euro adhoc: Österreichische Post AG / Annual Reports / Austrian Post 2006 Annual Results: Increase in Revenue and Earnings

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annual report

14.03.2007

- Revenue up 2.1%: improvement in all divisions - Earnings before
interest and tax (EBIT): +19.7%; earnings before tax: +29.3% -
Dividend proposal: EUR 70m (+75% year-on-year) - Profit for the
period: EUR 1.43 per share - Outlook for 2007: higher revenue based
on consolidation of trans-o-flex, 20% to 25% rise in EBIT expected

2006 was a very successful year for Austrian Post. In addition to the
gratifying business development, the main highlights included the
IPO, which the Post very successfully concluded as only the third
publicly listed postal operator in Europe, and most recently, the
successful acquisition of a majority shareholding in the German
specialised logistics company trans-o-flex, a milestone in Austrian
Post’s business-to-business parcels services.

Improved revenue in all divisions The positive trend in the business
development of Austrian Post in recent years was maintained in the
2006 financial year. Once again, the company achieved an improvement
in terms of both revenue and EBIT. Thanks to growth generated in all
divisions, total revenue rose by 2.1%, to EUR 1,736.7m. Revenue in
the Mail Division was up 1.6%, the Parcel & Logistics Division
improved by 7.2%, and Branch Network Division revenue climbed 0.3%.

The Mail Division posted an increase in revenue in its direct mail
business (advertising), as well as in the Media Post Business Area.
The biggest increase, in relative terms, was generated by the Parcel
& Logistics Division, with very solid revenue growth in international
parcels deliveries. The Branch Network Division also posted a slight
rise in revenue.

Revenue Change Contri-
EUR m 2004 2005 2006 2005/2006 bution
2006
Total revenue 1,654.4 1,701.6 1,736.7 +2.1% 100.0%
Mail 1,255.3 1,290.8 1,311.3 +1.6% 75.5%
Parcel&Logistic 199.0 211.8 227.1 +7.2% 13.1%
Branch Network 196.2 193.8 194.4 +0.3% 11.2%
Other 3.9 5.1 4.0 -22.5% 0.2%
Earnings significantly surpass last year results
The EBIT (earnings before interest and tax) of Austrian Post increased by 19.7%
in 2006, climbing to EUR 123.3m in comparison to the preceding year.
Accordingly, the EBIT margin amounted to 7.1%. All operative divisions made a
positive contribution to this performance. The Mail Division achieved an EBIT of
EUR 271.6m, the Parcel & Logistics Division contributed EUR 20.8m, and the
Branch Network Division generated an EBIT of EUR 11.5m.
Earnings before tax (EBT) rose by 29.3% year-on-year, to EUR 130.5m. After
deducting the income tax expense amounting to EUR 30.8m, the consolidated profit
for the period of Austrian Post totalled EUR 99.8m, or an earning per share
amounting to EUR 1.43.
Earnings Change
EUR m 2004 2005 2006 2005/2006
Revenue 1,654.4 1,701.6 1,736.7 +2.1%
EBITDA 203.1 223.8 231.7 +3.5%
EBIT 82.2 103.0 123.3 +19.7%
EBT 76.7 100.9 130.5 +29.3%
Profit after tax 46.8 90.1 99.8 +10.7%
Profit fort he period 50.0 99.9* 99.8 -0.2%
* Including EUR 9.8m from discontinuing operations
Solid balance sheet structure - equity ratio of 43%
The acquisition of trans-o-flex led to an increase in total assets amounting to
EUR 358.5m. The item-by-item balance sheet analysis for Austrian Post shows a
considerable amount of financial resources on the assets side. Austrian Post has
cash and cash equivalents totalling EUR 229.4m, and financial assets of EUR
208.6m. The equity ratio amounted to 43.2% at the end of 2006.
Stable cash flow development
In 2006, operating cash flow before changes in working capital fell by 1.8%, to
EUR 277.9m, despite the rise in earnings before tax. This can be mainly
attributed to advanced tax payments.
The generated cash flow was primarily used for investments in property, plant
and equipment, the acquisition of subsidiaries and dividend payments. After
deducting these items, the net increase in cash and cash equivalents amounted to
EUR 55.0m in 2006.
Dividend increase
Due to the positive business development, the Management Board of Austrian Post
will propose to the Annual General Meeting a dividend payment of EUR 1.00 per
share will be distributed for 2006. This equals a total dividend of EUR 70m, up
75% compared to the dividend of EUR 40m paid for 2005.
Employees
In 2006, the average number of full-time employees at Austrian Post declined by
2.9%, to 24,456, from a total of 25,192 employees in the preceding year.
Outlook for 2007
Austrian Post continues to expect a stable mail market for the year 2007. The
decline in letter mail volumes resulting from the substitution of the
traditional letter by electronic media will be counteracted by expected
increases in direct mail (Infomail Business Area) and in the Parcel & Logistics
segment (including acquisitions). Generally, increased competition is
anticipated in the letter mail as well as in the parcels business (in particular
business to consumer parcels).
All in all, Austrian Post anticipates that organic revenue will remain constant
in 2007. Additional growth will be driven by the German specialised logistics
company trans-o-flex, which will be incorporated into the consolidated profit
and loss statement of Austrian Post for the first time in 2007. Earnings before
interest and taxes (EBIT) are predicted to be 20% to 25% higher in 2007 than the
level of EUR 123,3m posted in 2006. There are two main reasons for this expected
increase: first, the contribution to revenue and earnings to be made by
trans-o-flex, and second, a further improvement in operating income.
Events after the balance sheet date
With the formal closing of the transaction on January 2, 2007, Austrian Post
legally acquired its 100% shareholding in Weber Escal, Croatia.

