EANS-Adhoc: Revenue Decline of 1.6% as Expected; Cost Reduction Measures Have a Positive Impact - Earnings Only Slightly Below Prior-Year Level; Higher free cash flow

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3-month report/Austrian Post Q1 2010:

20.05.2010

Austrian Post Q1 2010: Revenue Decline of 1.6% as Expected; Cost
Reduction Measures Have a Positive Impact - Earnings Only Slightly
Below Prior-Year Level; Higher free cash flow

- Ongoing difficult market environment in 2010

- Mail Division: electronic substitution of letters is continuing
- Parcel & Logistics Division: increased parcel volumes but price pressure
continues
- Branch Network Division: revenue and structural change in the branch
network

- Group revenue down 1.6% in Q1 as expected - Cost reduction measures
have a positive impact - Raw materials, consumables and
services used: -2.8%, Staff costs: -0.7%, Other operating
expenses: -2.4% - Q1 earnings below the prior-year figure -
EBITDA margin remains high at 11.7% - EBIT at EUR 45.3m, a
decrease of EUR 2.4m from Q1 2009 - Free cash flow of EUR 30.1m
surpasses previous year´s level - 2010 outlook confirmed

Austrian Post at a glance The market environment faced by Austrian
Post in the first quarter of 2010 continued to be difficult.
Electronic substitution of letters is ongoing, as expected, whereas
the advertising market is slowly improving. Moreover, the parcel and
logistics segment in our core markets is showing an upward trend, as
demonstrated by volume increases. Accordingly, Group revenue declined
in the first quarter of the 2010 financial year as expected, falling
by 1.6% or EUR 9.5m, to EUR 585.6m.

Efficiency enhancement measures, designed to counteract the revenue
decline, are the top priority for Austrian Post. Accordingly,
operating costs and staff costs could be reduced in the first quarter
of the current financial year. In the first three months of 2010,
EBIT amounted to EUR 45.3m, only EUR 2.4m below the previous year.
Cash flow remained at a stable level and free cash flow before the
acquisition or disposal of securities even climbed by EUR 7.2m, to
EUR 30.1m.

"The current business development confirms our outlook for the year
2010 as a whole. We continue to expect that Group revenue will
decline by 1-2% compared to 2009 but we will be able to maintain an
EBITDA margin between 10% and 12%", says Austrian Post CEO Georg
Pölzl.

Business development - earnings in detail The business development of
Austrian Post in the first quarter of 2010 was shaped by the ongoing
difficult market environment. Electronic substitution of letter mail
along with the revenue and structural transformation taking place in
the Branch Network Division had a negative impact, whereas a positive
volume development was evident in the Parcel & Logistics Division.
Accordingly, total revenue of Austrian Post during the first quarter
of the 2010 financial year fell 1.6%, or EUR 9.5m, to EUR 585.6m.

In the first three months, revenue of the Mail Division was down 1.4%
in a year- on-year comparison, although the Infomail and Media Post
Business Areas posted gains. The most striking trend remains the
electronic substitution of letters, which was counteracted by
numerous elections (postal voting) and the increased dispatching of
passports in the first quarter of 2010. In addition to these one- off
effects, the Infomail Business Area profited from growing demand on
the part of the advertising industry.

The Parcel & Logistics Division posted a 2.6% growth in revenue. The
volume increase in its core business was gratifying. Adjusted for the
termination of unprofitable transport logistics operations the rise
in revenue in Germany, was 7% year-on-year. Revenue also climbed
considerably in Austria and in South East and Eastern Europe.

The revenue and organisational structure of the Branch Network
Division is undergoing change. Revenue declined by EUR 9.8m, whereas
total operating expenses were reduced by EUR 11.7m.

The change in policy for reporting revenue derived from sales of
prepaid phone cards, based on the new Austrian VAT regulations, also
contributed to the revenue decline to the amount of EUR 2.7m.
Internal sales were down 8.2% due to the increase in direct
collection of letters and parcels from customers.

