Austrian Post increased profits and revenues last year thanks to stable mail business and abetter performance by its parcels and logistics division.
The postal operator increased 2010 revenue fractionally by 0.3% to €2.35 billion on alike-for-like basis, although it reported a 0.2% revenue drop excluding special effects. Decliningmail revenues were compensated by higher parcel and logistics revenues.
Austrian Post improved its operating profit by 5% to €156.9 million, which was an EBIT margin of6.7%. The net profit went up by 48.5% to €118.1 million. The improvement was largely generated bycost savings, with staff costs reduced by 1.6% last year. The average number of employees fell by3.7% to 24,969 people.
“In continuing to pursue our current business strategy, we will do everything in our power tocompensate for the downward pressure on revenue resulting from electronic substitution in lettermail by achieving growth in other business areas,” said CEO Georg Pölzl. “On balance, we are aimingto achieve a revenue growth of between 1% and 2% in 2011, and the EBITDA margin should be at theupper end of our targeted range of 10% to 12%,” he added.
In 2010, Austrian Post’s Mail division had a 0.5% drop in revenue to €1.39 billion. The trendtowards electronic substitution of letters continued, along with the drop in high value mail items.Letter mail revenues dropped 2.5%. But intensive customer acquisition efforts combined withpositive one-off effects, such as numerous elections and one additional working day in 2010,managed to counteract this trend together with the positive development for advertising mail. Thedivision improved operating profits by 7.7% to €238 million, excluding €3.3 million worth ofvoluntary severe payments, thanks to efficiency improvements.
The Parcel & Logistics division improved its revenue by 4.4% to €802 million and achieved afinancial turnaround with EBIT of €10.5 million compared to a €9.3 million deficit in 2009.Although the price situation remained tense, the division succeeded in increasing parcel volumes aswell as attracting new customers. Revenues in Austria rose 9.6% overall.
The premium parcel product segment (parcel delivery within 24 hours) increased revenue by 1% to€630.5 million in 2010. German subsidiary trans-o-flex, which accounts for about 75% of thissegment, increased revenues by 8.5% on an adjusted basis, excluding the termination of loss-makingtransport logistics operations in the middle of 2009. The business parcel segment in Austria, whereAustrian Post enjoys a 15% market share, and in South East and Eastern Europe also continued todevelop very positively with an 11.5% revenue increase.
The standard parcels segment in Austria posted an even higher growth rate, with revenue risingby 19.5% to €160.8m. The main reasons for this positive development were organic growth, theincreased mail order business since June 2009 as well as parcel volumes shifted from the premium tothe standard segment.
Looking ahead, Austrian Post said it expects the same international macroeconomic trendsprevailing in 2010 to continue in 2011. The electronic substitution of letters, effects arisingfrom postal market liberalisation and volume growth for parcel services will continue to have amajor impact on business development.
The company also expects the volume of addressed letter mail to decline by 3-5% in Austria inline with international trends. This will be primarily driven by electronic substitution of lettersalong with the trend towards higher direct mail volumes. Due to improved international economicconditions, growth of over 6% p.a. is expected in the Parcel & Logistics Division on amedium-term basis and also in the 2011 financial year.
The top priority in the company’s international business will be to enhance performance andexpand existing networks. Potential acquisitions will only take place in the core business areas ofAustrian Post, and only for companies with growth-oriented business models. No major acquisitionsare expected at the present time.
* Walter Hitziger, present head of Mail, has been named head of the Austrian Post’s newMail/Retail division while Walter Oblin will replace Rudolf Jettmar as CfO on the latter’sretirement in June 2012.
