EANS-News: Österreichische Post AG
AUSTRIAN POST Q1 2015:
SLIGHT REVENUE INCREASE, EBIT BELOW THE PRIOR-YEAR LEVEL, RISE IN EPS AND
CASHFLOW, OUTLOOK FOR 2015 CONFIRMED
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3-month report
- Revenue
- Slight revenue increase of 0.6% to EUR 601.9m
- Decline in the mail business (-0.3%) offset by growth in the parcel segment
(+2.2%)
- Earnings
- EBIT down 7.4% to EUR 53.9m
- Earnings impacted by interest effects on staff-related provisions
- Earnings per share up 0.4% to EUR 0.65
- Cash flow and balance sheet
- Increase in cash flow from operating activities to EUR 59.6m
- High amount of cash and cash equivalents and low level of financial
liabilities
- Outlook for 2015 confirmed
- Aim to achieve revenue growth of 1-2%
- Targeted EBITDA margin of around 12% and further EBIT improvement
OVERVIEW OF AUSTRIAN POST
In the first quarter of 2015, revenue of the Austrian Post Group at EUR 601.9m
was slightly above the prior-year level. Revenue growth of 2.2% in the parcel
segment completely offset the slight decline of 0.3% in the mail business, which
continues to be affected by the ongoing electronic substitution of traditional
letter mail. In addition, branch network revenue decreased. The trend towards
increased e-commerce is continuing in the parcel segment, leading to further
growth of consumer parcel volumes. However, intensified competition and price
pressure are impacting the parcel markets.
Earnings before interest and tax (EBIT) at EUR 53.9m were down by EUR 4.3m from
the previous year. This decline also includes expenses resulting from increased
staff-related provisions due to the ongoing low interest rate environment. On an
operational basis, measures to further optimise costs and enhance efficiency
were continued. Moreover, Austrian Post also pressed ahead with investments at
the customer interface during the reporting period, and continued to expand its
self-service offering. Austrian Post customers now have about 270 self-service
zones and 150 pick-up stations at their disposal throughout Austria. In spite of
Austrian Post's extensive investment programme, cash flow is above the
prior-year level, securing the company's ability to finance investments and
dividends.
As a result, Austrian Post was able to distribute a dividend of EUR 1.95 per
share on April 29, 2015 for the past financial year. Thus, Austrian Post once
again underlines its clear capital market positioning as a reliable dividend
stock. "The focus of our strategic activities is on reliability and stability
for the owners and other stakeholders of our company, and this approach will be
continued in the future", says Austrian Post CEO Georg Pölzl and adds: "Looking
ahead to the full year, we confirm the previously communicated outlook for 2015.
We expect a Group revenue increase in the range of 1-2%. At the same time, we
target an EBITDA margin of around 12% and a further improvement in EBIT."
REVENUE DEVELOPMENT IN DETAIL
In the first quarter of 2015, Group revenue of Austrian Post rose slightly by
0.6% compared to the prior-year level to EUR 601.9m. The parcel business showed
further revenue growth during the reporting period, thus offsetting the slight
revenue decline in the Mail & Branch Network Division.
All in all, revenue of the Mail & Branch Network Division was down 0.3% in the
reporting period to EUR 377.5m. This decline is due to the ongoing electronic
substitution of letters as well as decreasing revenue in the branch network.
Letter Mail & Mail Solutions revenue at EUR 206.4m declined slightly from the
previous year as expected. The basic trend towards declining mail volumes
resulting from the substitution of letters by electronic forms of communication
is continuing. In contrast, it is important to note the positive revenue effect
arising from the rise in postal rates as of March 1, 2015. Revenue in the Direct
Mail business rose 3.3% to EUR 109.1m in the first three months of 2015. The
individual customer segments in the Direct Mail business were subject to
differing volume trends during the period under review. Whereas the pressure
exerted by online business on traditional mail order companies and retail stores
led to reduced advertising spending by several customers, in particular
unaddressed direct mail items distributed on behalf of local suppliers
increased. Moreover, various advertising campaigns promoting special offers
shortly before Easter generated additional revenue in the reporting period.
Total revenue of the Parcel & Logistics Division rose by 2.2% in the first
quarter of 2015 to EUR 224.4m. 55% of total revenue in the Parcel & Logistics
Division was generated in Germany, 36% in Austria and 9% by the subsidiaries in
South East and Eastern Europe. Revenue in Germany fell by 2.5% in the first
three months of 2015. The challenging competitive situation and price pressure
in this market continue. In contrast, revenue in Austria rose by 8.1%, driven by
the above-mentioned trend towards online shopping and impetus provided by Easter
sales against the backdrop of intensive competition. The subsidiaries in South
East and Eastern Europe posted a revenue increase of 11.0% on the basis of
significant volume increases.
EXPENSE AND EARNINGS DEVELOPMENT
Raw materials, consumables and services used rose by 0.4% during the period
under review to EUR 184.5m, which is primarily due to higher expenditures for
distributors of direct mail items. Costs for external transport services
increased due to the higher parcel volumes in Austria and South East and Eastern
Europe. However, this was largely offset by the decrease in costs for external
transport services in Germany. In 2014, the trans-o-flex Group acquired several
distribution companies, through which previously outsourced delivery services
are now being handled internally.
