EQS-News: AUSTRIAN POST: First-quarter revenue and earnings above prior year

EQS-News: Österreichische Post AG / Key word(s): Interim Report
AUSTRIAN POST: First-quarter revenue and earnings above prior year

12.05.2023 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.

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AUSTRIAN POST RESULTS FOR Q1 2023:
First-quarter revenue and earnings above prior year

 

Revenue growth in all divisions

•     Revenue +10.5 % to EUR 664.7m
•     Mail +3.3 % to EUR 308.6m
•     Parcel & Logistics +15.5 % to EUR 327.1m (+4.6 % excluding Parcel
Türkiye)
•     Retail & Bank +41.8 % to EUR 37.5m

Higher year-on-year earnings

•     EBITDA +17.1 % to EUR 95.1m
•     EBIT +18.7 % to EUR 47.0m
•     Earnings per share at the prior-year level of EUR 0.46

Cash flow and balance sheet

• Operating free cash flow of EUR 75.1m
• Total assets including bank99 of EUR 5.4bn
• Stable equity capital of EUR 739.7m

Outlook for 2023

• Targeted Group revenue growth in the mid-single-digit range
• Ongoing aim to achieve earnings (EBIT) close to the prior year level

Macroeconomic conditions from the previous year continued impacting
Austrian Post during the first quarter of 2023. The current inflation is
evident in higher costs of energy and purchased services but also
increasingly rising personnel costs. In order to counteract these
developments, the company needs to implement revenue but also cost-related
measures.

“Against the backdrop of rising costs, the first quarter went well, as
reflected in the higher revenue and earnings,” states Austrian Post CEO
Georg Pölzl. “In particular, our Retail & Bank Division benefits from
higher interest rates and could significantly improve its revenue as well
as earnings,” CEO Pölzl adds. Group revenue increased by 10.5 % to
EUR 664.7m in the first quarter of 2023, showing improvements in all
divisions: revenue equalled EUR 308.6m in the Mail Division (+3.3 %) and
were impacted by the structural decline of addressed letter mail volumes
and the reduced direct mailing business, but also benefits from postal
rate adjustments implemented in the previous year. The Parcel & Logistics
Division accounted for revenues of EUR 327.1m (+15.5 % or +4.6 % excluding
Parcel Türkiye) with a very positive parcel business in all regions.
Revenue of the Retail & Bank Division climbed to EUR 37.5m (+41.8 %),
recent interest rate developments made a positive impact on the division’s
revenue.

Earnings have also improved in the first quarter. EBITDA rose by 17.1 % to
EUR 95.1m, and earnings before interest and taxes (EBIT) was up by 18.7 %
to EUR 47.0m. In this regard, it is important to highlight the earnings
increase in the Retail & Bank Division of EUR 11.6m year-on-year, which
now made a slightly positive contribution of EUR 0.9m to Group earnings.
Accordingly, the slight EBIT decrease in the Mail Division (–0.3 % to
EUR 41.0m) and Parcel & Logistics Division (–4.4 % to EUR 16.7m) could be
more than offset. Austrian Posts’ net profit for the period amounted to
EUR 32.0m compared to EUR 30.5m (+4.9 %) in the previous year, implying
earnings per share of EUR 0.46 in the first quarter of 2023.

Further cost pressure is expected for the entire 2023 and, from mid-2023,
higher staff costs due to salary and wage adjustments in Austria as
stipulated in collective labour agreement. On top of that, economic
developments and the purchasing behaviour of consumers are becoming harder
to predict. Nevertheless, Austrian Post is aiming to maintain or increase
revenue in all divisions and targets Group revenue growth in the
mid-single-digit range. In the Mail Division, a slight drop in revenue is
forecasted. The structural trend of a volume decline in conventional
letter mail will continue, but an adapted and up-to-date offering
providing value for money should ensure availability and delivery quality
at a high level and will cover cost increases. Revenue growth in the upper
single-digit range is expected in the Parcel & Logistics Division.
However, the increase will heavily depend on the exchange rate development
of the Turkish Lira as well as consumer behaviour in an inflationary
environment. Revenue of the Retail & Bank Division in 2023 will be
supported by the improved interest rate environment and is expected to
show a significant increase.

With respect to its earnings development, Austrian Post will continue to
target EBIT in 2023 at about the same level as last year. Following a good
start in the first quarter, higher costs are expected from the third
quarter of 2023.

