Österreichische Post AG

EANS-News: AUSTRIAN POST IN 2015: REVENUE INCREASE OF 1.6% - OPERATING EBIT UP 2.6% - SALE OF TRANS-O-FLEX LED TO IMPAIRMENT LOSSES - STABLE OUTLOOK FOR 2016


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annual result

Market environment
- Mail: Basic trend of e-substitution continued in 2015; differentiated
development of direct mail items
- Parcel: Growth of e-commerce; increasing competition and price pressure

Revenue
- Revenue increase of 1.6% to EUR 2,401.9m
- Growth in the mail (+0.9%) and parcel (+2.9%) segments

Earnings
- Operating EBIT of EUR 198.0m (+2.6%)
- Impairment losses relating to sale of the German trans-o-flex Group
- Reported EBIT of EUR 89.0m due to one-off effects

Cash flow and dividends
- Increase in free cash flow before acquisitions/securities to EUR 178.3m
- Proposal to the Annual General Meeting: Stable dividend of EUR 1.95 per share

Outlook for 2016
- Stable operating earnings development targeted
   
OVERVIEW OF AUSTRIAN POST

Austrian Post recorded a solid operating performance in the 2015 financial year.
In spite of challenging market conditions, Group revenue rose by 1.6% to EUR
2,401.9m.
 
The Mail & Branch Network Division achieved revenue growth of 0.9% to 1,501,7m
in 2015 in a structurally shrinking market. Once again the basic trends shaping
the letter mail and logistics markets in recent years continued in 2015: The
volume of addressed mail items is under increasing pressure both on a national
and international level due to the substitution of conventional letter mail by
electronic communication. Revenue growth was driven by raised postal rates as of
March 1, 2015 as well as the impetus provided by the increased handling of
international cross border mail volumes.
 
During the reporting period, the Parcel & Logistics Division generated revenue
growth of 2.9% through differing regional developments. The outstanding
logistics and service quality of Austrian Post served as the basis for the
volume increase of 8% to 80 million parcels. On Austrian Post's international
markets, the parcel business in South East and Eastern Europe developed
positively. In contrast, the business development of the German trans-o-flex
Group remained below expectations.

For this reason, Austrian Post assessed various strategic options for the
logistics company trans-o-flex within the context of an evaluation process
carried out in 2015. Austrian Post reached an agreement with strategic investors
LOXXESS Group and Schoeller Holding to sell trans-o-flex. "We have made a clear
decision offering good development perspectives for all
parties involved", says Georg Pölzl, Chief Executive Office of Austrian Post.
The acquisition is expected to take place in the coming weeks subject to 
approval of the German Competition Authority. The disposal of trans-o-flex led
to a one-off non-cash effect in the consolidated financial statements for 2015,
on an adjusted basis the Group reported a good operating result.
 
Operating EBIT before special effects improved by 2.6% to EUR 198.0m, an upward
trend which reflects developments over the first three quarters of the year.
EBIT of Austrian Post for the 2015 financial year was negatively impacted by
special effects, which consisted principally of two items. Firstly, an
impairment of EUR 131.9m was reported, mostly in connection with the sale of the
trans-o-flex subsidiary. Secondly, the consolidated financial statements of
Austrian Post for 2015 contain a positive net effect of EUR 23.0m resulting from
claims related to non-wage costs paid in previous periods. On the basis of the
operating EBIT of EUR 198.0m, the above-mentioned one-off effects in 2015
resulted in a reported EBIT of EUR 89.0m.  
 
Free cash flow before acquisitions and securities totalled EUR 178.3m in 2015,
ahead of the comparable figure of EUR 151.7m in 2014. This solid cash flow
comprises a good basis for Austrian Post to finance its future investments and
dividends. On this basis, the Management Board will propose to the Annual
General Meeting that a dividend of EUR 1.95 per share is to be distributed for
the 2015 financial year, thus continuing the Group's attractive dividend policy.
 
Generally speaking, the basic trends affecting the letter mail and parcel
markets, which have intensified internationally, are expected to continue in
2016. Revenue forecasts of Austrian Post for 2016 depend on a potential change
in its portfolio. Earnings in 2016 will be impacted by revenue trends relating
to letter mail and parcel volumes, but also by new, innovative business
opportunities and the ongoing implementation of the targeted efficiency
enhancement programme. On balance, Austrian Post is striving to maintain a
stable development with an operating result (EBIT) at the same level as in 2015.
 
