisitions are foreseeable at the
present time.
PERFORMANCE OF THE DIVISIONS
MAIL DIVISION
In the first six months of 2011, external sales of the Mail Division were up
2.1% on a comparable basis, or EUR 13.5m.
Revenue generated by the Letter Mail Business Area remained constant at EUR
361.0m on a year-on-year comparison. The substitution of letters by electronic
media was offset by positive effects such as changes in the letter mail
portfolio, self-service products and advance purchases of the new line of
postage stamps. The new option of selecting either Priority or Economy products
should successively lead to a trend towards Economy products in upcoming
quarterly periods.
In the first half of 2011, revenue achieved by the Infomail Business Area
(addressed and unaddressed direct mail items) rose by 5.6% on a comparable
basis, or EUR 11.7m. Volume increased for both addressed and unaddressed mail
items, reflecting the good economic development of the advertising industry.
The joint venture MEILLERGHP established at the end of 2010 showed operational
improvements in the merger phase, as expected.
Revenue of the Media Post Business Area also developed positively, rising by
1.9%, or EUR 1.2m.
On balance, EBITDA of the Mail Division improved by 4.8% to EUR 143.5m during
the first half-year of 2011. At the same time, EBIT rose 10.2% to EUR 130.4m.
PARCEL & LOGISTICS DIVISION
External sales of the Parcel & Logistics Division climbed 6.2% in the first
half of 2011, to EUR 410.9m. The reason for this increase was higher parcel
volumes despite price pressure in almost all markets.
The premium parcel product segment (parcel delivery within 24 hours), which is
mainly used in the business-to-business area, generated a revenue increase of
5.6% in the first half of 2011, to EUR 321.0m. The German subsidiary trans-o-
flex accounted for more than three quarters of this revenue. Parcel volumes
from business customers in Austria and in South East and Eastern Europe also
continued to develop very positively. Revenue growth was also achieved in
Belgium and the Netherlands, where the restructuring efforts are intensified
and outsourcing measures are carried out.
The standard parcels product segment in Austria used mainly for shipments to
private customers also achieved growth. Revenue climbed by 1.8%, to EUR 79.5m.
Accordingly, earnings of the Parcel & Logistics Division increased, with EBIT
improving by 69.3% to EUR 10.3m.
BRANCH NETWORK DIVISION
The structural adjustments taking place in the branch network are reflected in
the changed structure of postal service points. The number of third-party
operated postal partner offices has increased from 756 in June 2010 to 1,212 at
the reporting date of June 30, 2011. On balance, Austrian Post had 1,876 postal
service points at the end of June 2011, compared to 1,807 one year earlier.
This change affects the revenue and cost structure of the Branch Network
Division, as does the contractually redefined partnership with BAWAG P.S.K.
Since the beginning of 2011, financial services are no longer based on
commissions but compensated primarily on the basis of the actual costs
incurred.
At a year-on-year comparison, external sales of the Branch Network Division
fell by 6.2%, which is related to the new compensation agreement concluded with
BAWAG P.S.K. as well as to decreasing sales of telecommunications products.
Internal sales with postal services further decreased slightly by 1.2% in the
first half-year 2011. There has been a general reduction in the volume of
letters posted via the branch network. Moreover, letters are increasingly being
picked up directly from large customers within the context of the enhanced
services offered by Austrian Post. Earnings of the Branch Network Division
improved as a consequence of the structural changes. Accordingly, EBIT was up
by EUR 3.9m in the first half of 2011 to minus EUR 7.7m.
The new strategic branch office cooperation with the banking partner BAWAG
P.S.K. is being rapidly implemented. 132 jointly operated outlets had been
adapted and newly opened as at the end of June 2011. By the end of the year,
approximately 350 branch offices will offer the opportunity for both partners
to focus on their respective core competences.
The half-year financial report 2011 is available in the internet:
www.post.at/ir/en --> Publications --> Financial Reports
Further inquiry note:
Austrian Post
Head of Investor Relations
DI Harald Hagenauer
Tel.: +43 57767-30400
harald.hagenauer@post.at
Austrian Post
Head of Press & Internal Communications
Mag. Ina Sabitzer
Tel.: +43 577 67-21763
ina.sabitzer@post.at
Austrian Post
Press Spokesman
Michael Homola
Tel.: +43 577 67-32010
michael.homola@post.at
end of announcement euro adhoc
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issuer: Österreichische Post AG
Postgasse 8
A-1010 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
Original content of: Österreichische Post AG, transmitted by news aktuell