Mittwoch, 23. Mai | 22:01 Uhr

DJ EANS-Adhoc: Österreichische Post AG / Difficult market environment in 2009 due to economic recession: revenue decline of 2.4% and EBIT down 4.3% in the first quarter of 2009

=-------------------------------------------------------------------------------
  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is solely responsible for the content of this
  announcement.
=------------------------------------------------------------------------------- 

19.05.2009 

Austrian Post - Difficult market environment in 2009 due to economic recession:
revenue decline of 2.4% and EBIT down 4.3% in the first quarter of 2009 

- Difficult market environment in the recessionary year 2009;
Deteriorating economic climate negatively impacts letter mail and parcel
volumes
- Q1 2009 featured two fewer working days than Q1 2008
- Group revenue down 2.4%, or EUR 14.7m
   - Mail (-4.6%): Decline in daily business mail and direct mail items
   - Parcel & Logistics (-0.1%): On balance stable development based on
     core business in Austria and Germany and consolidation effects
   - Branch Network (+5.6%): Positive development in sales of retail
     products and financial services
- Measures initiated to improve efficiency and reduce costs; positive effects
expected in upcoming quarters
- Earnings before interest and tax decrease 4.3%, to EUR 47.8m
- Balance sheet and cash flow
   - Free cash flow before financial investments in securities at EUR 22.9m
   - Cash and cash equivalents and financial investments in securities
      rise by EUR 15.4m in the first quarter, to EUR 356.0m 

Austrian Post at a glance
Against the backdrop of the international economic crisis, the year 2009
also poses a major challenge to Austrian Post. As the first quarter of 2009
demonstrated, the recession resulted in a serious downturn in the business
development of many companies. In turn, this negatively impacted the
business of Austrian Post, leading to reduced letter mail, direct mail and
parcel delivery volumes. Accordingly, total revenue of Austrian Post fell
by 2.4% or EUR 14.7m from the same period of the previous year, to EUR
595.2m. The two fewer working days compared to Q1 2008 also contributed to
the decline.
Earnings before interest and tax (EBIT) were down 4.3%, to EUR 47.8m.
Revenue losses could not be fully compensated by cost reduction measures.
In particular, the 2009 salary increases of 3.7% pushed up staff costs, the
largest single operating expense item. 

The first months of 2009 clearly showed that a more difficult economic
environment is to be expected for the year as a whole than originally
anticipated at the beginning of the year. Economic forecasts for the
markets in which Austrian Post operates were recently once again revised
downwards. Back in December 2008, the Austrian Institute of Economic
Studies (WIFO) and Institute for Advanced Studies (IHS) predicted negative
growth rates in Austria of -0.5% and -0.1%  respectively. In April 2009,
the EU Commission already forecast that the Austrian economy would contract
by -4.0% in 2009. Post will not be immune against the consequences of this
immense economic downswing. The company expects that the deteriorating
economic situation will continue to have a negative effect on letter mail,
parcel delivery and direct mail volumes. 

For this reason, the main goal of Austrian Post's management team is to do
its best to counteract impending revenue decline by implementing
operational cost savings. This approach involves efficiency-enhancing
measures along with a sales offensive. Austrian Post is more intensively
promoting the increased use of direct mailings in the communications mix of
companies as well as new services such as mailroom services and document
printing. 

Efficiency improvements and rationalisation measures are essential in order
to compensate for a decline in revenue by means of cost reductions. In an
initial step, the Management Board of Austrian Post has launched a
programme to cut the cost of materials and operating expenses (excluding
staff costs) in the Group by about EUR 30m over the next 12 months. In
addition, planned capital expenditure (CAPEX) will be cut back by 20% in
2009, to about EUR 80m. 

Efficiency improvements are also planned for operational processes. Austrian
Post aims to have a cost structure in its letter mail delivery services which
is appropriate for a competitive environment. In the second half of 2009,
Austrian Post will start replacing 300 unprofitable company-owned branches with
partner-operated postal service points. "It is enormously important to
implement efficiency-enhancing measures in a timely manner as long as we are
doing economically well, in order to achieve the targeted savings effects",
says Rudolf Jettmar, Chairman of the Management Board and Chief Executive
Officer of Austrian Post. 

