EANS-Adhoc: Österreichische Post AG / Austrian Post - Annual Results 2008:

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annual report

12.03.2009

Revenue up 5.4%, EBIT increase of 4.1%, solid balance sheet,
high cash flow, attractive dividend policy
Stability and continuity are the top priorities

- Group revenue up 5.4% in 2008 to EUR 2,441.4m - Mail: Good
development in all areas (revenue +5.7%), organic revenue growth
of 1.3% - Parcel & Logistics: revenue increase of 6.4% in spite of
reduced parcel volume in the Austrian B2C business; growth
primarily the result of acquisitions - Branch Network: good
development of financial services - Earnings before interest and tax
(EBIT) of EUR 169.5m (+4.1%) - Solid balance sheet: equity ratio of
40%, no external borrowing requirements - Prudent balance sheet
policy: conservative balance sheet, and financial structure serve to
minimise risks - Attractive and stable dividend policy based on a
strong cash flow and solid balance sheet - Continuity in the
management and the further development of the Group

Austrian Post in 2008 The 2008 financial year developed positively
for Austrian Post. Revenue rose 5.4%, and EBIT was up 4.1%. Growth
was primarily based on acquisitions, but also included organic growth
of 0.8%. This success is particularly impressive in the light of the
major challenges faced by the company in the 2008 financial year. The
loss of two important parcels customers in the Austrian market had to
be compensated for as well as the integration costs of new
subsidiaries, higher costs due to increased fuel and transport prices
as well as a rise in expenditure for the employee social plan. So
far, Austrian Post has hardly been impacted by the financial crisis
in 2008. This is primarily related to the solid balance sheet
structure, enabling Austrian Post to operate without any external
borrowing requirements. Investments and acquisitions are financed
from the current cash flow.

As in the past, precautionary measures were taken by the company to
avoid both operational and balance sheet risks. These measures
include the ongoing evaluation of assets and impairment losses
taken on property, plant and equipment and intangible assets, as
well as the reduction in the valuation of Austrian Post's stake in
the consortium BAWAG PSK. Accordingly, Austrian Post enjoys a strong
equity ratio of 40% at the end of 2008 and a low net debt. With a
liquidity cushion of EUR 340.6m, the company has a higher level of
cash and cash equivalents and securities at its disposal than
financial liabilities. This prudent balance sheet policy and the high
cash flow are the basis for an attractive dividend policy. In this
regard, the Management Board will not only propose to the Annual
General Meeting scheduled for May 6, 2009 that a basic dividend
amounting to EUR 1.50/share be distributed to shareholders, but also
a special dividend of EUR 1.00/share as in the previous year. In
2009, stability and value generation remain top priorities for
Austrian Post. However, it is becoming increasingly difficult to
develop a precise outlook, because the uncertain business environment
reduces the reliability of any forecasts. Against the backdrop of the
complete liberalisation of the postal market in 2011, ensuring
nationwide postal services and fair conditions for the Austrian
postal sector by means of a new Austrian Postal Act will be important
milestones for 2009. Safeguarding the future viability of Austrian
Post and increasing its efficiency and flexibility will also be key
focal points of the Group in the current financial year. Stability
and continuity are the top priorities Austrian Post has been a
publicly listed, private company for three years, with the Austrian
State as its majority shareholder, and is subject to compliance with
the relevant legal regulations. As a consequence, Austrian Post
assumes responsibility towards its employees as well as customers and
shareholders.