The planned investment programme is a top priority in 2023 alongside
revenue generation and cost discipline. This primarily refers to
finalising capacity expansion of parcel logistics in Austria and expanding
the sustainable vehicle fleet towards enhanced e-mobility. As a result,
investments in the range of EUR 160m to EUR 180m to ensure sustainability
and secure growth are expected.

   

KEY FIGURES

      Change
EUR m Q1 2022 Q1 2023 % EUR m
         
Revenue 601.4 664.7 10.5 % 63.3
Mail 298.9 308.6 3.3 % 9.7
Parcel & Logistics 283.1 327.1 15.5 % 44.0
Retail & Bank 26.4 37.5 41.8 % 11.1
Corporate/Consolidation –7.0 –8.5 –21.1 % –1.5
Other operating income 28.4 18.6 –34.5 % –9.8
Raw materials, consumables and services used –175.6 –197.6 –12.5 % –22.0
Expenses for financial services –3.2 –1.9 40.0 % 1.3
Staff costs –288.0 –299.8 –4.1 % –11.8
Other operating expenses –81.9 –91.3 –11.5 % –9.4
Results from financial assets accounted for
using the equity method 0.2 0.1 –62.8 % –0.1
Net monetary gain 0.0 2.4 >100 % 2.4
EBITDA 81.2 95.1 17.1 % 13.9
Depreciation, amortisation and impairment
losses –41.6 –48.1 –15.6 % –6.5
EBIT 39.6 47.0 18.7 % 7.4
Mail 41.1 41.0 –0.3 % –0.1
Parcel & Logistics 17.4 16.7 –4.4 % –0.8
Retail & Bank –10.7 0.9 >100 % 11.6
Corporate/Consolidation^1 –8.2 –11.5 –40.3 % –3.3
Financial result 1.1 –3.4 <-100 % –4.5
Profit before tax 40.7 43.6 7.2 % 2.9
Income tax –10.2 –11.6 –14.0 % –1.4
Profit for the period 30.5 32.0 4.9 % 1.5
Earnings per share (EUR)^2 0.46 0.46 0.4 % 0.00
         
Gross cash flow 77.9 79.8 2.4 % 1.9
Cash flow from operating activities –20.6 –50.9 <–100 % –30.3
CAPEX 23.6 24.1 2.2 % 0.5
Free cash flow –38.4 –106.8 <–100 % –68.4
Operating free cash flow^3 72.1 75.1 4.1 % 3.0

^1 Includes the intra-Group cost allocation procedure
^2 Undiluted earnings per share in relation to 67,552,638 shares
^3 Free cash flow before acquisitions/securities/money market investments,
growth CAPEX and core banking assets

     

Vienna, 12 May 2023

 

EXCERPTS FROM THE MANAGEMENT REPORT Q1 2023

REVENUE DEVELOPMENT IN DETAIL

In the first quarter of 2023, Austrian Post’s Group revenue increased by
10.5 % year-on-year to EUR 664.7m. Revenue improved in all operating
divisions in the first three months. The Mail Division reported a revenue
increase of 3.3 %, whereas revenue of the Parcel & Logistics Division went
up by 15.5 % and the Retail & Bank Division produced a revenue increase of
41.8 %.

The share of the Mail Division as a proportion of the total revenue
generated by Austrian Post in the first quarter of 2023 amounted to
45.8 %. The division’s revenue of EUR 308.6m is negatively impacted by the
structural decline of addressed letter mail volumes as a result of
electronic substitution, however, also benefits from postal rate
adjustments implemented in the previous year. In addition, the direct
mailing business is in decline, in general, and currently faces
considerable cost pressure.
The Parcel & Logistics Division accounted for 48.6 % of Group revenue or
EUR 327.1m in the reporting period. The parcel business developed very
positively in all regions. Only the Logistics Solutions business area
faced a revenue decline due to the lack of special pandemic-related
logistics services in previous years.
The Retail & Bank Division accounted for 5.6 % of Group revenue or
EUR 37.5m in the first three months of 2023. Recent interest rate
developments made a positive impact on the division’s revenue.