Revenue by division

EUR m Q1 Q1 Change
2009 2010 % EURm
Total revenue
(external sales) 595.2 585.6 -1.6% -9.5
Mail 353.0 348.2 -1.4% -4.8
Parcel & Logistics 190.9 195.9 2.6% 5.0
Branch Network 50.7 40.9 -19.2% -9.8
Other 1.8 1.3 -24.2% -0.4
Consolidation -1.1 -0.7 37.9% 0.4
Working days in Austria 62 62 --- ---
(Calendar)

Income Statement
EUR m Q1 Q1 Change
2009 2010 % EURm
Revenue 595.2 585.6 -1.6% -9.5
EBITDA 72.2 68.3 -5.4% -3.9
EBIT 47.8 45.3 -5.1% -2.4
Profit for the period 33.7 33.4 -0.8% -0.3
Earnings per share (EUR) 0.50 0.49 -0.8% ---

Efficiency enhancement measures continue to be the top priority of
Austrian Post as a means of counteracting the EUR 9.5m decrease in
revenue. A series of measures were already initiated in 2009, which
are contributing to a sustainable improvement in the Company´s cost
structure.

Staff costs comprise the largest operating cost item of Austrian
Post, accounting for close to 50% of total revenue. In the first
three months of 2010, total staff costs were reduced by 0.7% to EUR
287.8m. A major contribution to this reduction was made by employee
redundancies. The total workforce decreased by 912 employees, in
year-on-year comparison, to 25,100 people.

Direct personnel expenditures were reduced by about EUR 10m. Austrian
Post had to increase the allocation of staff-related provisions by
EUR 7.1m for employees transferring to the Austrian federal
government and for those who accepted a voluntary social plan putting
them on temporary leave until they reach retirement age.

Savings in operating costs were realised in the cost of raw
materials, consumables and services used as well as other operating
expenses. On balance, these net cost reductions in the first three
months of 2010 amounted to EUR 7.0m compared to the preceding year.
The changed reporting of prepaid phone cards in the financial
statements resulted in a reduction of EUR 2.7m in revenues. Further
savings were achieved in the cost of retail products sold by the
branch network and energy, fuel and heating costs, along with reduced
consulting and communications expenditures.

Other operating income rose slightly to EUR 17.7m during the period
under review, including income from rents and leases totalling EUR
5.8m.

In the first quarter of 2010, earnings before interest and tax (EBIT)
of Austrian Post were down 5.1% or EUR 2.4m, totalling EUR 45.3m. The
decline is the result of the reduced revenue, although mitigated
somewhat by the above- mentioned cost savings.

This year-over-year decline can be attributed to a positive one-off
effect in the comparable period of the previous year. In the first
quarter of 2009, proceeds derived from the sale of a 49.8% stake in
Mader Zeitschriftenverlags GmbH totalled EUR 4.4m.

The Mail Division generated an EBIT of EUR 64.9m in the first quarter
of 2010 (increase of EUR 1.7m versus Q1 2009), whereas EBIT at the
Parcel & Logistics Division amounted to EUR 4.1m (increase of EUR
3.4m), and the Branch Network Division posted an EBIT of minus EUR
2.1m (decrease of EUR 2.3m). EBIT also fell in the Other segment,
which encompasses, amongst other items, non- allocated costs for
central departments, expenses in connection with unused properties
and for the employee social plan as well as the change in staff-
related provisions.

The provisions allocated for employees who accepted the voluntary
social plan rose by EUR 3.6m. The provision for employee
under-utilisation was increased by EUR 3.5m for employees
transferring to the Austrian federal government. EBIT of the Other
segment was down by EUR 5.3m year-on-year to minus EUR 21.5m.

The financial result of Austrian Post declined to minus EUR 1.9m in
the first three months of 2010, which is related, amongst other
factors, to lower interest rates.

Accordingly, earnings before tax fell by EUR 5.1m to EUR 43.4m. After
deducting income taxes totalling EUR 9.9m, the Group net profit
(profit after tax for the period) amounted to EUR 33.4m,
corresponding to earnings of EUR 0.49 per share for the first quarter
of the 2010 financial year, compared to EUR 0.50 per share in the
first quarter of 2009.