REVENUE DEVELOPMENT IN DETAIL

Group revenue of Austrian Post rose by 1.6% in the 2015 financial year to EUR
2,401.9m compared to the previous year. Both the Parcel & Logistics Division as
well as the Mail & Branch Network Division contributed to this revenue growth,
expanding by 2.9% and 0.9% respectively.
 
Revenue of the Mail & Branch Network Division totalled EUR 1,501.7m in 2015.
Letter Mail & Mail Solutions revenue at EUR 808.4m climbed 2.3% from the
previous year. The basic trend towards declining mail volumes related to the
substitution of letters by electronic communication continued. This was more
than offset by postal rates as of March 1, 2015 and growing international cross
border mail volumes. Revenue in the Direct Mail business fell by 0.5% to EUR
428.7m during the reporting period. This decline is mainly due to the sale of
two mail subsidiaries in Hungary and Slovakia. Media Post revenue was down 1.7%
in 2015 to EUR 140.8m, which was mainly due to the general decline in the
business with daily, weekly and monthly newspapers and magazines. Branch
Services revenue at EUR 123.8m in the year under review represented a rise of
EUR 0.7m from the previous year. This increase is primarily the result of a
change in the invoicing model of certain retail goods. Revenue from mobile
telephony products and financial services in cooperation with the company's
banking partner BAWAG P.S.K. continued to decline, though a positive trend for
mobile telephony products was evident in the fourth quarter in comparison to the
prior-year period.
 
Revenue of the Parcel & Logistics Division rose by 2.9% in a year-on-year
comparison to EUR 900.2m. From a regional perspective, 54.0% of total revenue in
the Parcel & Logistics Division was generated in Germany, compared to 37.5% in
Austria and 8.5% by the subsidiaries in South East and Eastern Europe. Whereas
the business in Austria and the CEE markets developed very positively, revenue
generated by the German trans-o-flex Group fell by 0.5% due to the challenging
competitive situation. In contrast, revenue in Austria rose by 7.4% in 2015,
driven by the trend towards online shopping and a market share increase in the
business parcel segment. On balance, the subsidiaries in South East and Eastern
Europe posted a substantial revenue increase of 6.6%.
 
EXPENSE AND EARNINGS DEVELOPMENT

Austrian Post's staff costs amounted to EUR 1,106.0m in the 2015 financial year,
comprising a slight decline of 0.3%. The operational staff costs for salaries
and wages included in this amount declined from the previous year.
In addition to ongoing operational staff costs, staff costs also include various
non-operational costs such as termination benefits and changes in provisions,
which are primarily related to the specific employment situation of civil
servants at Austrian Post.
 
Earnings before interest, tax, depreciation and amortisation (EBITDA) of the
Austrian Post Group amounted to EUR 302.7m (margin 12.6%), compared to the
prior-year level of EUR 333.8m. This difference is mainly due to the positive
contribution to EBITDA arising from the sale of Austrian Post's former corporate
headquarters in 2014 for EUR 62.4m. The year 2015 included the repayment claims
related to non-wage costs paid in previous periods less any compensation
payments, with a net effect of EUR 23.0m.
 
Operating EBIT of Austrian Post improved by 2.6% to EUR 198.0m. The comparable
figure of EUR 192.9m in 2014 resulted from the adjustment for the positive
revenue effect of EUR 62.4m relating to the sale of Austrian Post's former
corporate headquarters offset against impairment losses of EUR 58.4m.
 
Two special effects impacted the company's business results in 2015. On balance,
Austrian Post reported impairment losses of EUR 131.9m for 2015, of which EUR
125.8m relate to the German trans-o-flex Group which classified as held for
sale. In addition, a positive net effect of EUR 23.0m was recognised from the
already-mentioned claims related to non-wage costs paid in previous periods less
any compensation payments. Accordingly, the reported EBIT totalled EUR 89.0m.
 
The reported net earnings were negatively impacted by the above-mentioned
special effects. After deducting the income tax expense, the profit for the
period (Group net profit) amounted to EUR 71.6m, compared to the prior-year
level of EUR 146.8m. This corresponds to undiluted earnings per share of EUR
1.06 for the 2015 financial year. Adjusted for the effects after tax as
described above, Group net profit for the period totalled EUR 142.2m, or EUR
2.10 per share.
 