Revenue of the Mail Division totalled EUR 308.6m in the first quarter of
2023, 64.2 % of which can be attributed to the Letter Mail & Business
Solutions area. Direct Mail accounted for 25.7 % of the total divisional
revenue, and Media Post had a 10.1 % share.
In the first quarter of 2023, Letter Mail & Business Solutions revenue
amounted to EUR 198.2m, implying a year-on-year increase of 5.6 %. Letter
mail volumes continue to show a downward trend resulting from the
substitution of letters by electronic forms of communication. Conventional
letter mail volumes in Austria fell by a further 4 % in the first quarter
of 2023. Postal rate adjustments implemented in the previous year had a
positive effect on revenue. Inflationary pressures on all types of costs
led to adjustments in the product and pricing structure as well as
necessary efficiency increases in internal processes. International letter
mail showed a stable revenue development against the backdrop of a volume
decline, whereas the Business Solutions area developed positively.
Direct Mail revenue fell by 2.8 % in the first quarter of 2023 to
EUR 79.2m. The current restrained advertising behaviour could be partially
offset by adjustments to the price structure. Pressure in the advertising
market can also be attributed to higher prices of energy and paper.
Revenue from Media Post, i.e., the delivery of newspapers and magazines,
rose by 4.9 % year-on-year to EUR 31.2m. This increase is mainly related
to adjustments in the product and pricing structure.

Revenue of the Parcel & Logistics Division increased by 15.5 % in the
first quarter of 2023 to EUR 327.1m. The parcel business developed very
favourably in all regions.
Parcel Austria generated a revenue growth of 8.3 % reaching EUR 185.0m.
Parcel volumes showed an upward trend of 5 % following the normalisation
of volumes in the previous year.
Revenue in Türkiye (Parcel Türkiye) rose by 65.9 % to EUR 83.6m compared
to the first three months of 2022. This high level of growth is due to
increasing volumes (+8 %) as well as inflation in Türkiye.
The parcel business in Southeast and Eastern Europe (Parcel CEE/SEE)
continues to generate positive growth rates, with revenue up by 2.3 % to
EUR 43.4m in the first three months of 2023.
Revenue of the Logistics Solutions area (incl. Consolidation) fell by
22.4 % in the reporting period to EUR 15.1m. This decline is related to
the lack of special pandemic-related logistics services provided in
previous years.

Revenue of the Retail & Bank Division improved by 41.8 % in the first
quarter of 2023, increasing to EUR 37.5m from EUR 26.4m in the prior-year
period. Income from Financial Services climbed from EUR 17.4m to EUR 27.6m
in the current reporting period. This is mainly attributable to the
improved interest rate environment in Europe. Branch Services revenue
increased by 9.7 % to EUR 9.9m in the first quarter of 2023.

 

EARNINGS DEVELOPMENT

The largest expense items in relation to Austrian Post’s Group revenue are
staff costs (45.1 %), raw materials, consumables and services used
(29.7 %) and other operating expenses (13.7 %). 7.2 % can be attributed to
depreciation, amortisation and impairment losses and 0.3 % to expenses for
financial services.

Staff costs in the first quarter of 2023 totalled EUR 299.8m, implying a
year-on-year increase of 4.1 % or EUR 11.8m. The change results from
salary adjustments in operational staff costs under collective labour
agreements. The Austrian Post Group employed an average of 27,095 people
(full-time equivalents) in the first three months of 2023 compared to the
average of 27,239 employees in the prior-year period (–0.5 %).
Non-operating staff costs refer to severance payments and changes in
provisions, which are primarily related to the specific employment
situation of civil servant employees at Austrian Post. No significant
additional expenses were incurred in the first quarter of 2023.

Raw materials, consumables and services used rose by 12.5 % to EUR 197.6m.
Fuel and energy costs as well as transport costs for external freight
companies had an increasing effect.

Other operating income decreased by 34.5 % in the first quarter of 2023 to
EUR 18.6m. This development can be attributed to the lack of COVID-19
related reimbursements paid in the previous year. Other operating expenses
increased by 11.5 % to EUR 91.3m, particularly for IT services and
maintenance costs.