Solid balance structure Austrian Post pursues a risk-averse business
approach. This is demonstrated by the high equity ratio, the
relatively low level of financial liabilities and the high amount of
cash and cash equivalents.

On balance, Austrian Post has a considerable amount of current and
non-current financial resources on the assets side. Austrian Post had
cash and cash equivalents of EUR 321.5m as at March 31, 2010, and
financial assets and financial investments in securities amounting to
EUR 98.9m. Total liquid financial resources at the disposal of
Austrian Post amounted to EUR 350,5m, as opposed to financial
liabilities of only EUR 125.6m. The equity ratio increased to 39.5%.

Cash flow Operating cash flow before changes in working capital
amounted to EUR 50.8m in the first quarter of 2010, a drop of EUR
6.5m from 2009. This decline is primarily due to the year-on-year
increase in income taxes paid. The cash flow before taxes at EUR
66.9m was at the same level as in the previous year.

The cash flow from changes in working capital amounted to minus EUR
12.0m in the first quarter of 2010, primarily as the result of a
lower level of liabilities. On balance, the cash flow from operating
activities in the first quarter of 2010 totalled EUR 38.8m, compared
to EUR 30.5m in the corresponding period of 2009.

The free cash flow was EUR 30.1m. The free cash flow before the
acquisition or disposal of securities totalled EUR 30.1m and was thus
EUR 7.2m above the previous year´s level.

Employees During the period under review, the average number of
full-time employees at Austrian Post fell by 3.5%, or 912 people, to
25,100. This decline can be primarily attributed to the lower number
of employees working for the Mail and Branch Network Divisions and in
the Other segment.

Most of Austrian Post`s labour force (20,847 full-time equivalent
employees) is employed by the parent company, Österreichische Post
AG. More than 4,000 employees are employed by subsidiaries.

Outlook for 2010 Developments in the first three months of 2010
confirm the original outlook for 2010 as a whole. In 2010, Austrian
Post anticipates an ongoing revenue decline in the Mail Division,
primarily attributable to electronic substitution. A contraction of
between 3% and 5% would seem to be a realistic estimate based on
international experience. In the Parcel & Logistics Division, parcel
revenue is expected to improve in the course of the year, according
to current economic forecasts. On the basis of these assumptions,
Austrian Post continues to predict a Group revenue decrease of
between 1% and 2% in 2010 below the comparable level of 2009.

However, a series of strategic targets and operational measures have
been defined in order to take advantage of growth opportunities to
drive sales and realise cost savings. The goal is to sustainably
reduce overall costs, maintain the high level of profitability and
achieve a continued EBITDA margin of 10-12% annually, also in 2010.

Performance of divisions Mail Division External sales of the Mail
Division fell 1.4% in the first quarter of 2010 from the comparable
period of 2009, to EUR 348.2m. This development is mainly related to
the ongoing substitution of letters by electronic media. This
downward trend was counteracted by positive one-off effects in the
first quarter of 2010, such as municipal council elections in four
federal provinces, Austrian Federal Economic Chamber elections and a
referendum held in Vienna, as well as the seasonal increase in the
number of passports being mailed.

Revenue generated by the Letter Mail Business Area in the current
financial year was down by 3.5%, or EUR 6.7m. The unfavourable
cyclical situation has led many companies to implement cost saving
measures. Accordingly, the trend towards the substitution of letters
by electronic media is continuing, for example in the customer
segments of financial services and telecommunications. A decline was
also evident in the public sector, which cut back on the number of
registered letters it posted. In contrast, numerous elections with
the option of casting absentee ballots had positive one-off effects
on first- quarter mail volumes.

In the first quarter of 2010, the revenue achieved by the Infomail
Business Area (addressed and unaddressed direct mail items) rose by
1.3%, or EUR 1.7m, compared to the low prior-year level. This can be
attributed to the good volume development on the part of many direct
mail customers in Austria as well as at Austrian Post´s international
subsidiaries.

