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

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3-month report

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 working days in the first quarter of
2009. Revenue decreases could not be fully compensated by cost
reduction measures.

The cash flow from changes in working capital amounted to minus EUR
26.8m in Q1 2009, which relates to increased receivables from other
postal companies accompanied by a simultaneous reduction in
liabilities. This seasonal effect should be significantly reduced on
an annual basis, similar to the situation in the year 2008. On
balance, the cash flow from operating activities totalled EUR 30.5m
in the first three months of 2009.

The cash flow from investing activities at minus EUR 32.3m includes
the purchase of property, plant and equipment (CAPEX) amounting to
EUR 14.9m, as well as financial investments in securities, at EUR
24.7m. All in all, total free cash flow reported in the first quarter
of 2009 was minus EUR 1.8m, whereas the free cash flow generated
before financial investments in securities was EUR 22.9m.

Employees During the period under review, the average number of
full-time employees at Austrian Post fell by 2.5%, or 674 people, to
26,012. This decline can be attributed to the lower number of
employees working for the Mail Division.

Most of Austrian Post's labour force (21,655 full-time equivalent
employees) is employed by the parent company, Österreichische Post
AG. The remaining 4,300 employees are employed at subsidiaries.

Outlook for 2009 The first months of 2009 have already demonstrated
that a more difficult economic environment is to be expected for the
year as a whole than originally forecast at the beginning of the
year. Economic expectations for the markets in which Austrian Post
operates have been continually revised downwards. 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% Austria respectively. In April 2009, the EU
Commission already forecast that the Austrian economy would contract
by -4.0% in 2009. Austrian Post will not be immune against the
consequences of this immense economic downswing. We expect that the
deteriorating economic situation will continue to have a negative
effect on letter mail, parcel delivery and direct mail volumes.

We anticipate that the trends manifested in the first quarter will
continue for the time being. In the Mail Division, recessionary
tendencies will continue to have a negative impact on business mail
and direct mail volumes. In the Parcel & Logistics Division, the
focus on selected branches and the positive impetus for growth
provided by Internet-based businesses will contribute towards
reducing the consequences of the economic downturn compared to other
logistics segments. Positive effects are anticipated as a result of
Austrian Post's growing B2C parcel business in Austria during the
second half of the 2009 financial year. The Branch Network Division
is also expected to show a stable development. Based on the uncertain
economic situation, Austrian Post is not in a position to seriously
provide a detailed revenue and earnings outlook for 2009 at this
time. As already predicted and demonstrated by first quarter
developments, revenue will be negatively impacted by the unfavourable
economic situation and the accompanying decline in letter mail and
parcel delivery volumes. For this reason, the main goal of Austrian
Post's management team is to do its best to counteract the impending
revenue decline by implementing operational cost savings and thereby
keep earnings reductions at a minimum. This approach involves
implementing appropriate measures to carry out a sales offensive and
enhance efficiency. 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 or
document printing.

Moreover, efficiency improvements and rationalisation measures are
essential in order to compensate for falling 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 all
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 Branch Network Division Austrian Post will start replacing 300
unprofitable company-owned branches with partner-operated postal
service points in the second half of 2009, which will also have a
positive effect on earnings.

Performance of divisions Mail Division External sales of the Mail
Division fell 4.6% from the comparable period of 2008, to EUR 353.0m.
This decline primarily resulted from the economic slowdown as well as
the two fewer working days than in the first quarter of the previous
year.

Revenue generated by the Letter Mail Business Area was down by 3.9%,
or EUR 7.9m. In addition to the substitution of traditional letters
by electronic media, the unfavorable economic situation of many
customers resulted in lower letter mail volumes. An analysis of
business development on a sectoral basis does not present a unified
picture. Whereas mail volumes in the financial services sector have
remained relatively constant, the telecommunications and industrial
segments have been subject to negative growth. In addition, the lower
number of working days in the first quarter of 2009 compared to the
previous year also had a detrimental effect on business.