Austrian Post has been successful for many years, because it has
always developed appropriate responses to the demands of the
marketplace. As a public limited company, Austrian Post has
positioned itself in an excellent way in recent years and has
operated successfully on behalf of all its stakeholders: - for
employees, who, for example, receive an EBIT bonus in addition to
their salaries - for the Ministry of Finance, because Austrian
Post is a large taxpayer - for its owners, because Austrian Post
generates profits and distributes dividends - for Austria as a
business location, because the company is continually striving to
expand and improve its postal services and banking services (PSK
Bank), and finally - for customers, due to the fact that modern
structures, a larger number of postal service points and better
opening hours ensure high-quality services

Today Austrian Post is confronted with a fundamental change in the
postal market. The company must make the necessary preparations ahead
of time in order to come to terms with the complete liberalisation of
the postal sector in 2011. In accordance with the stock corporation
law, the Management Board is responsible for developing appropriate
measures and structures to optimally deal with the changes that lie
ahead. "All measures designed to further optimise the economic
situation of the company, ensure stability and generate value are
based on the unanimous decision of the entire Management Board.
Austrian Post will continue to attach great importance to the future
of Austria as a business location and providing all Austrians with
high quality services in the future", says Rudolf Jettmar, Member of
the Management Board of Austrian Post and Interim CEO.

Continuity in the management and further development of the Group is
ensured at all times, even after the resignation of Anton Wais from
the Management Board of Austrian Post for health reasons.

Business development in detail The year 2008 posed major challenges
to Austrian Post in the light of the increasingly serious
international financial crisis, and particularly the loss of the two
most important mail order customers in the Austrian parcels business.
Despite these negative influences, Austrian Post succeeded in
increasing total revenue by 5.4% compared to the previous year, to
EUR 2,441.4m. In addition to organic growth (+ EUR 19.0m), this
increase is primarily related to the consolidation of new
subsidiaries (+ EUR 106.7m).

Revenues of the Mail Division improved during the year under review
by 5.7% compared to 2007, featuring good revenue development in all
three business areas. Revenue of the Letter Mail Business Area
remained almost constant, despite the ongoing trend to electronic
substitution, whereas the Infomail Business Area (addressed and
unaddressed direct mail items) and the Media Post Business Area
posted solid organic growth. Revenue of the Parcel & Logistics
Division increased by 6.4%, to EUR 785.9m. This can be mainly
attributed to higher revenues derived from the Premium Parcel service
in Austria (parcel delivery within 24 hours) and internationally, as
well as growth generated by the newly-acquired subsidiaries. The 0.1%
rise in revenues achieved by the Branch Network Division is due to
the good development of financial services.

Austrian Post's performance in the fourth quarter of 2008 also
showed an increase in revenues compared to Q4 2007. Group revenues
rose 1.3%, or EUR 8.3m, to EUR 656.8m. Revenues in the Mail
Division were up 0.6% year-on-year, the Parcel & Logistics
Division improved by 1.8% in the fourth quarter of 2008, and Branch
Network Division revenues rose by 3.3%.

Revenue

EUR m 2007 2008 +/- % Q4 2007 Q4 2008
Revenue 2,315.7 2,441.4 +5.4% 648.4 656.8
EBITDA 292.7 321.7 +9.9% 101.2 134.8
EBIT 162.8 169.5 +4.1% 44.4 66.5
EBT 164.9 158.2 -4.0% 41.4 47.1
Profit for the
period 122.6 118.9 -3.1% 26.5 31.3
Earnings per share 1.75 1.71 -2.3% 0.38 0.45
(EUR)

In addition to a 5.4% increase in total revenues, the income
statement of Austrian Post shows higher expenses for raw materials,
consumables and other services used, which rose by 12.4% in 2008,
to EUR 778.2m. This increase of EUR 86.0m is primarily related
to the consolidation of the newly-acquired subsidiaries (EUR
58.7m) as well as higher fuel and transport costs during the period
under review (+ EUR 23.4m).

The staff costs of Austrian Post at EUR 1,119.2m constituted 46%
of total revenues, the largest operating expense item. The average
number of employees (full-time equivalents) rose to 27,002, up from
25,764 in the preceding year. This increase is entirely due to the
acquisition of subsidiaries. In the 2008 financial year,
expenditures for termination benefits, particularly in the
third and fourth quarters, led to higher staff costs. As a
result, the termination benefit expense climbed from EUR 16.9m in
2007 to EUR 24.5m in 2008.