At the end of January 2007, Austrian Post also finalised the
acquisition of a 51% shareholding in Scanpoint Europe, which
specialises in the efficient digitalisation and administration of
documents (bills, correspondence).

Change of ownership at BAWAG P.S.K. Concerning the takeover of BAWAG
P.S.K,Austrian Post‘s financial services partner, the bidding group
led by Cerberus invited Austrian Post to acquire a minority stake in
BAWAG P.S.K. Austrian Post sees this as a chance to make a profitable
and value-enhancing investment, and, at the same time, to proactively
promote a jointly developed offensive business strategy in the field
of financial services. Therefore, the offer is being carefully
evaluated. Parallel to this, Austrian Post will hold negotiations
with the new owner and management of BAWAG P.S.K., in order to
intensify its existing cooperation and ensure its ongoing success on
a long-term basis.

Increased competition in the parcels segment Austrian Post is the
undisputed market leader in the B2C and C2C private customer
segments, with a market share of 95%. According to unconfirmed press
reports, the German parcel services provider Hermes plans to enter
the Austrian market. The owner of Hermes is the mail order company
Otto. As part of the Unito Group (Otto, Universal), it is a major
customer of Austrian Post.

The market entry of new postal operators in the private customer
segment will only have a slight impact on the earnings development of
Austrian Post in 2007, due to the high qualitative market demands,
and the high complexity of building up a logistics network.

On a medium-term basis, Austrian Post anticipates a loss of revenue
and the necessity to implement price reductions for existing
customers as the result of increasing competition from alternative
postal services providers. The possibility can not be ruled out that
growing competition might potentially lead to a medium-term decline
in Austrian Post’s parcel services revenue amounting to EUR 20m to
25m.

In 2006, Austrian Post successfully entered the market for parcel
services on behalf of business customers, the B2B business-to-
business segment, and has already managed to attract several renowned
customers for its expanded service portfolio. Moreover, the German
specialised logistics company trans-o-flex, with revenue of about EUR
480m, was acquired at the end of 2006.

end of announcement euro adhoc 14.03.2007 07:16:09
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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(1)515 51-30401
mailto:harald.hagenauer@post.at

Public Relations:
Michael Homola
Tel.: +43(1)515 51-32010
mailto:michael.homola@post.at

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