CASH FLOW AND BALANCE SHEET

The cash flow from operating activities in 2015 amounted to EUR 216.2m compared
to EUR 232.2m in 2014. This difference can be attributed to higher tax payments
as well as an increase in trade receivables. This effect was partly offset by a
rise in liabilities.
 
Cash flow from investing activities reached a level of minus EUR 49.0m in 2015,
which was significantly lower than in 2014. This development mainly related to
the sale of Austrian Post's former corporate headquarters in Vienna's first
district, for which the outstanding balance of the purchase price of EUR 60.0m
was paid in the first quarter of 2015. Cash outflows for the acquisition of
property, plant and equipment (CAPEX) amounted to EUR 104.7m during the
reporting period, above the level of EUR 82.6m in the previous year. CAPEX
included payments of about EUR 33m for the construction of Austrian Post's new
corporate headquarters.
 
In aggregate, free cash flow during the reporting period was EUR 167.2m, up from
EUR 162.8m in the previous year. Free cash flow before acquisitions/securities
reached EUR 178.3m, thus higher than the prior-year figure. This provides a good
basis for Austrian Post's ability to finance investments and dividends in the
future.
 
Austrian Post pursues a conservative balance sheet and financing structure. This
is primarily demonstrated by the high equity ratio, low financial liabilities
and the solid level of cash and cash equivalents invested with the least
possible risk. Equity of the Austrian Post Group amounted to EUR 641.7m as at
December 31, 2015, corresponding to an equity ratio of 39.8%. The analysis of
the company's financial position shows a high level of financial resources
totaling EUR 356.7m. This includes cash and cash equivalents of EUR 299.6m and
securities of EUR 57.2m. These financial resources are in contrast to financial
liabilities of only EUR 12.6m. 
 
EMPLOYEES

The average number of full-time employees at the Austrian Post Group totalled
23,476 people during the period under review, comprising a decrease of 436
employees from the prior-year period. Most of Austrian Post's staff (full-time
equivalents) is employed by the parent company Österreichische Post AG (a total
of 17,983 full-time equivalents). A total of 5,493 people (full-time
equivalents) are employed by the subsidiaries.
 
OUTLOOK 2016

Generally speaking, the basic trends impacting the letter mail and logistics
markets in recent years are expected to continue in 2016. Volumes of addressed
mail are under pressure on both a national and international level, whereas
parcel volumes to private customers are rising, driven by increasing online
orders. In addition to the current basic trends in the mail and parcel business,
the revenue forecasts for Austrian Post in 2016 also considerably depend on a
potential change in its portfolio. This could be a deconsolidation of the trans-
o-flex Group or a potential increase in the stake held by Austrian Post in the
Turkish parcel services provider Aras Kargo, which will be decided in the course
of the year. With the exception of these two measures, Austrian Post is striving
to maintain a largely stable revenue development in 2016.
 
In the mail business, the basic trend of e-substitution i.e. the substitution of
traditional letter mail by electronic communication is likely to continue,
resulting in further volume declines. This downward trend is also anticipated
for 2016, accompanied by a drop in mail volumes within the predicted range of
minus 3-5%. The direct mail business will continue to show a differentiated
development in the individual customer segments, with a decrease perceptible for
addressed direct mail items in particular.
 
The development of the Parcel & Logistics Division is impacted by differing
trends in the private and business parcel segments. Considerable growth
continues to be anticipated in the private customer parcel segment due to the
steadily growing online business. At the same time, intensified competition is
expected as a result of the positive development in this market segment. In
turn, this could impact parcel prices and volumes and thus the company's
business development. In contrast, subdued economic growth prospects are
unlikely to provide much impetus to the business parcel segment.
 
On balance, Austrian Post aims to achieve a stable development in 2016, with an
operating EBIT at the prior-year level.
 
The operating cash flow generated by Austrian Post will continue to be used
prudently and in a targeted manner to finance sustainable efficiency increases,
structural measures and future-oriented investments. With this in mind,
operational capital expenditure (CAPEX) of about EUR 80m is planned in 2016,
focusing on sorting technologies, logistics and customer solutions. In addition,
Austrian Post is in the process of building its new corporate headquarters in
Vienna's third district. The project is expected to be completed in 2017. The
Management Board will propose to the Annual General Meeting scheduled for April
14, 2016 to approve the distribution of a dividend amounting to EUR 1.95 per
share for the 2015 financial year. Thus, the company is once again continuing
its attractive and predictable dividend policy on the basis of a solid balance
sheet structure and the generated cash flow. Austrian Post adheres to its
objective of distributing at least 75% of the Group's net profit to its
shareholders.
 