The revenue achieved by the Infomail Business Area (addressed and
unaddressed direct mail items) was also lower than in Q1 2008,
decreasing by 6.5%, or EUR 8.6m. This downward trend can be
attributed to the decline in printing orders for advertising
materials (meiller direct) as well as the overall volatile volume
development of advertising mail. For many customer groups, for
example in the retail business, direct mailings continue to represent
an important weekly instrument stimulating consumer sales. In
contrast, several customer segments, in particular mail order firms,
are reducing or postponing advertising campaigns as a result of the
economic downturn. Positive effects on mail volumes in Austria can be
expected in the second and third quarters of 2009 as a result of
upcoming elections.

Due to the prevailing market environment, the Media Post Business
Area also posted a decline in revenue, which fell 1.2% in the first
quarter of 2009.

On balance, the Mail Division generated an EBITDA of EUR 71.2m,
whereas EBIT in Q1 2009 amounted to EUR 63.1m, a decrease of 14.9%,
or EUR 11.0m, from the comparable period of the previous year.

Parcel & Logistics Division In the first quarter of 2009, external
sales of the Parcel & Logistics Division declined by 0.1%, to EUR
190.9m, which is mainly related to recessionary trends in core
markets. Moreover, downward pressure on prices has been perceptible
in all markets.

The main contribution to total revenue was made by the premium parcel
service (parcel delivery within 24 hours to private and business
customers), which accounted for EUR 160m. Against the backdrop of the
international recession, revenue fell in several countries. However,
land transport suffered a more moderate decline than many other
logistics segments, such as in the freight or express businesses. For
the most part, this drop in parcel volumes was compensated by an
expansion in the consolidation scope.

From a regional perspective, the subsidiary trans-o-flex focusing on
pharmaceutical logistics, combined freight and temperature-controlled
transport in Germany accounted for the largest revenue share in this
product segment, at about 75%. This was followed by the Austrian
market (9%), which featured ongoing growth in B2B parcel volumes,
South Eastern Europe and Eastern Europe (8%), and the trans-o-flex
companies in the Netherlands and Belgium (8%).

Total revenue generated by the standard parcels segment in Austria
totalled EUR 31m. Business development remained stable in the first
quarter of 2009, following the revenue decline in the previous year
resulting from the loss of two large mail order customers.

EBIT of the Parcel & Logistics Division in Q1 2009 was still
positive, at EUR 0.7m, but was nevertheless considerably below the
operating result achieved in the preceding year. This development is
related to the perceptible price pressure, a recession-related
delayed trend reversal in the Netherlands as well as reduced internal
sales. As of June 1, 2009, the situation of Austrian Post will
change due to a newly-concluded customer relationship with the parcel
provider Hermes. An annual volume growth of several million parcels
is expected as a consequence of the newly-signed contract.

Branch Network Division During the first three months of 2009,
external sales of the Branch Network Division climbed by 5.6%
compared to Q1 2008. Despite the current market situation, Austrian
Post raised sales of retail products, particularly in the mobile
telephony and fixed line segments.

The financial services segment also showed a gratifying development.
The volume of savings deposited at varying interest rates increased,
as did investments in securities.

The change of internal sales of the Branch Network Division, which
fell minus 6.7%, is attributable to the decline in letter mail and
parcel volumes in the branch network, as well as the decrease in
philately sales, which climbed in the previous year as a result of
UEFA EURO 2008 and a large international postage stamp exhibition.

Due to the lower internal sales, EBIT of the Branch Network Division
fell to EUR 0.2m, down from EUR 2.6m in the first quarter of the
preceding year.

The planned conversion of 300 unprofitable company-operated branches
to partner- operated postal service points will be carried out in the
second half of 2009, and thus has not yet resulted in any
efficiency-enhancing effects.

Vienna, May 19, 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:

Contact:

Austrian Post

Head of Investor Relations

Mr. Harald Hagenauer

Tel.: +43 (0) 57767 - 30400

Head of Group Communications

Mr. Marc Zimmermann

Tel.: +43 (0) 57767 - 22626

marc.zimmermann@post.at

Group Communication/Press Spokesman

Mr. Michael Homola

Tel.: +43 (0) 57767 - 32010

michael.homola@post.at

Branche: Transport
ISIN: AT0000APOST4
WKN: A0JML5
Index: ATX Prime, ATX
Börsen: Wien / stock market