EANS-News: Österreichische Post AG
AUSTRIAN POST H1 2016: SLIGHT INCREASE IN
REVENUE ADJUSTED FOR TRANS-O-FLEX SALE; EBIT UP 2.2%; STABLE OUTLOOK CONFIRMED
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6-month report
- REVENUE
- Revenue development negatively impacted by the sale of trans-o-flex
- Revenue excl. trans-o-flex rose by 0.6%
- EARNINGS
- EBIT increase of 2.2% to EUR 98.6m
- Q2 operating earnings (EBIT) up 11.7%
- CASH FLOW AND BALANCE SHEET
- 1.6% rise in the cash flow from operating activities to EUR 109.3m
- Strong cash position and low level of financial liabilities
- OUTLOOK
- Revenue forecast 2016 of EUR 2.0bn (current business portfolio)
- Targeted stable development of operating earnings (EBIT) for 2016 and 2017
OVERVIEW OF AUSTRIAN POST
In the first half of 2016, Group revenue of Austrian Post fell from the prior-
year level of EUR 1,175.0m to EUR 1,071.1m. The revenue decrease can be fully
attributed to the sale of its subsidiary trans-o-flex. Adjusted for the disposal
of trans-o-flex at the beginning of April 2016, Group revenue in the first half
of 2016 rose by 0.6% year-on-year and by 2.3% in the second quarter of 2016.
The mail business continues to be impacted by the structural trend towards
declining letter mail volumes caused by electronic substitution. In particular,
public sector customers as well as banks are reducing their mail volumes. During
the reporting period, business with direct mail showed a diverging development
of individual advertising customer segments. The volume of addressed direct mail
items declined in contrast to the rise in unaddressed mail volumes. In spite of
these difficult conditions, Austrian Post recorded a stable revenue development
in the Mail & Branch Network Division in the first six months of 2016. Second-
quarter revenue rose by 1.6%, driven by positive election effects including a
record number of votes that were cast in the Austrian presidential elections by
absentee ballot.
The trend towards increasing e-commerce is continuing in the parcel segment,
leading to further growth of parcel volumes in Austria in spite of intensified
competition. Adjusted for the revenue of trans-o-flex, the Parcel & Logistics
Division showed solid revenue growth of 3.7% in the first half of 2016 and 4.9%
in the second quarter of the year.
Thanks to the good revenue development and stringent cost discipline, operating
earnings (EBIT) of Austrian Post were up 2.2% to EUR 98.6m. EBIT in the second
quarter even climbed by 11.7% to EUR 47.6m. Austrian Post is continuously
optimising structures and processes in its mail and parcel logistics businesses
in order to further reduce costs and enhance efficiency. Moreover, Austrian Post
is increasing the attractiveness of its service offering. For this reason, the
company will expand its service portfolio at the beginning of 2017 in order to
provide even improved and simpler shipping options for national and
international online retailers. For example, it will be possible to send a so-
called "Packet", an optimal solution ranging somewhere between a traditional
letter and a secure parcel. The "Packet" is as easy to handle as a letter, but
still offers the popular "track & trace" feature of a parcel.
"Innovative solutions as well as structural changes are necessary as a means of
further developing the business model of our company", says Austrian Post CEO
Georg Pölzl. "This is the only way we can generate sustainable value for the
benefit of all stakeholders, especially customers, employees and shareholders
and thus maintain our attractive dividend policy."
REVENUE DEVELOPMENT IN DETAIL
In the first half of 2016, Group revenue of Austrian Post fell by EUR 103.9m
from the prior-year level to EUR 1,071.1m, entirely driven by the sale of trans-
o-flex. Adjusted for this disposal, revenue in the first half of 2016 rose by
0.6% in a year-on-year comparison, and 2.3% in the second quarter of 2016.
Mail & Branch Network Division revenue fell slightly by 0.2% to EUR 736.8m
during the period under review. However, division revenue was up 1.6% in the
second quarter of 2016. The basic trend towards e-substitution, which implies
the replacement of traditional letter mail by electronic forms of communication,
is continuing. However, elections generated higher revenue contributions than in
the previous year. In the first half of 2016, Letter Mail & Mail Solutions
revenue at EUR 403.5m represents an increase of 0.7% from the prior-year level,
with revenue in this business area even rising by 2.2% in the second quarter. In
the first half of 2016, revenue generated by the Direct Mail business fell by
1.9% to EUR 206.2m. First-quarter revenue
declined but increased by 2.2% in the second quarter of the year due to positive
revenue effects from elections. Media Post revenue rose by 1.1% year-on-year to
EUR 70.4m (Q2 2016: +0.2%). In contrast, Branch Services revenue was down 1.5%
to EUR 56.7m during the period under review. In the second quarter of 2016, the
positive development of mobile products was offset by a change in the
corresponding invoicing model. In aggregate, this led to a second-quarter
revenue decline of 2.9% in this business area.
