Austrian Post is ready to invest up to EUR 350 million in acquisitions over the next 2-3 years toexpand its parcel logistics business, primarily through German subsidiary trans-o-flex, and to
develop added-value mail services, senior executives announced today.The listed postal group has budgeted EUR 150 million for logistics acquisitions in WesternEurope, some EUR 80 million for takeovers in Central and Eastern Europe, and a further EUR 120million for “new business”, including purchases of added-value mail service providers, AustrianPost chairman Anton Wais told a press briefing in Frankfurt. Investment would be funded from thepostal operator’s cash-flow.
Austrian Post will focus on geographic and product expansion in Europe, but there are noplans for a pan-European parcels network with linehaul services, he stressed. With its strongdelivery network, however, the group could become a kind of “local integrator”. “We want to be amedium-sized European group. We think in millions, not in billions,” Wais commented.
Under its geographical expansion, the group may seek strategic stakes in partner companies inkey markets but does not need to “fill in the gaps”, commented TOF managing director Klaus Heinz.Austrian Post has just completed the acquisitions of VOP in Belgium and DDS in the Netherlands,which will be integrated into the TOF-led Eurodis network. Other key Eurodis partners include Tatex(France), Tufnells (UK), PNL (Scandinavia), Redur (Iberia) and Bartolini (Italy).
Outlining Austrian Post’s parcel logistics strategy following the acquisition of 74.9% intrans-o-flex at the start of this year, Wais described the German company as “a strategic platform”for future growth with its focus on “combi-freight” shipments (parcels and pallets) and strongpresence in sectors such as life sciences/healthcare, consumer electronics and cosmetics. AustrianPost was likely to buy out the TOF minority shareholder “in the foreseeable future”, probably in2008 or 2009, he added.
“We will further exploit the success of trans-o-flex as a brand and increase its value. Weaffirm our complete support for the company and its management in their efforts to continuepursuing the business strategy which has been mapped out, attracting customers through innovativeindustry solutions and quality leadership”, Wais declared.
Trans-o-flex will focus on improving its current Ebit margin of about 4% through a betterproduct mix with higher yields rather than on sales growth, Heinz stressed. Turnover is likely togrow about 2% this year on the 2006 figure of EUR 480 million, but shipment volumes will drop from51 million to about 49 million. At the same time, TOF will develop more special products such asthe new temperature-controlled service ThermoMed, he added.
In Central and Eastern Europe, Austrian Post will build up its presence as a “localintegrator” with final mile parcel deliveries through subsidiaries such as SPS/In Time (Slovakia),Road Parcel (Hungary) and Overseas (Croatia), Wais said.
In all, the Parcels & Logistics division, also including the B2B parcel business inAustria, should generate an Ebit of 4%-5% in the medium-term, while the overall group, includingthe highly profitable Austrian mail business, would achieve Ebit of about 7% – 8%, Wais said.
Asked about reports that Austrian Post might lose Quelle as a B2C customer in Austria to newentrant Hermes, Wais said negotiations with the German mail order group were still continuing.Hermes’ launch customer in Austria is parent company Otto Group, for which it will carry abouteight million parcels, and impact Austrian Post Ebit by some EUR 20 – 25 million.