EBITDA equalled EUR 95.1m in the first quarter of 2023, implying an
increase of 17.1 % from the prior-year figure of EUR 81.2m. This implies
an EBITDA margin of 14.3 %. Depreciation, amortisation and impairment
losses amounted to EUR 48.1m in the first three months of 2023, comprising
a year-on-year rise of 15.6 % or EUR 6.5m. The increase is mainly due to
investments in new parcel logistics infrastructure locations. For the
Turkish subsidiary, the accouting standard IAS 29 (Financial Reporting in
Hyperinflationary Economies) has to be applied. Accordingly, all items in
the income statement as well as the non-monetary items were adjusted using
a general price index (refer to the Annual Report 2022, Consolidated
Financial Statements, Note 3.3). The profit or loss from net monetary
items is presented as a separate item in the income statement. In the
first quarter of 2023, the net monetary gain amounted to EUR 2.4m. Group
EBIT totalled EUR 47.0m in the first quarter of 2023, up from EUR 39.6m in
the previous year. The EBIT margin equalled 7.1 %.

The Group’s financial result amounted to minus EUR 3.4m, down from the
prior-year figure of EUR 1.1m. As a consequence, after deducting the
income tax of EUR 11.6m, the profit for the period for the first three
months of 2023 equalled EUR 32.0m compared to EUR 30.5m in the first
quarter of 2022. This implies unchanged undiluted earnings per share of
EUR 0.46.

 

EARNINGS BY DIVISON

From a divisional perspective, the Mail Division achieved an EBIT of
EUR 41.0m in the first quarter of 2023 compared to EUR 41.1m in the
prior-year quarter (–0.3 %). This stability in the current reporting
period resulted from the combination of volume declines, postal rate
effects alongside a focus on efficient work processes.

The Parcel & Logistics Division generated an EBIT of EUR 16.7m in the
first quarter of 2023, down by 4.4 % from EUR 17.4m in the prior-year
period. The parcel business in Austria and Türkiye developed favourably,
whereas earnings declined at several Southeast and Eastern European
subsidiaries. The lack of special pandemic-related logistics services also
negatively impacted the division’s earnings.

The Retail & Bank Division recorded an EBIT of EUR 0.9m in the first
quarter of 2023, compared to minus EUR 10.7m in the previous year.
Accordingly, the earnings improvement equalled EUR 11.6m. The positive
development in the financial services business based on higher net
interest income made a significant contribution to earnings.

The EBIT of the Corporate Division (incl. Consolidation and the
intra-Group cost apportionment procedure) changed from minus EUR 8.2m to
minus EUR 11.5m. The Corporate Division provides non-operating services
which are typically essential for the purpose of the administration and
financial control of the company. In addition to conventional corporate
governance tasks, these services include the management and development of
commercial properties not required for operations, the management of
significant financial investments, the provision of IT services, the
development of new business models and the administration of the Internal
Labour Market of Austrian Post.

 

CASH FLOW AND BALANCE SHEET

The gross cash flow in the first quarter of 2023 equalled EUR 79.8m,
compared to EUR 77.9m in the first quarter of 2022 (+2.4 %). The cash flow
from operating activities amounted to minus EUR 50.9m in the reporting
period, compared to the prior-year figure of minus EUR 20.6m. In this
regard, the biggest effect is attributable to changes in the core banking
assets of bank99 totalling minus EUR 138.4m compared to minus EUR 104.2m
in the previous year. The cash flow from operating activities excluding
core banking assets totalled EUR 87.5m in the first quarter of 2023. The
cash flow from investing activities was minus EUR 56.0m in the first three
months of 2023, compared to minus EUR 17.8m in the prior-year period.
Austrian Post relies on operating free cash flow as a key metric to assess
the financial strength of its operating business and to cover the dividend
for the financial year. Excluding the change in core banking assets, the
operating free cash flow totalled EUR 75.1m in the current reporting
period compared to EUR 72.1m in the first quarter of 2022. The cash flow
from financing activities came to minus EUR 30.1m in the first three
months of 2023, compared to minus EUR 85.2m in the previous year.

Austrian Post relies on a solid balance sheet and financing structure.
Total assets amounted to EUR 5,376.0m as at 31 March 2023. On the asset
side, property, plant and equipment at EUR 1,339.0m constitute one of the
largest balance sheet items and included right-of-use assets in connection
with leases of EUR 417.8m. In addition, there were intangible assets and
goodwill from company acquisitions, which were reported at EUR 160.8m as
at 31 March 2023. The balance sheet showed receivables totalling
EUR 403.0m, other financial assets amounted to EUR 91.7m as at 31 March
2023. Financial assets from financial services totalled EUR 3,057.2m at
the end of the first quarter of 2023 and result primarily from the
business activities of bank99.
On the equity and liabilities side of the balance sheet, equity of
Austrian Post Group amounted to EUR 739.7m as at 31 March 2023 (implying
an equity ratio of 13.8 %). The pro forma equity ratio (bank99 accounted
for using the equity method) equalled 30 % at the end of March 2023.
Provisions of EUR 631.6m are shown on the equity and liabilities side at
the end of March 2023, trade and other payables totalling EUR 519.2m.
Financial liabilities from financial services of EUR 2,901.1m result from
business activities of bank99 (deposit and investment business of bank99
customers).