Total revenue of the Parcel & Logistics Division fell from EUR 436.9m to EUR
334.3m in the first half of 2016 as a consequence of the previously-mentioned
sale of the trans-o-flex subsidiary. Adjusted to take account of trans-o-flex
revenue, the division actually generated a revenue increase of 3.7% in the first
half of 2016 and 4.9% in the second quarter of the year. Business developed
positively in Austria (+1.9%) despite tough competition and also expanded in the
CEE markets (+3.1%), whereas Austrian Post disposed of its German subsidiary
trans-o-flex on April 8, 2016.
With respect to its strategic investment in the Turkish parcel services provider
Aras Kargo, Austrian Post initiated a call option process in order to acquire an
additional 50% of the shares. However, there are differences of opinion with the
current majority shareholder regarding implementation of the call option
agreement as well as the valuation of the shares. Accordingly, as in the past,
Austrian Post will continue to consolidate its 25% stake in Aras Kargo at equity
until further notice.
EXPENSE AND EARNINGS DEVELOPMENT
Raw materials, consumables and services used decreased from EUR 360.0m to EUR
286.3m during the period under review, which is due to the sale of trans-o-flex.
However, the costs for services used increased, particularly as a consequence of
higher international business volumes.
Austrian Post's staff costs amounted to EUR 545.3m in the first half-year 2016,
comprising a drop of 1.2%. The disposal of trans-o-flex reduced staff costs,
whereas the adjustment of the interest rate for various staff-related provisions
led to a negative earnings effect of EUR 14.6m in the first half of 2016. In the
previous year, this effect amounted to EUR 3.0m. The operational staff costs for
salaries and wages, which are part of total staff costs, fell by 2.4% from the
prior-year level due to the sale of trans-o-flex. In addition to the ongoing
operational staff costs, staff costs also encompass various non-operational
costs such as termination benefits and changes in provisions, which are
primarily related to the specific employment situation of civil servants in
Austria. In addition to the previously-mentioned adjustment to the parameters
for interest-bearing provisions, costs for termination benefits totalled EUR
10.3m during the period under review compared to EUR 11.0m in the previous year.
In the first half of 2016, other operating income at EUR 36.2m was 10.4% higher
than the prior-year figure, whereas other operating expenses were down 10.8% to
EUR 139.1m. In both cases, the differences can be attributed to the disposal of
the trans-o-flex subsidiary.
On balance, earnings before interest, tax, depreciation and amortisation
(EBITDA) of Austrian Post fell by 1.8% or EUR 2.6m to EUR 137.2m in the first
half-year 2016. The corresponding EBITDA margin was 12.8%, comprising an
improvement of 0.9 percentage points from the comparable prior-year level.
EBITDA in the second quarter of 2016 was up 4.9% to EUR 67.8m.
Total depreciation, amortisation and impairment losses in the reporting period
amounted to EUR 38.5m, a decrease of EUR 4.7m from the first six months of 2015.
This difference is mainly due to the disposal of trans-o-flex. An impairment
loss on goodwill for the subsidiary PostMaster s.r.l., Romania, to the amount of
EUR 2.0m had the opposite effect. On balance, earnings before interest and tax
(EBIT) in the first six months of the 2016 financial year reached a level of EUR
98.6m, representing an increase of 2.2% year-on-year. The EBIT margin climbed
from 8.2% to 9.2%. EBIT improved by 11.7% to EUR 47.6m in the second quarter of
2016.
The other financial result fell to minus EUR 0.5m from EUR 3.4m in the prior-
year period. This development is mainly attributable to the special effect
totalling EUR 3.3m arising in March 2015 as a consequence of the early
termination of a cross-border leasing transaction of various postal sorting
facilities. Accordingly, earnings before tax (EBT) in the first half of 2016
were EUR 98.1m, compared to EUR 99.9m in the previous year. The income tax
expense rose 8.3% to EUR 24.4m as a result of changes in tax laws. After
deducting income tax, the Group's profit for the period (profit after tax)
amounted to EUR 73.8m in the first half of 2016, down from the prior-year figure
of EUR 77.4m. Accordingly, undiluted earnings per share equalled EUR 1.09 for
the first six months of 2016.