As in previous years, staff costs also include changes to provisions
for employee under-utilisation. In the 2008 financial year, the
provisions allocated for employee under-utilisation were reduced by a
total of EUR 23.1m. In the fourth quarter of 2008 in particular,
employees took increased advantage of the incentives offered by
Austrian Post to leave the company, including voluntary termination
benefits and temporary assistance for employees through the employee
social plan. Moreover, structural measures were implemented in order
to reintegrate a greater number of employees into the company's
operations. As a result, the provision for employee under-utilisation
was reduced in the 2008 financial year.

EBITDA of Austrian Post amounted to EUR 321.7m, or 9.9% above the
comparable level of 2007. Accordingly, the EBITDA margin was 13.2%.

Depreciation, amortisation and impairment losses of Austrian Post
rose to EUR 152.2m in 2008. This amount includes impairment losses
on goodwill and customer relationships, carried out based on the
ongoing valuation of assets, which led to a reduction of balance
sheet risks. In detail, the depreciation for property, plant
and equipment as well as amortisation for intangible assets
amounted to EUR 104.7m, whereas impairment losses for property,
plant and equipment totalled EUR 6.7m and for intangible assets EUR
40.8m.

Earnings before interest and tax (EBIT) of Austrian Post amounted to
EUR 169.5m in 2008. This change can be attributed to the following
factors: the above- mentioned reduction of provisions for employee
under-utilisation had a positive effect on earnings, whereas
impairment losses (for property, plant and equipment, goodwill,
customer relationships and trademark rights) had a negative impact on
earnings. One-off effects which led to higher operating expenses also
burdened results, in particular higher transport and fuel costs,
increased expenditures for the employee social plan and costs
relating to the integration of the new subsidiaries.

In addition, Austrian Post had to cope with a decline in revenues and
earnings in the Austrian parcels segment. The loss of the two largest
mail order customers represented a significant share of Austrian
Post's B2C parcels business in Austria. However, the streamlining of
the company's logistics operations initiated as a response to this
change in the Austrian market proceeded as planned. A third of the
parcel delivery bases were closed and letter mail and parcel
logistics were merged wherever possible.

The financial result of Austrian Post declined from EUR 2.1m in 2007
to minus EUR 11.3m in 2008. This is primarily the consequence of an
impairment loss of EUR 20.0m recognised for Austrian Post's
shareholding in the consortium BAWAG PSK. The valuation was revised
as a result of the international financial crisis and the related new
valuation approach in the banking sector.

Earnings before tax declined by 4.0%, to EUR 158.2m. After deducting
the income tax expense of EUR 39.3m, the Group net profit for the
period (corresponding to the profit after tax) totalled EUR 118.9m.

Assets and finances Austrian Post pursues a risk-averse business
strategy. This is reflected in the high equity ratio of 40%, the low
level of financial liabilities and the solid investments of cash and
cash equivalents at the lowest possible risk. The international
financial and economic crisis has led Austrian Post to continue the
ongoing evaluation of its assets. Lower market expectations led to
impairment losses on property, plant and equipment, intangible assets
and financial investments.

The analysis of the balance sheet of Austrian Post by item shows a
considerable amount of financial resources on the assets side. On
balance, Austrian Post's liquidity cushion totals EUR 340.6m,
including cash and cash equivalents of EUR 248.1m and financial
investments in securities of EUR 92.5m. The investment policy of
Austrian Post is based on the lowest possible risk.

On the equity and liabilities side, the main items are capital and
reserves (39.6%) and provisions (31.2%). The provisions for employee
underutilisation contained in this item declined by EUR 23.1m in
2008, to EUR 307.8m.

Cash Flow In 2008, operating cash flow before changes in working
capital amounted to EUR 237.0m, below the comparable level of 2007.
On an operational level, cash flow was negatively impacted by the
loss of two major parcel customers in Austria, higher transport and
fuel costs, increased expenditures for the employee social plan and
the costs of integrating new subsidiaries. Moreover, Austrian Post
made higher tax back payments in 2008.