Revenue of the Media Post Business Area increased by 0.7%, to EUR
33.6m, based on the growing business volume generated by company
magazines.

On balance, the Mail Division posted an EBIT of EUR 64.9m, a rise of
2.7%, or EUR 1.7m, from the comparable period of the previous year.
This improvement in earnings is primarily related to efficiency
increases enabling a reduction in operating expenses and staff costs.

Parcel & Logistics Division In the first quarter of 2010, external
sales of the Parcel & Logistics Division climbed by 2.6%, to EUR
195.9m as a consequence of the positive volume development. The
parcel and logistics market showed an overall trend towards volume
growth in the first three months of 2010, although price pressure
continued.

The premium parcel product segment (parcel delivery within 24 hours)
generated total revenue of EUR 153.2m in the first quarter. The
revenue decline by 4%, or EUR 6.4m, is primarily due to the
termination of loss-making transport logistics operations in Germany
(revenue of about EUR 10m in Q1 2009) in the meantime. Adjusted
revenue in this German product segment actually rose 7% year-
on-year. The subsidiary trans-o-flex in Germany accounts for 74% of
premium parcel revenue, followed by the Netherlands and Belgium with
a share of 7%. Austria (10% share of premium parcel revenue) and
South East and Eastern Europe (9% share of premium parcel revenue)
also registered a positive volume development.

Revenue of the standard parcels segment in Austria developed more
gratifyingly, rising by around 30%, to EUR 40.2m. The main reasons
for this positive development were organic growth, the increase in
mail order business since June 2009 as well as migration of parcel
volumes from the premium to the standard segment.

EBIT of the Parcel & Logistics Division in the first quarter of 2010
amounted to EUR 4.1m, an increase of EUR 3.4m from the comparable
level of the previous year. These results can be attributed to the
revenue increase combined with improved cost efficiency. Subsidiaries
also generated a positive earnings contribution.

Branch Network Division The organisation of the Branch Network
Division is undergoing change, with respect to both revenue and the
cost structure. Revenue declined by EUR 9.8m, whereas total operating
expenses were reduced by EUR 11.7m. Part of the decline, EUR 2.7m, is
due to the changed reporting of revenue from prepaid phone cards as
the result of new Austrian VAT regulations. During the 2009 financial
year, the nominal value of prepaid phone cards was still recognised
as revenue, whereas the related costs of the goods sold were reported
as raw materials, consumables and services used. Since January 1,
2010, only the commission derived from prepaid phone card sales is
recognised. Moreover, sales of retail products declined in the first
quarter. In particular, telecommunications products in the field of
mobile telephony are subject to increasing market saturation.
Financial services and the related commissions earned also showed a
downward trend, which is attributable to reduced margins and the
current low interest rate environment.

Internal sales decreased further by 8.2%. There has been a
fundamental reduction in the volume of letters and parcels posted and
subsequently transported by the branch network. Moreover, letters are
increasingly being collected directly from customers. The service
level and cost structure of the branch network are being continually
improved. Unprofitable company-operated branches in Austria are being
converted by Austrian Post into partner-operated postal service
points.

Following long delays linked to procedural regulations in
implementing the new Postal Market Act, public authorities formally
approved the conversion of a further 59 post offices as at the end of
April 2010. The conversion of an additional 123 company-operated
branches is in progress.

EBIT of the Branch Network Division amounted to minus EUR 2.1m in the
first quarter of 2010, down from minus EUR 0.2m in the comparable
period of 2009. The planned structural improvement programme and the
related savings will be realised in future.

Vienna, May 20, 2010

The interim report Q1 2010 is available in the internet:
www.post.at/ir/en -> Publications --> Financial Reports

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

Head of Investor Relations

Mr. Harald Hagenauer

Tel.: +43 (0) 57767 - 30400

Head of Group Communications

Ms. Ina Sabitzer

Tel.: +43 (0) 57767 - 21763

ina.sabitzer@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 / Regulated free trade