E-commerce growth, targeted acquisitions and cost savings combined to improve Austrian Post’soperating profits by 13.5% in the first half of 2012, with stable results expected for the full
year despite the uncertain economic outlook.The Austrian postal group increased revenue by 3.1% to €1.2 billion in the first six months ofthe year while earnings before interest and tax (EBIT) improved by 13.5% to €92.2 million. Netprofit was €70.8 million. Both the Mail & Branch Network and the Parcel & Logisticsdivisions improved their results in the first half-year.
The Mail & Branch Network Division, which incorporates the letters business and the postoffice network, increased revenues by 2.1% to €742 million. Its operating profits improved by 10%to €135 m, with lower losses in the post office network, and the profit margin improved further toa high 17.4%.
The trend towards declining letter mail volumes caused by electronic substitution along with theprevailing economic uncertainty and related negative effects on the advertising industry had adampening effect on overall volume development. In addition, there was a perceptible volume shiftfrom direct mail items to higher quality letter mail products, and shipments in the field of onlineshopping are increasingly being sent as letter mail items instead of parcels. As a result, theoverall letter mail revenues rose by 7% to €390 million.
The Parcel & Logistics Division benefitted from the sale of the loss-making Dutch andBelgium subsidiaries to Post NL, growth in Austria and Central and Eastern Europe. Operatingprofits improved 10.5% to €11.4 million, which was a slightly higher 2.6% profit margin.
Revenue rose by 4.9% to €431 million. From a regional perspective, the Austrian parcel marketgenerated the highest growth with 11.4%, driven by online shopping, more B2B parcels andacquisition of the Systemlogistik logistics company. German revenues rose 3.2%, while double-digitvolume growth but lower prices resulted in 1.9% revenue growth in South-East and Eastern Europe.Dutch and Belgian revenues were still partly included in the half-year figures.
In terms of business segments, the premium parcel business (parcel delivery within 24 hours),mostly B2B parcels, increased revenues by 2.6% to €329.5 million. The German subsidiarytrans-o-flex, which posted a satisfactory growth rate, accounted for about 60% of this revenue.Parcel volumes of business customers in Austria increased at a disproportionately high rate,whereas intensified price pressure was evident in South East and Eastern Europe. The standardparcels product segment (B2C) increased revenue by 8.8% to EUR 86.5 million.
Austrian Post said the economic environment of the postal market continues to be characterisedby a structural transformation. The trend towards the electronic substitution of letters andincreased parcel volumes related to online shopping is continuing. At the same time, the impact ofthe challenging economic situation has become apparent. “With respect to Austrian Post’s currentand future business development, it is important that the company continues to advance further onthe basis of its four strategic cornerstones”, said CEO Georg Pölzl.
In this regard Austrian Post’s market leadership in its core business was further expanded bystrengthening its foothold in the Austrian parcel market. At the same time, further progress wasmade toward greater efficiency with a new performance-oriented remuneration model for deliverystaff.
The earnings potential of the strategic investments held by the Group was improved thanks to thedisposal of its subsidiaries in the Benelux region and targeted acquisitions. Whereas the growthpath in the mail area in South East and Eastern Europe was continued by strategic investments inPoland and Bulgaria, the purchase of a company in Austria expanded Austrian Post’s serviceportfolio in the parcel segment. Consistent customer orientation is a top priority in the furtherdevelopment of the Group. Accordingly, online and self-service solutions were also stronglypromoted.
Looking ahead for the full year, Austrian Post said it continues to expect revenue to remainstable or rise slightly on a comparable basis in the entire year 2012. Development of the mail andparcels business is impacted by the dampened economic environment as well as structural changes inthe postal and logistics sector. Electronic substitution will lead to a decline in addressed lettermail volumes, whereas increasing e-commerce should result in parcel volume growth. The ongoingeconomic uncertainty could continue to have a negative effect on the advertising industry andprivate consumption patterns.
One focal point of the Group will continue to be on enhancing the profitability of the servicesoffered. With respect to sustainable earnings development, Austrian Post confirms the targetedEBITDA margin in the range of 10% to 12%. The company is also striving to achieve an improvement inearnings before interest and tax (EBIT) compared to 2011.
