Austrian Post today announced a 10% improvement in Q3 operating profits driven by better parcelresults and ongoing cost savings. It also named a new head of the parcel & logistics
division.The part-privatised postal group had a 0.7% drop in Q3 revenues to €563.1 million but EBIT wasup 10.9% at €20.3 million due to lower staff and operating expenses. The net profit rose 25% to €14million. Over the first nine months, Austrian Post recorded a 0.6% revenue drop to €1,713.2 millionwhile EBIT rose 1.2% to €94.8 million. It reiterated its full-year outlook of lower revenues butstable EBIT at last year’s level.
Key trends included a slowdown in the mail volume decline while parcels & logistics growthalmost compensated for lower revenues in other businesses, CEO Georg Pölzl stated.
During the first nine months of 2010, revenue of the Mail Division fell 0.7% to €1,011 million.Q3 revenues dropped 0.4% to €329.1 million. Letter mail revenues dropped but there was slightgrowth for Infomail (direct mail) and Media Post revenues. EBIT, excluding social plan costs, rose3.7% to €170.5 million over the nine months, while Q3 EBIT was 2% higher at €50.9 million. Theearnings improvement is primarily related to efficiency increases, accompanied by a reduction inboth operating expenses and direct personnel expenditures.
“The trend towards the electronic substitution of letters is continuing. However, the revenuedecrease was limited due to intensive efforts designed to attract new customers, positive one-offeffects related to elections and an additional working day in the second quarter in comparison tothe prior-year period,” the company noted.
The Parcel & Logistics Division was the main growth driver for Austrian Post with highervolumes and revenues, and more new customers. Its revenue rose 3.8% in the first three quarters of2010 to €582.9 million, with Q3 revenues up 2.9% at €195.8 million. The division achieved afinancial turnaround, with nine-month EBIT of €9 million, a €15.3 million improvement on last year.The Q3 operating profit of €2.9 million compared to a €2.9 million loss in the same period of2009.
The premium parcel product segment (parcel delivery within 24 hours) increased revenue by 0.3%to €460.7 million in the first nine months of 2010. Adjusted for the termination of loss-makingtransport logistics operations in Germany, this business line had a 7% volume increase, mainlyrelated to new customer acquisition. The German subsidiary trans-o-flex, which generates about 75%of premium parcel revenue, grew 1.1% over the nine months, including a 2.6% increase in Q3. Thebusiness parcel segment in Austria as well as in South East and Eastern Europe also continued todevelop very positively. In the latter region, Austrian Post’s subsidiaries grew by 12.6% in totalover the first nine months of the year.
The standard parcels segment in Austria posted an even higher growth rate, rising by 20% to€114.2 million. The main reasons for this positive development were organic growth, the increasedmail order business since June 2009 as well as parcel volumes shifted from the premium to thestandard segment.
The loss-making postal branch network had a 16.7% revenue drop to €117.6 million over the ninemonths. Major developments included the opening of more partner outlets and the extendedpartnership with the bank BAWAG P.S.K. for a full range of postal and financial products in some500 post offices.
For 2010 as a whole, Austrian Post expects the same trends affecting business development in theprevious quarters to continue in the fourth quarter and thus for the entire 2010 financial year.The company expects total group revenue in 2010 to decrease by 1% to 2%, based on declining volumesin the Mail and Branch Network Divisions accompanied by an increase in business volume in theParcel & Logistics Division. The development of operating costs and earnings is alsoanticipated to remain constant. In line with the prevailing tendencies in the first three quarters,the prospect of achieving a Group EBIT in 2010 at last year’s level seems realistic, it added.
Looking ahead to next year, Austrian Post stressed that in order to effectively counteract thestructural changes taking place in the postal business, it will continue to take all the measuresit considers necessary to enhance the efficiency and productivity of the company. “Against thebackdrop of the upcoming full-scale liberalisation of the Austrian letter mail market as of January1, 2011, we are confident that we are moving in the right direction. The top priority is to offerefficient and innovative services in line with market requirements,” Pölzl said. The aim is tomaintain an outstanding level of service, and to ensure an earnings situation featuring thetargeted EBITDA margin of between 10% and 12% annually.
Austrian Post said it has presented two planned changes in its General Terms and Conditions tothe responsible regulatory authority. On the one hand, the terms and conditions were adapted toreflect revisions in the Austrian VAT law. For this reason, Austrian Post will offer bothVAT-taxable and VAT-free postal services starting in January 2011.
Furthermore, Austrian Post plans a change in the product structure of mail items encompassedunder the universal service obligation, which will take effect starting on April 1, 2011. The aimof the new product structure is to simplify the products and services offered by Austrian Post, andensure a market-oriented offering for business customers. The new model should lead to size-basedrates instead of the current weight-dependent prices. The priority will be on standard sizesoffering customers a simple and transparent pricing system. In the future, business customers willbe able to decide on the delivery speed, which is common practice around the world. A “premium”product will ensure letter mail delivery on the next working day, whereas a more favourably-priced “ economy” product will provide for letter mail delivery within two to three days. The finalisationand presentation of the new product portfolio will take place at the beginning of next year.
* Peter Umundum was yesterday named as the new head of the Parcels & Logistics division inplace of Carl-Gerold Mende, who will leave the post on March 31, 2011. Umundum has been awarded athree-year contract and will take up his seat on the Austrian Post Management Board on April 1,2011. A former media sector manager, he joined Austrian Post in 2005 as one of the ManagingDirectors of the Letter Division and took responsibility for various mail subsidiaries. CEOGeorg Pölzl commented: “I know Peter Umundum from our joint activities over the past 12 months andestimate him as a manager, who both gets things done and possesses the necessary strategic acumen.I am convinced that under his leadership, the growth policy adopted for our parcels and logisticsbusiness in Austria and our international participations can continue to be managed successfully.”& amp; amp; lt; /p>
