Austrian Post has announced moderate growth of 5.4% in revenues for 2008 but a drop in profits dueto the loss of two important parcels customers in the Austrian market, integration costs of new
subsidiaries as well as higher costs due to increased fuel and transport prices.The postal and logistics group increased revenues last year by 5.4% to € 2,441.4 million.Growth was primarily driven by acquisitions, but also included organic growth of 0.8%. So far,Austrian Post has hardly been impacted by the financial crisis in 2008 mainly due to the solidbalance sheet structure with an equity ratio on 40% and low net debt, enabling the company tooperate without any external borrowing requirements. Investments and acquisitions have beenfinanced from the current cash flow, Austrian Post said in a statement.
In 2008, earnings before interest, tax, depreciation and amortisation (EBITDA) improved by9.9% above the comparable level of 2007 to € 321.7 million, resulting in an EBITDA margin of 13.2%.Earnings before interest and tax (EBIT) increased by 4.1% amounting to €169.5 million in 2008. TheGroup net profit, however, was down 3.1% to €118.9 million from €122.6 million in 2007.
The Parcels and Logistics division had to cope with a decline in revenues and earnings in theAustrian parcels segment. But the streamlining of the company’s logistics operations initiated as aresponse to this change in the Austrian market proceeded as planned. A third of the parcel deliverybases were closed and letter mail and parcel logistics were merged wherever possible. Revenuesincreased by 6.4% to €785.9 million thanks to higher revenues derived from the Premium Parcelservice in Austria (parcel delivery within 24 hours) and internationally, as well as growthgenerated by the newly-acquired subsidiaries. The acquisitions contributed € 45.8 million of totalrevenue. The most significant share of revenues of about € 500 million was achieved by the AustrianPost subsidiary trans-o-flex in Germany, which focuses on pharmaceutical logistics, combinedfreight and temperature-controlled transport services. Moreover, the network in Western Europe wasfurther expanded based on the acquisition of the Belgian company HSH. South East Europe and EasternEurope contributed approximately 60 million in revenues.
Revenues of the Mail Division, on the contrary, improved during the year by 5.7% to €1.46billion, showing good revenue development in all three business areas. Revenue of the Letter MailBusiness Area remained almost constant, despite the ongoing trend to electronic substitution,whereas the Infomail Business Area that includes addressed and unaddressed direct mail items andthe Media Post Business Area posted solid organic growth.
As in the past, precautionary measures were taken by the company to avoid both operationaland balance sheet risks. These measures include the ongoing evaluation of assets and impairmentlosses taken on property, plant and equipment and intangible assets, as well as the reduction inthe valuation of Austrian Post’s stake in the consortium BAWAG PSK. Accordingly, Austrian Postenjoys a strong equity ratio of 40% at the end of 2008 and a low net debt.
Today Austrian Post is confronted with a fundamental change in the postal market. The companysaid that it must make the necessary preparations ahead of time in order to come to terms with thecomplete liberalisation of the postal sector in 2011.
“All measures designed to further optimise the economic situation of the company, ensurestability and generate value are based on the unanimous decision of the entire Management Board.Austrian Post will continue to attach great importance to the future of Austria as a businesslocation and providing all Austrians with high quality services in the future,” said RudolfJettmar, Member of the Management Board of Austrian Post and Interim CEO.
Continuity in the management and further development of the Group is ensured at all times,even after the resignation of Anton Wais from the Management Board of Austrian Post for healthreasons, the company added.
In 2009, stability and value generation remain top priorities for Austrian Post. However, itis becoming increasingly difficult to develop a precise outlook, because the uncertain businessenvironment reduces the reliability of any forecasts. The outlook for 2009 assumes that the overallmarket environment for Austrian Post and consumer demand will not deteriorate even further thanpreviously expected.
In the Mail Division, letter mail volumes are expected to go further down due to the effectsof electronic media substitution. However, the company plans to counteract this trend byintensifying the development of direct mail items (business-to-business communications) andlaunching new services along the letter mail delivery value chain.
The Parcel and Logistics Division expects largely stable transport volumes in the face ofongoing intense competition. The increasing Internet business will continue to serve as a growthdriver for parcel volumes, along with Austrian Post’s growing market share in the Austrian B2Bbusiness.
Austrian Post concluded that ensuring nationwide postal services and fair conditions for theAustrian postal sector by means of a new Austrian Postal Act will be important milestones for 2009against the backdrop of the complete liberalisation of the postal market in 2011.