The cash flow from investing activities at minus EUR 23.1m includes
the purchase of property, plant and equipment (CAPEX) amounting to
EUR 102.9m, the acquisition of subsidiaries including the acquisition
of minority interests totalling EUR 30.5m, proceeds from the disposal
of property, plant and equipment of EUR 40.0m, as well as the
proceeds from the sale of financial investments in securities
amounting to EUR 52.9m. Total free cash flow rose from EUR 153.5m in
2007 to EUR 210.3m in 2008, corresponding to EUR 3 per share.

Outlook 2009 The current uncertain international business environment
reduces the ability of Austrian Post to make precise forecasts for
upcoming periods. The outlook for 2009 assumes that the overall
market environment for Austrian Post and consumer demand will not
deteriorate even further than previously expected. The ambitious
targets were defined according to the information and economic
forecasts currently at the company's disposal. However, the duration
and scope of the existing recession are far from predictable. The
market development and overall business environment are subject to
many uncertainties which are not capable of being influenced by the
company.

In the Mail Division, there will continue to be a reduction in letter
mail volumes due to the effects of electronic media substitution.
However, the company plans to counteract this trend by intensifying
the development of direct mail items (business-to-business
communications) and launching new services along the letter mail
delivery value chain. The Parcel & Logistics Division expects largely
stable transport volumes in the face of ongoing intense competition.
The increasing Internet business will continue to serve as a growth
driver for parcel volumes, along with Austrian Post's growing market
share in the Austrian B2B business. The Branch Network Division's
offering of banking services will benefit from the overall trend
towards secure investment products.

In terms of its financing requirements for 2009, Austrian Post
anticipates capital expenditure (CAPEX) to total approximately EUR
100m. More restraint will be exerted with respect to acquisitions
during the year 2009. No major acquisition targets, which would meet
the criteria of Austrian Post, are under consideration at present.
The current priority is the integration of the newly- acquired
subsidiaries.

Austrian Post has set ambitious goals despite the current difficult
economic environment. On balance, Austrian Post expects total
revenues in 2009 to match the figure for 2008. Earnings before
interest and tax (EBIT) are also targeted to be at the same level as
in 2008. However, a slight decline in revenues and earnings cannot be
excluded in the light of possibly deteriorating recessionary trends.
In order to ensure that the targets are achieved, the management of
Austrian Post will do everything possible on a short-term and
medium-term basis, particularly against the backdrop of the current
business environment, to increase the flexibility and efficiency of
the company and thus preserve shareholder value.

Based on a solid balance sheet structure and strong cash flow
generation, Austrian Post plans to continue pursuing an attractive
dividend policy. The Management Board of Austrian Post will propose
to the upcoming Annual General Meeting on May 6, 2009 the
distribution of a basic dividend of EUR 1.50 per share (dividend
payment day on May 20, 2009) and a special dividend of EUR 1.00 per
share (to be paid on August 20, 2009). The company also plans to
adhere to its target of achieving a dividend payout ratio of at least
75% of net profit.

Performance of divisions Mail Division Year-on-year external sales of
the Mail Division rose by 5.7%, to EUR 1,460.0m. The increase
primarily resulted from the consolidation of the subsidiary
meiller direct, acquired in July 2007, as well as organic growth of
about 1.3%.

The Letter Mail Business Area was almost stable, recording a 0.3%
decline in revenues. The ongoing electronic substitution of
letter mail by electronic media was offset by positive trends in
other segments. For example, there was a revenue increase in the
public sector due to new opportunities for absentee voting, or
the higher mail volumes on the part of Austria's social insurance
companies. Postal volumes from mail order companies also increased as
a result of the intensified distribution of catalogues.

