Austrian Post today reported an unexpectedly strong start to the year, with first-quarter revenuesand earnings up 6 per cent and 7 per cent respectively, but said the revenue growth was largely due
to exceptional factors and expected only marginal growth for 2012 as a whole.Overall group revenue rose to €605.7m, with the newly established Mail & Branch NetworkDivision posting an increase of 6.2 per cent to €385m. The revenue of the Parcel & LogisticsDivision was up by 5.9 per cent to €220.8m, which was 6.6 per cent growth excluding thesubsidiaries in the Benelux that Austrian Post is currently disposing of. The B2B premium parcelsegment, based around German subsidiary trans-o-flex, increased revenues by 4.1 per cent to €169m,while the Austrian B2C parcels business increased revenues by 7.2 per cent to €44m.
First-quarter group earnings before interest, tax, depreciation and amortisation (EBITDA)improved to €75.8m, giving an EBITDA margin of 12.5 per cent. Earnings before interest and tax(EBIT) rose by 14.4 per cent to €55.8m, corresponding to an EBIT margin of 9.2 per cent.
From a divisional perspective, both divisions improved their operating results during theperiod under review. EBIT in the Mail & Branch Network Division rose in the first quarter to€74.4m, mainly as a consequence of the revenue increase. The Parcel & Logistics Division alsoshowed an improvement, with EBIT increasing from €5.2m to €7.6m.
The company said the good volume development “combined with structural measures implementedin the subsidiaries featuring a below-average performance” was leading to an improved marginsituation for the year 2012.
It said the first quarter had “proceeded very satisfactorily” for Austrian Post in both theparcel and mail segments. “Against the backdrop of generally dampened economic expectations inAustria and neighbouring countries, the postal business continues to be mainly impacted bypostal-specific trends – structural changes arising as a result of electronic substitution ofaddressed letters as well as the positive impetus on parcel shipment volumes provided by onlinebusiness.”
In addition to a “generally solid volume development”, special circumstances contributed tothe results. An additional working day compared to the first quarter of 2011, along with newinformation requirements on the part of customers in the finance, telecommunications and energysectors, had resulted in volume growth.
A spokesman told CEP-Research that the additional information requirements involved companiesfrom these sectors writing to customers in the first quarter, an effect that would not be repeatedlater in the year. This, plus the additional day, were the main factors in the first-quarterrevenue growth, although recent changes in the product portfolio offered by Austrian Post and inpricing appeared to have contributed to a shift in volumes from addressed direct mail items tohigher-quality, and higher-priced, letter mail products that had also boosted revenues. He said itwas unclear what was behind this, since there was still a large price differential between directmail and individually addressed letter mail.
Another unexpected trend was a shift in volumes from parcel to letter mail items in the fieldof online shopping, with a greater number of shipments under 2kg being sent as letters. Althoughthe company indicated that this may have been the result of changes in the product portfolio, thespokesman said it was not entirely clear why this shift had occurred.
With the first-quarter revenue growth largely driven by exceptional factors, Austrian Postconfirmed its original outlook for its revenue development for the entire year 2012, with revenueexpected to “remain stable or rise slightly” compared with 2011.
It said business development would continue to be impacted by structural changes in thepostal sector. “Electronic substitution will lead to a decline in addressed letter mail volumes,whereas increasing e-commerce should result in growth in the transported parcel volumes. Thedampened economic environment could have a negative effect on the advertising industry and consumerbehaviour.
“One focal point of the group will continue to be on enhancing the profitability of theservices offered. With respect to sustainable earnings development, Austrian Post confirms thetargeted EBITDA margin in the range of 10 per cent to 12 per cent. The company is also striving toachieve a further improvement in earnings before interest and tax (EBIT) compared to 2011.”
CEO Georg Pölzl commented: “The earnings posted in this quarter once again demonstratedAustrian Post’s success in consistently focusing its business operations on the four strategicpriorities it has defined. We confirm our original outlook for 2012 based on these quarterlyresults, with annual revenue expected to remain stable or increase slightly on a comparable basis.At the same time, the company is pursuing the goal of improving EBIT for the year.
“We had a good start in the year 2012 as a result of a consistently pursued corporatestrategy. For this reason, we will continue on our chosen path of further developing the Group. Wecannot compensate for the ongoing trend towards declining addressed letter mail volumes only byincreasing the number of parcel shipments. Improving the efficiency and cost structure is just asimportant for the success of the company as optimising service quality on behalf of our customers.”