From a divisional perspective, the Mail & Branch Network Division showed a
stable development compared to the previous year, generating an EBITDA of EUR
161.5m in the first half-year 2016. This reflected the solid revenue development
as well as strict cost discipline. EBIT of the division was down 1.5% or EUR
2.2m from the prior-year level to EUR 143.2m. This decrease is mainly due to the
impairment loss on goodwill for the Romanian subsidiary PostMaster s.r.l.
EBITDA of the Parcel & Logistics Division in the first six months of 2016
amounted to EUR 22.5m, compared to the prior-year level of EUR 23.1m. EBIT of
the division in the reporting period improved from EUR 12.5m to EUR 16.9m due to
the disposal of trans-o-flex.
The Corporate Division (including Consolidation) accounts for all non-allocable
expenses for central departments in the Group as well as staff-related
provisions assigned to it. Moreover, the division includes innovation management
and the development of new business models. EBIT of the Corporate Division
remained stable at minus EUR 61.5m, although the previously-mentioned parameter
adjustment for interest-bearing staff-related provisions resulting in expenses
totalling EUR 14.6m reduced divisional earnings by EUR 9.9m.
CASH FLOW AND BALANCE SHEET
Gross cash flow totalled EUR 138.3m in the first half-year 2016, compared to EUR
151.8m in the previous year. This difference is attributable to higher tax
payments. In contrast, the cash flow from operating activities of EUR 109.3m was
slightly above the prior-year level of EUR 107.7m.
The cash flow from investing activities reached a level of minus EUR 39.3m in
the first six months of 2016, compared to EUR 16.8m in the prior-year period.
This deviation was mainly related to the sale of Austrian Post's former
corporate headquarters in Vienna's first district, for which the outstanding
balance of the purchase price of EUR 60.0m was paid in the first quarter of
2015. Cash outflows for the acquisition of property, plant and equipment (CAPEX)
amounted to EUR 38.5m in the first half of 2016, above the level of EUR 32.0m in
the previous year. CAPEX included payments of EUR 19.1m relating to the
construction of Austrian Post's new corporate headquarters. In aggregate, free
cash flow during the reporting period was EUR 70.0m, down from EUR 124.4m in the
previous year. The difference to the prior-year is due to the above-mentioned
payment of the outstanding balance of the purchase price of Austrian Post's
former corporate headquarters in 2015. Adjusted to take account of this special
effect as well as payments for the new corporate headquarters, operating free
cash flow before acquisitions, securities and other cash flow from investing
activities amounted to EUR 89.9m in the first half of 2016, compared to the
prior-year figure of EUR 86.8m.
Austrian Post pursues a conservative balance sheet and financing structure. This
is demonstrated by the high equity ratio, low financial liabilities and the
solid level of cash and cash equivalents invested with the least possible risk.
Equity of the Austrian Post Group totalled EUR 573.7m as at June 30, 2016,
corresponding to an equity ratio of 39.3%. An analysis of the financial position
of the company shows a high level of current and non-current financial resources
of EUR 289.8m, including cash and cash equivalents of EUR 229.1m as well as
financial investments in securities of EUR 60.7m. These financial resources
contrast with financial liabilities of only EUR 4.8m.
EMPLOYEES
The average number of employees (full-time equivalents) at the Austrian Post
Group totalled 22,092 people during the first six months of 2016, comprising a
reduction of 1,252 employees from the prior-year period. The decrease is
primarily due to the disposal of the German subsidiary trans-o-flex. Most of
Austrian Post's staff or a total of 17,325 full-time equivalents are employed by
the parent company Österreichische Post AG.
OUTLOOK 2016
Austrian Post confirms its outlook for the entire year 2016 in light of current
trends and the company's solid performance in the second quarter of 2016.
Accordingly, on the basis of its current business portfolio, Austrian Post
continues to target revenue of EUR 2.0bn in the 2016 financial year following
the sale and deconsolidation of its German subsidiary trans-o-flex as at April
8, 2016.
The volume of addressed letter mail continues to decline. In contrast, the
parcel business driven by e-commerce is showing a consistently positive
development. In the mail business, Austrian Post still anticipates volume
declines of about 5% p.a. in the light of the increasing substitution of
addressed mail items by electronic forms of communication. The volume of direct
mail will show a diverging development in the individual customer segments and
product groups. Overall strong market growth in the Parcel & Logistics Division
will be accompanied by intensified competition and new, innovative customer
solutions.