Austrian Post's staff costs amounted to EUR 281.7m in the first quarter of 2015,
comprising a rise of 0.4% or EUR 1.2m. Staff costs in the comparable period of
2014 included wage-related contributions from previous periods totalling about
EUR 6m, whereas the current reporting period includes parameter adjustments for
interest-bearing staff-related provisions. The discount rate for various
staff-related provisions was reduced in the light of internationally low
interest rates, which in turn resulted in a negative earnings effect to the
amount of EUR 4.8m. Operational staff costs for salaries and wages adjusted to
take account of the effect of the integration of the distribution companies in
Germany remained at almost the same level as in the previous year.
In addition to the ongoing operational staff costs, there are also various
non-operational staff costs such as termination benefits and various changes in
provisions. Costs for termination benefits amounted to EUR 4.8m in the reporting
period, somewhat below the prior-year figure of EUR 5.6m. Costs for provisions
for employee under-utilisation increased in the reporting period, which is
mainly due to the above-mentioned discount rate adjustment.
Other operating expenses climbed 6.9% during the reporting period to EUR 76.3m,
which can be attributed to various IT projects amongst other factors, as well as
to slightly negative effects related to the sale of the Hungarian subsidiary
feibra Magyarország Kft.
Earnings before interest, tax, depreciation and amortisation (EBITDA) of
Austrian Post fell by 4.6%, or EUR 3.6m, in the first quarter of 2015 to EUR
75.1m. The corresponding EBITDA margin was 12.5%. One earnings effect in the
reporting period was the previously mentioned discount rate adjustment for
staff-related provisions. On balance, depreciation, amortisation and impairment
losses totalled EUR 21.2m during the reporting period, slightly down by EUR 0.7m
in a year-on-year comparison. Accordingly, earnings before interest and tax
(EBIT) in the first three months of 2015 reached a level of EUR 53.9m, a
decrease of 7.4% or EUR 4.3m from the previous year. The EBIT margin was 9.0%.
The other financial result improved from minus EUR 0.8m to EUR 3.4m, which is
mainly attributable to interest income arising from the early termination of a
cross-border leasing transaction in March 2015. After deducting income tax, the
Group's profit for the period (profit after tax) at EUR 43.8m was at the
prior-year level (+0.2%). This corresponds to undiluted earnings per share of
EUR 0.65 for the first three months of 2015.
From a divisional perspective, the Mail & Branch Network Division generated an
EBITDA of EUR 84.5m in the first quarter of 2015, a drop of 1.1%. EBIT of the
division at EUR 76.6m was down 1.7% or EUR 1.3m from the previous year. In
addition to decline in revenue, this development can also be attributed, amongst
other factors, to the minor negative effects arising as a result of the sale of
the subsidiary feibra Magyarorszaág Kft. and the joint venture company
MEILLERGHP.
EBITDA of the Parcel & Logistics Division amounted to EUR 12.3m in the first
three months of 2015, compared to EUR 10.7m in the previous year. EBIT in the
reporting period totalled EUR 7.2m, comprising an improvement of EUR 1.7m from
the prior-year figure of EUR 5.5m, which, however, included higher negative
effects such as write-downs and structural measures. The earnings situation in
Austria and South East and Eastern Europe was positive, whereas structural
changes continue to be carried out in Germany.
EBIT of the Corporate Division (including Consolidation) fell by EUR 4.7m to
minus EUR 29.9m. This decline is mainly due to the previously mentioned interest
rate effects for staff-related provisions. On balance, the reduction of the
discount rate for various staff-related provisions led to additional costs for
provisions of EUR 4.8m, which negatively impacted earnings mainly in the
Corporate Division.
CASH FLOW AND BALANCE SHEET
The cash flow from operating activities of EUR 59.6m surpassed the comparative
figure in the previous year by EUR 9.0m. This increase was due to the lower
income tax payments in a year-on-year comparison as well as lower payments for
liabilities related to international invoicing, among other things. The cash
flow from investing activities in the first three months of 2015 was positive at
EUR 33.7m. This 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 15.8m in the first quarter of 2015, somewhat higher than the comparable
level of EUR 11.2m in the previous year. In aggregate, the free cash flow during
the reporting period was EUR 93.3m, up from EUR 42.8m in the previous year. The
free cash flow before acquisitions/securities reached EUR 104.6m. Even taking
the special effect related to the sale of the former corporate headquarters into
consideration, the free cash flow was still somewhat above the prior-year figure
of EUR 38.0m.
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 745.7m as at March 31, 2015,
corresponding to an equity ratio of 43.7%. An analysis of the financial position
of the company shows a high level of current and non-current financial resources
of EUR 419.1m, including cash and cash equivalents of EUR 356.3m as well as
financial investments in securities of EUR 62.7m. These financial resources
contrast with financial liabilities of only EUR 16.8m.
