Austrian Post is aiming for higher profits and further parcel growth this year to compensate forthe declining mail business after presenting improved figures for 2014.
The listed postal group wants to increase revenues by about 1-2%, generate higher operatingprofits and achieve a sustainable EBITDA margin of about 12%.
In 2014, revenues increased only fractionally to €2.37 billion but EBIT was up by 5.9% to €197million, mostly due to €62 million proceeds from selling its former head office in Vienna. Thispushed the EBIT margin up to 8.3% while the EBITDA margin improved to 14.1%, although this washeavily influenced by positive effects.
Austrian Post’s Mail & Branch Network Division registered a 1.5% revenue decline during theyear to €1,488 million. The decrease in the mail business was due to the ongoing trend towardselectronic substitution of letters and declining direct mail volumes. At the same time, revenuefrom branch network services also fell in 2014. Overall, the division’s operating profits (EBIT)dropped 4.2% to €270 million.
The Parcel & Logistics Division remained a top-line growth driver with a revenue increase of3.1% to €882 million in 2014. But EBIT slumped to minus €19.5m, compared to minus €4.9m in theprevious year. A major factor was the ongoing efficiency enhancement programme at the trans-o-flexGroup, which includes the reintegration of outsourced services by taking over selected distributionpartners. The objective is to optimize operating costs and exploit synergies in the field ofdistribution logistics. Write-downs and structural measures relating to the integration of thedistribution companies totalled €9.8m in 2014. Furthermore, an impairment loss on goodwill of thetrans-o-flex Group of €38.9m was recognised during the period under review, compared to animpairment loss of €27m in 2013.
From a regional perspective, German subsidiary trans-o-flex, which accounts for 55.4% ofdivisional revenues, had a slight 0.1% revenue drop in a highly competitive market last year whileits volumes increased to 53 million parcels from 52 million in 2013.
In contrast, revenue growth in Austria reached a level of 6.5% in 2014, representing 35.6% ofdivisional revenues, supported by the trend towards online shopping as well as market shareincreases in the business parcel segment. The company’s parcel volumes in Austria grew by 5.6% to74 million parcels last year, and the B2B market share grew to 28%.
In total, the subsidiaries in South East and Eastern Europe posted a substantial revenueincrease of 10.7%, and parcel volumes increased to 16 million from 14 million in 2013. In Turkey,Aras Cargo, in which Austrian Post owns 25%, increased volumes to 106 million parcels from 95million in 2013, according to the investor presentation.
In 2014, Austrian Post also decisively continued its ongoing modernisation process. The companyinvested a total of €82.6m (CAPEX) in new customer solutions and in improving and expanding itsinfrastructure.
“In this way, Austrian Post is fulfilling its objective of designing more efficient processesand further increasing customer benefits. Important impetus was provided in 2014, especially in thefields of customer orientation and innovation. By expanding self-service solutions such as 260modern self-service zones and 126 pick-up stations as well as new online solutions such as the PostApp, Austrian Post is able to satisfy current customer needs, which is reflected by rising customersatisfaction ratings,” said CEO Georg Pölzl.
Looking ahead, Austrian Post said it expects similar market trends in 2015. In line withinternational trends, the decrease in addressed mail volume is likely to amount to 3–5% peryear.
The development of the parcel and logistics business is also dominated by two trends. Growth of3-6% continues to be expected in the private customer parcel segment, depending on the region. Thesteadily growing field of electronic commerce is the driving force behind this increase. Thepositive development of the business parcel segment depends on a stable economy and the competitivesituation. However, the subdued economic situation is unlikely to provide any impetus to parcelgrowth. In particular, the priority in the international parcel business is to exploit the company’s good market position and take advantage of the resulting opportunities.