Business development - earnings in detail
The recession arising as a consequence of the international financial crisis
has clearly left its mark on the real economy, seriously dampening the economic
performance of companies. This development has led to an overall decline in
business mail volumes. The business development of Austrian Post in the first
quarter of 2009 was not only negatively affected by the recession, but also by
the two fewer working days compared to Q1 2008. Accordingly, total revenue fell
by 2.4% in the first quarter of the 2009 financial year, or EUR 14.7m, to EUR
595.2m. 

First quarter revenue of the Mail Division decreased by 4.6%, led by declining
business in the Letter Mail and Infomail (addressed and unaddressed direct mail
items) business areas. The economic downturn and the resulting reduction in
daily business mail volumes and delays in advertising expenditures had a
perceptibly negative impact on revenue. 

In the Parcel & Logistics Division, revenue remained largely constant. A volume
decline in the premium parcel segment was opposed by consolidation effects and
a stable development in standard parcels. The redimensioning measures in parcel
logistics operations carried out in Austria succeeded in increasing efficiency
following the loss of two major mail order customers in the previous year.
Furthermore, the existing customer relationship with the competing parcel
provider Hermes calls for delivery of B2C parcels by Austrian Post as of June
1, 2009, and will contribute to a further productivity improvement.
The 5.6% growth in revenue generated by the Branch Network Division can be
attributed to the good development in sales of retail products (mobile
telephony, fixed line network) and financial services. 

Revenue
EUR m                     Q1          Q1      Change      Structure
                        2008        2009           %        Q1 2009
Revenue                609.9       595.2       -2.4%         100.0%
EBITDA                  75.4        72.2       -4.2%          12.1%
EBIT                    49.9        47.8       -4.3%           8.0%
EBT                     52.0        48.4       -6.8%           8.1%
Profit for the
period                  41.9        33.7      -19.5%           5.7%
Earnings per share*)    0.60        0.50      -16.6%              - 

In the light of the prevailing economic situation, the management of Austrian
Post is increasingly focusing its efforts on a sales offensive as well as
efficiency improvements and reducing all operating expenses. An attempt is
being made to counteract declining revenue by cost-cutting measures. The wage
agreements concluded at the end of 2008, which called for salary increases of
about 3.7% in Austria due to the high inflation rate in 2008, pushed up staff
costs. This rise will be continually counteracted by a hiring freeze as well as
exploiting employee fluctuation during 2009.
All operating divisions suffered from recession-related reductions in earnings.
The Mail Division generated an EBIT of EUR 63.1m (- EUR 11.0m from Q1 2008),
whereas EBIT at the Parcel & Logistics was EUR 0.7m (- EUR 4.0m), and the
Branch Network Division posted an EBIT of EUR 0.2m (- EUR 2.4m).  In contrast,
an earnings improvement was achieved in the Other/Consolidation segment, which
encompasses non-allocated costs for central departments, expenses in connection
with unused properties and for the employee social plan as well as the change
in the provision for employee under-utilisation, income from rents and leases
and gains on the disposal of property, plant and equipment.  The EBIT loss of
the Other/Consolidation segment was reduced to minus EUR 16.2m, due to a lower
change in the provision for employee under-utilisation. 

The financial result declined to EUR 0.7m in the first quarter of 2009, which
is related, amongst other reasons, to lower interest rates. 

Earnings before tax fell by 6.8%, to EUR 18.4m. After deducting income taxes
totalling EUR 14.7m, Group net profit for the period (earnings after tax)
amounted to EUR 33.7m, corresponding to EUR 0.50 per share. 

Solid Balance Sheet Structure
Austrian Post pursues a risk-adverse business approach. This is demonstrated by
the high equity ratio of 40.8%, the relatively low level of financial
liabilities and the high amount of cash and cash equivalents. The analysis of
the balance sheet of Austrian Post shows a considerable level of current and
non-current financial resources on the assets side. Austrian Post had cash and
cash equivalents of EUR 241.1m as at March 31, 2009, and financial investments
of securities amounting to EUR 104.7m.  Accordingly, total liquid financial
resources at the disposal of Austrian Post rose from EUR 340.4m to EUR 356.0m
in the first quarter of 2009, as opposed to financial liabilities of only EUR
143.8m. 

Cash Flow
Total operating cash flow before changes in working capital amounted to EUR
57.3m, which includes recession-related effects as well as the lower number of

(MORE TO FOLLOW) Dow Jones Newswires

May 19, 2009 01:36 ET (05:36 GMT)