The earnings forecast of Austrian Post also remains unchanged. The company
expects to generate stable operating earnings in 2016 with EBIT at the prior-
year level on the basis of current trends and developments. Structures and
processes are being continuously optimised in both mail and parcel logistics in
order to further reduce costs and enhance efficiency. Furthermore, it is crucial
to increase the attractiveness of Austrian Post's service offering. For this
reason, the service portfolio will be expanded at the beginning of 2017 in order
to provide even better and simpler shipping options for national and
international online retailers. For example, it will be possible to send a so-
called "Packet", an optimal solution ranging somewhere between a traditional
letter and a secure parcel. The "Packet" is as easy to handle as a letter, but
still offers the popular "track & trace" feature of a parcel. Innovative
solutions as well as structural changes are necessary as a means of continually
further developing the business model of the company. Austrian Post not only
aims to achieve stable operating earnings in 2016 but in 2017 as well.
The operating cash flow generated by Austrian Post will continue to be used
prudently and in a targeted manner to finance sustainable efficiency increases,
structural measures and future-oriented investments. With this in mind,
operational capital expenditure (CAPEX) of EUR 70-80m is planned in 2016,
focusing on sorting technologies, logistics and customer solutions. In addition,
Austrian Post is making good progress with construction of its new corporate
headquarters in Vienna's third district, scheduled for completion in 2017. The
expected cash flow development for the entire year 2016 should also enable
Austrian Post to adhere to its attractive dividend policy.
KEY FIGURES
Change
EUR m H1 2015* H1 2016 % EUR m Q2 2015* Q2 2016
Revenue 1,175.0 1,071.1 -8.8% -103.9 575.1 478.3
Revenue without
trans-o-flex 930.4 936.3 0.6% 5.8 456.2 466.6
thereof Mail & Branch
Network Division 738.0 736.8 -0.2% -1.3 360.5 366.3
thereof Parcel &
Logistics Division 436.9 334.3 -23.5% -102.6 214.5 112.1
thereof Corporate 0.1 0.0 - 0.0 0.0 0.0
Other operating income 32.8 36.2 10.4% 3.4 16.4 12.7
Raw materials,
consumables and
Services used -360.0 -286.3 20.5% 73.7 -177.5 -103.1
Staff costs -551.8 -545.3 1.2% 6.5 -270.1 -258.8
Other operating
expenses -156.0 -139.1 10.8% 16.9 -79.7 -61.9
Results from financial
assets accounted for
using the equity method -0.2 0.6 >100.0% 0.8 0.4 0.5
Earnings before interest,
tax, depreciation
and amortisation
(EBITDA) 139.7 137.2 -1.8% -2.6 64.6 67.8
Depreciation,
amortisation
and impairments -43.2 -38.5 10.8% 4.7 -22.0 -20.2
Earnings before
interest and tax
EBIT) 96.5 98.6 2.2% 2.1 42.6 47.6
thereof Mail & Branch
Network Division 145.4 143.2 -1.5% -2.2 68.8 71.7
thereof Parcel &
Logistics Division 12.5 16.9 35.4% 4.4 5.3 9.2
thereof Corporate/
Consolidation -61.4 -61.5 -0.2% -0.1 -31.5 -33.2
Other financial
result 3.4 -0.5 <-100.0% -3.9 -0.1 -0.3
Earnings before tax
(EBT) 99.9 98.1 -1.7% -1.7 42.5 47.3
Income tax -22.5 -24.4 -8.3% -1.9 -8.9 -12.2
Profit for the
period 77.4 73.8 -4.7% -3.6 33.6 35.1
Earnings per
share (EUR)** 1.14 1.09 -4.6% -0.05 0.50 0.52
Cash flow from
operating activities 107.7 109.3 1.6% 1.7 48.1 49.3
Investments in property,
plant and equipment
(CAPEX) -32.0 -38.5 -20.4% -6.5 -16.2 -21.4
Free cash flow before
acquisitions/securities 137.7 72.1 -47.7% -65.7 33.2 29.7
* The presentation of revenue in the Parcel & Logistics Division was adjusted.
Exported services are recognised according to the net method (previously
reported as revenue and expenses for services used).
** Undiluted earnings per share in relation to 67,552,638 shares
The interim financial report H1 2016 is available on the Internet at
www.post.at/ir --> Publications --> Financial Reports.
Further inquiry note:
Austrian Post
Harald Hagenauer
Head of Investor Relations, Group Auditing & Compliance
Tel.: +43 (0) 57767-30400
harald.hagenauer@post.at
Austrian Post
Ingeborg Gratzer
Head of Press Relations & Internal Communications
Tel.: +43 (0) 57767-32010
ingeborg.gratzer@post.at
end of announcement euro adhoc
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company: 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
Original content of: Österreichische Post AG, transmitted by news aktuell