EMPLOYEES
The average number of employees (full-time equivalents) at the Austrian Post
Group totalled 23,330 people during the first three months of 2015. Most of
Austrian Post's staff or a total of 17,913 full-time equivalents is employed by
the parent company Österreichische Post AG.
OUTLOOK 2015
The expected basic trends in the mail and logistics business were also reflected
in first quarter 2015 results, allowing Austrian Post to confirm its previously
communicated outlook for the entire year 2015. With respect to revenue
development, the business model of Austrian Post is oriented to compensate for
the decline in the mail segment by generating increases in the parcel business.
On this basis, average revenue growth should total 1-2% p.a. The rise in Group
revenue in 2015 is expected to be of similar magnitude.
Revenue in the mail segment continues to be impacted by the ongoing volume
decline for addressed mail items as a result of electronic substitution. In line
with international trends, the decrease in addressed mail volume is likely to
amount to 3-5% per year. The market for addressed and unaddressed direct mail
items will continue to be subject to differing volume trends. Several customer
segments are under pressure from the increasing activities of online businesses,
whereas other segments e.g. local suppliers show a positive development.
Moreover, the decline in branch network revenue, especially for
telecommunications products and financial services, is expected to continue
during 2015. Taking account of these factors as well as the positive price
effects of the increase in postal rates in March 2015, the Mail & Branch Network
Division should report an overall stable or slightly positive revenue
development in 2015.
The private and business parcel segments of the Parcel & Logistics Division are
impacted by various trends. Annual growth of 3-6% driven by the ongoing
expansion of e-commerce is anticipated in the private customer parcel segment,
depending on the region. The positive development of the business parcel segment
depends on a stable economy and competitive situation. However, the subdued
economic situation is unlikely to provide any impetus to parcel growth. For this
reason, strong competition is leading to enhanced pressure on prices and market
shares. Structures and processes in both mail and parcel logistics are being
consistently optimised in order to further enhance the efficiency of the
services provided. Profitability is the top priority, especially in the
company's international business operations. One focal point is the continuation
of the efficiency enhancement programme of the trans-of-flex Group, entailing a
reorganisation of process, distribution and staff structures.
Austrian Post remains committed to its target of achieving a sustainable EBITDA
margin of around 12%. The company is also pursuing this objective for the 2015
financial year, along with the goal of achieving an ongoing improvement in
earnings before interest and tax (EBIT).
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. As a result, total
operational capital expenditures (CAPEX) of EUR 80-90m are planned, and will
focus on sorting technologies, logistics and customer solutions. Furthermore,
Austrian Post recently began construction of its new corporate headquarters in
Vienna's third district, with the project expected to be completed in 2017.
KEY FIGURES
Change
EUR m Q1 2014 Q1 2015 % EUR m
Revenue 598,4 601,9 0,6% 3,5
thereof Mail & Branch Network Division1 378,7 377,5 -0,3% -1,2
thereof Parcel & Logistics Division1 219,5 224,4 2,2% 4,9
thereof Corporate1 0,2 0,0 -84,7% -0,2
Other operating income 16,5 16,4 -1,1% -0,2
Raw materials, consumables and services used -183,8 -184,5 0,4% 0,7
Staff costs -280,6 -281,7 0,4% 1,2
Other operating expenses -71,4 -76,3 6,9% 4,9
Results from financial assets accounted for using -0,4 -0,6 -71,2% -0,3
the equity method
Earnings before interest, tax, depreciation and 78,8 75,1 -4,6% -3,6
amortisation (EBITDA)
Depreciation, amortisation and impairments -20,6 -21,2 3,2% 0,7
Earnings before interest and tax (EBIT) 58,2 53,9 -7,4% -4,3
thereof Mail & Branch Network Division 77,9 76,6 -1,7% -1,3
thereof Parcel & Logistics Division 5,5 7,2 30,9% 1,7
thereof Corporate/Consolidation -25,2 -29,9 -18,6% -4,7
Other financial result -0,8 3,4 >100% 4,2
Earnings before tax (EBT) 57,4 57,4 -0,2% -0,1
Income tax -13,8 -13,6 -1,4% -0,2
Profit for the period 43,7 43,8 0,2% 0,1
Earnings per share (EUR)2 0,64 0,65 0,4% 0,0
Cash flow from operating activities 50,6 59,6 17,8% 9,0
Investments in property, plant and equipment -11,2 -15,8 -41,8% -4,7
(CAPEX)
Free cash flow before acquisitions/securities 38,0 104,6 >100% 66,6
1 The presentation of revenue was adjusted so that cross-segment business
relationships among subsidiaries or between subsidiaries and Austrian Post are
no longer included in the revenue with third parties (formerly external sales).
2 Undiluted earnings per share in relation to 67,552,638 shares
The interim financial report Q1 2015 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
Ingeborg Gratzer
Head of Press Relations & Internal Communications
Tel.: +43 (0) 57767-24730
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 von: Österreichische Post AG, übermittelt durch news aktuell