 

OUTLOOK FOR 2023

The economic environment in Europe will continue to be impacted by the
macroeconomic developments that prevailed last year, first and foremost by
entrenched inflation driven by the intensifying wage-price spiral. This
development also relates to energy costs which are currently at a higher
level than before the war in Ukraine. The upward pressure on staff costs
will lead to significantly higher wages and salaries in Austria as of July
2023 as stipulated by collective agreements. For this reason, it is
necessary to take the unavoidable cost increases into account when
developing products and setting prices.

Revenue growth in 2023
Similar to other companies, Austrian Post will have to address these
challenging overall conditions both in terms of revenue and costs.
Inflationary pressure on staff costs will lead to price adjustments in all
areas and will require efficiency improvements in internal processes. The
company is striving to maintain or increase its revenue in all areas.
Based on the Group revenue 2022 of EUR 2.5bn, the company is aiming for
growth in the mid-single-digit range.
In the Mail Division, a modest revenue decrease is forecasted for 2023.
The structural trend of declining volumes of conventional letters will
continue in the order of about 5 % p.a. Direct mail and media post volumes
are also under pressure. Increased gas and paper prices have a negative
impact on the cost structures of many customers. Austrian Post is
responding to rises in external energy and transport costs as well as
internal staff costs by implementing efficiency and portfolio
improvements. The underlying objective is to introduce an adapted letter
mail product portfolio and pricing structure before the end of 2023. An
up-to-date offering that provides value for money should ensure
availability and delivery quality at a high level but also cover cost
increases.
The Parcel & Logistics Division expected to resume growth after declining
slightly in 2022. Assuming a stable economic environment in the countries
in which Austrian Post operates, revenue growth in the upper single-digit
range is expected. However, growth will heavily depend on the exchange
rate development of the Turkish Lira. In addition, unpredictable consumer
behaviour due to the inflationary environment leads to uncertainty in
planning.
Revenue in the Retail & Bank Division is also expected to increase
significantly in 2023. The improved interest rate environment is
favourable to the business model of conventional retail banks. The
objective of bank99 is to further expand its financial services business
in 2023 and accelerate IT-integration. This should serve as the basis for
reaching the break-even point at bank99 in 2024.

Group earnings in 2023
On balance, the current overall conditions remain challenging for Group
earnings in 2023. Inflation will lead to a steady increase in costs, which
applies particularly to staff costs in the second half of 2023.
Accordingly, sequential quarterly developments will proceed differently
than in the previous year. Following a good start in the first quarter of
2023, higher costs are anticipated as of the third quarter. Austrian Post
still aims to generate earnings (EBIT) in 2023 at about the same level as
last year.

Investment programme in 2023
Austrian Post will continue to offer a combination of growth and strong
dividends. The investment programme mainly consists of finalising the
capacity expansion for the parcel logistics in Austria to achieve a
sorting capacity of almost 140,000 parcels per hour. Furthermore, the
expansion of the sustainable vehicle fleet towards greater e-mobility is
set to continue. Investment activities in 2023 will be based on
maintenance CAPEX in Austria, Southeast and Eastern Europe as well as in
Türkiye on a scale of EUR 100m. In addition, growth CAPEX of EUR 60m to
EUR 80m is planned in Austria.

 

CONTACTS    
Austrian Post Austrian Post
Ingeborg Gratzer Harald Hagenauer
Head of Media Relations & Internal Head of Investor Relations, Group
Communications Auditing & Compliance
Tel.: +43 (0) 57767-32010 Tel.: +43 (0) 57767-30400
presse@post.at investor@post.at

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12.05.2023 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com

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Language: English
Company: Österreichische Post AG
Rochusplatz 1
1030 Vienna
Austria
Phone: +43 577 67 – 30400
E-mail: investor@post.at
Internet: www.post.at
ISIN: AT0000APOST4
WKN: A0JML5
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1628123

 
End of News EQS News Service

1628123  12.05.2023 CET/CEST