In the Infomail Business Area (addressed and unaddressed direct
mail items), revenue rose by 16.4%. The rise was primarily the
result of the consolidation of the meiller direct companies
acquired in 2007, as well as organic growth of 2.9%. The increase
in mail volumes applied to both addressed and unaddressed mail
items. The Media Post Business Area also recorded a revenue
increase (+ 3.6%), mainly related to the good performance of
regional media as well as the positive effects of regional and
national elections in Austria.

On balance, the Mail Division of Austrian Post generated an
EBITDA of EUR 297.1m. In addition to depreciation of EUR 34.6m, the
Mail Division recorded an impairment loss on intangible assets
totalling EUR 7.6m. The resulting EBIT amounted to EUR 254.5m.

Parcel & Logistics Division External sales of the Parcel & Logistics
Division rose by 6.4% in 2008, to EUR 785.9m, which is mainly due to
acquisitions, which contributed EUR 45.8m of total revenue.

Revenues amounted to EUR 659.6m, with the main contribution (84% of
total revenues) coming from the Premium Parcel service (parcel
delivery within 24 hours to private and business customers), which
expanded by 12.6% in 2008. This growth was due to organic growth as
well as the acquisition of new companies. The most significant share
of revenues, approximately EUR 500m, was achieved by the Austrian
Post subsidiary trans-o-flex in Germany, which focuses on
pharmaceutical logistics, combined freight and temperature-controlled
transport services. Moreover, the network in Western Europe was
further expanded based on the acquisition of the Belgian company HSH.
South East Europe and Eastern Europe contributed approximately 60m in
revenues. In 2008, Austrian Post also acquired 24VIP in
Bosnia-Herzegovina.

As expected, the total volume decreased in the Standard Parcels
segment in Austria (accounting for some 15% of total division sales),
due to the market entry of a competitive parcel services provider. In
response, Austrian Post implemented a restructuring process on
schedule in 2008, including both a reduction in headcount as well as
the number of parcel sorting centres in Austria.

In the 2008 financial year, earnings before interest, tax,
depreciation and amortisation (EBITDA) of the Parcel & Logistics
Division amounted to EUR 34.8m (2007: EUR 46.5m). The decline was
related to the loss of two large mail order parcels customers, the
integration costs of the new subsidiaries in the Netherlands and
Belgium, as well as higher transport and fuel costs.

The Parcel & Logistics Division recognised impairment losses for
goodwill and customer relationships in respect of the acquired
subsidiaries of the trans-o- flex Group amounting to EUR 33.4m,
leading to a negative EBIT of EUR 25.5m for 2008.

Branch Network Division External sales of the Branch Network Division
rose by 0.1% compared to 2007, to EUR 192.2m. The decline in sales of
retail products, in particular mobile telephony sales, was largely
compensated by the growth in financial services and other post office
products. Despite the current financial market crisis, the Branch
Network Division achieved growth in the financial services segment,
in particular for standard products. Growth measures such as the
sales drive targeting private customers were initiated. Internal
sales of the division also improved.

EBITDA as well as earnings before interest and tax (EBIT) of the
Branch Network Division could be enhanced through cost discipline and
organisational optimisation measures. EBIT improved from EUR 13.6m in
2007 to EUR 14.5m in 2008.

Vienna, March 12, 2009

end of announcement euro adhoc
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ots Originaltext: Österreichische Post AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Austrian Post

Investor Relations:

Harald Hagenauer

Tel.: +43(0)57767-30401

mailto:harald.hagenauer@post.at

Corporate Communications/Public Relations:

Head of Group Communications

Mr. Marc Zimmermann

Tel.: +43 (0) 57767 - 22626

marc.zimmermann@post.at

Press Spokesman

Michael Homola

Tel.: +43(0)57767-32010

mailto:michael.homola@post.at

Branche: Transport
ISIN: AT0000APOST4
WKN: A0JML5
Index: ATX Prime, ATX
Börsen: Wiener Börse AG / stock market