Revenue growth from B2B premium parcels combined with cost-optimisation measures helped togenerate a slight increase in earnings before interest and tax (Ebit) for Austrian Post in the
first half of 2014 as it continued to minimise the decline in its standard letters business.Against a strong comparative period last year, total revenue declined by 0.1% to €1.17 billionin the six months to 30 June. However, second-quarter revenue was up slightly, by 0.6%, due mainlyto positive revenue effects in the group’s mail business.
First-half Ebit increased by 0.4% to €98.8 million, on the basis of what the group described as “ a solid revenue development and strong cost discipline”. The company said it had been successfulin counteracting the downward trend in mail volumes caused by electronic substitution, thanks toproduct innovations and sales initiatives. As a result, the revenue decline in the mail segment waskept relatively low, at 1.8%, to €741.2 million.
Revenue for the Parcel & Logistics Division rose by 3% in the first half of 2014 to €431.5m.The company said most of the division’s market share gains could be attributed to the PremiumParcels business – parcel delivery within 24 hours – which accounted for around 75% of totaldivisional revenue.
Premium Parcels – mainly used by business customers – generated revenue of €323.4m in the firsthalf of the year, a rise of 2.9%. This positive development was a consequence both of revenuegrowth from existing customers and Austrian Post’s success in attracting new customers, the companysaid.
In addition to the strong development of the business parcel field in Austria, strong growth wasalso achieved in higher-value parcels for private customers.
Standard Parcels, which mainly involve shipments to private customers in Austria, posted firsthalf-year revenue of €90.6m, an increase of 1.1%. Other Parcel Services, which includes variousadditional logistics services such as fulfilment, warehousing and cash logistics, generated revenueof €17.6m in the first half of 2014, a rise of €2.5m from the previous year.
From a regional perspective, 57% of total revenue in the Parcel & Logistics Division wasgenerated in Germany in the first half of 2014, 35% in Austria, and 8% by the subsidiaries in SouthEast and Eastern Europe. Revenue in Germany was up by 1.2% in the first half year, although thechallenging competitive environment and the price pressure in this market continued to have aperceptible impact on the business.
At the same time, parcel revenue growth in Austria reached a level of 4.6%, a development thatis supported by the trend towards online shopping, as well as the higher market share in the B2Bbusiness. In total, the subsidiaries in South East and Eastern Europe posted revenue growth of 8.5%in the first half of 2014.
Austrian Post said the earnings development of the individual divisions showed the importance ofthe group’s on-going cost optimisation initiative, which meant that the revenue decline in thegroup’s mail business was almost completely offset by efficiency enhancement measures. Negativeeffects related to the trans-o-flex Group, such as write-downs and structural measures, stillburdened the parcel business in the first quarter of the year, but earnings improved slightly inthe second quarter.
Austrian Post CEO Georg Pölzl commented: “Looking ahead to the entire 2014 financial year, weexpect a stable revenue development. At the same time we are striving to achieve a furtherimprovement in earnings (EBIT).
“In addition to resolute cost optimisation in all processes, focusing our operations to customerneeds is at the heart of our strategic activities. In order to further cement our market leadershipin our core business, we are continually expanding our self-service solutions and online servicessuch as the new Post App. However, we will also exploit opportunities in growth markets and arecurrently testing the future field of food logistics.”