The interim financial report FY 2015 is available on the Internet at
www.post.at/ir --> Publications --> Financial Reports.
contact

                      
Vienna, March 10, 2016
 


KEY FIGURES


                                               Change                           
  
                                              2014/2015
EUR m               2014*       2015          %      EUR m   Q4 2014*    Q4 2015
Revenue           2,363.5    2,401.9       1.6%       38.5      636.0      655.4
 thereof Mail &   1,487.7    1,501.7       0.9%       14.0      402.0      412.2
Network
Division
 thereof
Parcel &            875.0      900.2       2.9%       25.2      233.8      243.2
Logistics
Division
 thereof
Corporate/            0.8        0.1     -87.5%       -0.7        0.2        0.0
Consolidation
Other
operating           134.4       99.2     -26.2%      -35.3       84.3       48.8
income
Raw materials,
consumables        -737.5     -749.6      -1.6%      -12.1     -197.2     -203.6
and services
used
Staff costs      -1,109.5   -1,106.0       0.3%        3.5     -294.1     -292.3

Other
operating          -317.0     -344.0      -8.5%      -27.0      -96.8     -106.1
expenses
Results from
financial
assets               -0.1        1.1      >100%        1.3        1.4        1.3
accounted for
using the
equity method
Earnings
before
interest, tax,
depreciation        333.8      302.7      -9.3%      -31.1      133.6      103.4
and
amortisation
(EBITDA)
Depreciation

and                 -84.9      -85.0      -0.1%       -0.1      -22.2      -21.0
amortisation
Impairment          -52.0     -128.7      >100%      -76.7      -47.1     -128.6
losses
Operating EBIT
adjusted for        192.9      198.0       2.6%        5.1       60.2       62.7
one offs
Special               4.0     -108.9     <-100%     -112.9        4.0     -108.9
effects

Earnings
before              196.9       89.0     -54.8%     -107.8       64.2      -46.2
interest and
tax (EBIT)
 thereof
Mail & Branch       270.0      284.7       5.4%       14.7       74.5       76.1
Network
Division
 hereof
Parcel &            -19.5     -105.4     <-100%      -85.9      -38.1     -121.9
Logistics
Division
 thereof
Corporate/          -53.6      -90.3     -68.5%      -36.7       27.9       -0.4
Consolidation 
Other
financial            -2.8        2.0      >100%        4.8       -0.4       -0.6
result
Earnings

before tax          194.0       91.0     -53.1%     -103.0       63.8      -46.8
(EBT)
Income tax          -47.2      -19.5      58.7%       27.7      -16.8       14.3
Profit for the      146.8 71.6/142.2**        -          -       47.1      -32.5
period                             
Earnings per          2.17  1.06/2.10**       -          -          -          -
share (EUR)***                       
Cash flow from
operating           232.2      216.2      -6.9%      -16.0       67.6       62.6

activities
Investments in
property,
plant and           -82.6     -104.7     -26.8%      -22.1      -29.6      -43.4
equipment
(CAPEX)
Free cash flow
before              151.7      178.3      17.5%       26.6       43.2       20.0
acquisitions/
securities

 
* The presentation of Revenue and Raw materials, consumables and services used
in the Parcel & Logistics Division was adjusted.
Exported services were recognised according to the net method (previously
reported as revenue and expenses for services used)
** Adjusted for special effects
*** Undiluted earnings per share in relation to 67,552,638 shares

Further inquiry note:
Österreichische Post AG
Mag. Ingeborg Gratzer
Leitung Presse & Interne Kommunikation
Tel.: +43 (0) 57767-32010
ingeborg.gratzer@post.at

Österreichische Post AG
DI Harald Hagenauer
Leitung Investor Relations, Konzernrevision & Compliance 
Tel.: +43 (0) 57767-30400
harald.hagenauer@post.at

end of announcement                               euro adhoc 
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company:     Österreichische Post AG
             Haidingergasse  1
             A-1030 Wien
phone:       +43 (0)57767-0
mail:     investor@post.at
WWW:      www.post.at
sector:      Transport
ISIN:        AT0000APOST4
indexes:     ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English
 

 

 

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