Austrian Post has announced strong growth of over 30% in operatingprofits and revenues for 2007. It has also appointed an experienced international manager as itsnew head of parcels and logistics.
The postal and logistics group increased revenues last year by 33.3% toEUR 2,315.7 million. Growth was largely driven by acquisitions, including consolidation of Germanparcels company trans-o-flex which contributed about EUR 500 million. Austrian Post acquired tencompanies last year for a total of EUR 72 million and now generates 27% of revenues frominternational business. A sum of EUR 150 million has been set aside for further parcel andlogistics acquisitions over the coming 18 months.
In 2007, earnings before interest, tax, depreciation and amortisation(EBITDA) improved by 26.2% to EUR 292.7 million, resulting in an EBITDA margin of 12.6%. Earningsbefore interest and tax (EBIT) increased by 32% to EUR 162.8 million, amounting to a 7% margin. Thenet profit was up by 22.9% to EUR 122.6 million.
The Parcels and Logistics division increased revenues by 225% to EUR739 million thanks to consolidation of trans-o-flex and various acquisitions in Central and EasternEurope, and employee numbers increased 50% as a result. But the unit’s EBIT dropped by 38.5% to EUR12.8 million due to higher depreciation, amortisation and impairment losses. The EBIT margin wasjust 1.7%.
Austrian Post said that in response to the loss of domestic parcelcustomers to new entrant Hermes Logistik it has started to restructure its parcel business toimprove profitability. As well as financial measures and job losses, it has introduced a 24-hourpremium service for B2B and B2C parcels to win business. In Central and Eastern Europe it ispositioning itself as a “local integrator” with strong domestic platforms, while it is positioningitself as a niche player with a focus on healthcare and pharmaceuticals in Western Europe.
The new head of Parcels and Logistics will be Carl-Gerold Mende,previously head of international business for Royal Mail and during the 1990s responsible forbuilding up General Parcel (now GLS) into one of Europe’s leading parcel networks. German-bornMende, who will take up his post in June, will also join the Austrian Post board under a three-yearcontract.
Peter Michaelis, President of the Supervisory Board of Austrian Post,said: “I am convinced that Austrian Post with Carl-Gerold Mende on the management board isoptimally equipped to successfully hold its own in the future in the light of a dynamic competitiveenvironment in Europe’s postal and parcel delivery market”. Austrian Post chairman Anton Waisadded: “Carl-Gerold Mende will make a substantial enormous contribution to the management team ofAustrian Post and above all, the management board, in furthering the company’s futureinternationalisation.”
In 2007, Austrian Post’s core mail business increased EBIT by 1% to EUR274.3 million on revenue up 5.3% at EUR 1,381 million. There was 0.5% organic growth, with theremainder driven by new mail businesses such as Scanpoint.
In its 2008 outlook, Austrian Post said it expects group revenue togrow by 3%, based on integration of new subsidiaries, stable mail volumes and higher internationalparcels volumes compensating for the domestic decline.
Despite the adverse effects on Austrian Post’s parcels business, thecompany anticipates that earnings before interest and tax (EBIT) in 2008 will drop only slightly tobelow 7%, and then reach the targeted range of between 7% and 8% in the following years. An EBITmargin of 2% – 3% is expected for the Parcel & Logistics Division in the year 2008, which isanticipated to increase to the targeted level of 5% in subsequent years.
