EANS-Adhoc: Österreichische Post AG / AUSTRIAN POST Q1-3 2010: GOOD QUARTERLY AND NINE-MONTH RESULTS EBIT AND CASH FLOW SURPASS PRIOR-YEAR LEVEL

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6-month report

17.11.2010

- Good results in Q3 - Revenue down 0.7% from the previous year -
EBIT up 10.9% - Q1-3 at prior-year level - Revenue only decreased
slightly by minus 0.6% - EBIT rises 1.2% to EUR 94.8m - Improved
cash flow, solid financial position - Operating cash flow before
changes in working capital and tax improves by 12.1% to EUR 164.8m
- Balance sheet boasts a high level of cash and cash equivalents at
EUR 266.5m - Outlook: Stable development - EBIT 2010 expected at
last year´s level - Medium-term EBITDA margin target between 10%
and 12% confirmed

AUSTRIAN POST AT A GLANCE The first nine months of the 2010 financial
year developed very satisfactorily for Austrian Post. On balance,
Group revenue declined during this period. However, the actual
decline of minus 0.6% turned out to be very moderate. Growth in the
Parcel & Logistics Division could almost completely compensate for
the revenue drop in the other segments. Moreover, Austrian Post
succeeded in counteracting the downward trend on the basis of
efficiency-enhancing measures as well as reductions in operating
costs and direct personnel expenditures. In the first three quarters
of 2010, earnings before interest and tax (EBIT) of Austrian Post
rose 1.2% from the prior-year level, and even climbed by 10.9% in the
third quarter in a year-on-year comparison. The financial situation
of the Group is extremely stable. The cash and cash equivalents at
the disposal of Austrian Post totaled EUR 266.5m at the end of
September 2010, whereas the operating cash flow before changes in
working capital and tax increased by 12.1% to EUR 164.8m.

In the Mail Division, the trend towards the electronic substitution
of letters and the reduced weight of mail items posted by customers
is continuing. However, intensive efforts to attract new customers as
well as positive one-off effects managed to limit the revenue
decrease to 0.6%. An important further development and value
enhancement of the service portfolio is the planned joint venture
between Austrian Post and Swiss Post. The two companies will combine
their activities in the conception and printing of addressed
advertising mail within the framework of a joint venture. This new
cooperative venture offers customers one-stop-shop services, and
enables the two partners to exploit potential synergies on the basis
of product specialisation at the individual locations.

The Parcel & Logistics Divisions posted revenue growth in all regions
and an overall increase of 3.8% in the first three quarters of 2010.
Growth in the core business was even higher in the light of the fact
that unprofitable transport logistics operations were terminated in
Germany at the end of last year. Successes were achieved with the
international cooperation strategy, with two new partners in England
and France now expanding the EURODIS parcel network.

The Branch Network Division is undergoing constant change.
Unprofitable company- operated branches are continually being
converted to postal partner offices. In the meantime, Austrian Post
has opened its 1000th postal partner office, and the total number of
postal service points in Austria has risen to 1,866 in Austria. An
important step to further develop the branch network was taken with
the extension and intensification of the cooperation with the partner
bank BAWAG P.S.K. In the future, the full range of postal and banking
products and services offered by BAWAG P.S.K. and Austrian Post will
be available at more than 500 locations throughout Austria.

In order to effectively counteract the structural changes taking
place in the postal business, Austrian Post will continue to take all
the measures it considers necessary to enhance the efficiency and
productivity of the company. "Against the backdrop of the upcoming
full-scale liberalisation of the Austrian letter mail market as of
January 1, 2011, we are confident that we are moving in the right
direction. The top priority is to offer efficient and innovative
services in line with market requirements," says CEO Georg Pölzl. The
aim is to maintain an outstanding level of service, and to ensure an
earnings situation featuring the targeted EBITDA margin of between
10% and 12% annually.

REVENUE DEVELOPMENT IN DETAIL

Revenue by division

EURm Q1-3 Q1-3 Change Q3 Q3
2009 2010 % EURm 2009 2010
Total revenue 1,723.2 1,713.2 -0.6% -10.0 567.3 563.1
(external sales)
Mail 1,018.7 1,011.2 -0.7% -7.5 330.3 329.1
Parcel & Logistics 561.5 582.9 +3.8% +21.3 190.4 195.8
Branch Network 141.2 117.6 -16.7% -23.5 46.0 37.7
Other 3.2 3.7 +15.5% +0.5 1.1 1.2
Consolidation -1.4 -2.3 -61.2% -0.9 -0.5 -0.7
Working days in Austria 188 189 --- --- 66 66
(Calendar)

The revenue development of Austrian Post in the first three quarters
of 2010 confirmed the forecasted trends. However, the revenue decline
of 0.6% turned out to be very moderate. The business development of
Austrian Post in the third quarter of 2010 was also in line with the
overall trend, with revenue down by 0.7%.

During the first nine months of 2010, revenue of the Mail Division
fell 0.7% in a year-on-year comparison (Q3 2010: minus 0.4%), which
can be attributed to the gains achieved by the Infomail and Media
Post Business Areas. The trend towards the electronic substitution of
letters is continuing. However, the revenue decrease was limited due
to intensive efforts designed to attract new customers, positive
one-off effects related to elections and an additional working day in
the second quarter in comparison to the prior-year period.

The Parcel & Logistics Division featured an ongoing rise in business
volume. Although the price situation remains tense, the division
profited from good volume development as well as an increase in new
customers. Despite the termination of unprofitable transport
logistics operations in Germany, revenue in the first three quarters
of 2010 rose 3.8% year-on-year and 2.9% in the third quarter compared
to the prior-year level.

The revenue and organisational structure of the Branch Network
Division is undergoing change. External sales decreased by EUR 23.5m,
whereas total costs were reduced by EUR 26.1m. The changed reporting
of revenue derived from sales of prepaid phone cards based on the new
Austrian VAT regulations contributed EUR 8.1m to the revenue decline.

Income Statement

EUR m Q1-3 Q1-3 Change Q3 Q3
2009 2010 % EURm 2009 2010
Revenue 1,723.2 1,713.2 -0.6% -10.0 567.3 563.1
EBITDA 168.9 168.9 0.0% 0.0 42.3 44.1
EBIT 93.7 94.8 +1.2% +1.1 18.3 20.3
Profit for the period 67.4 68.1 +1.0% +0.7 11.2 14.0
Earnings per share (EUR) 1.00 1.01 +1.0% +0.01 0.17 0.21

It is essential for Austrian Post to continually improve productivity
and efficiency in order to counteract the revenue decline of EUR 10m.
Staff costs, which comprise the largest operating expense item of
Austrian Post at EUR 839.2m, remained constant in a year-on-year
comparison.

In addition to direct personnel expenditures for salaries and wages,
staff costs also encompass changes in staff-related provisions as
well as restructuring costs in line with the voluntary social plan
for employees leaving the company. Direct personnel expenditures were
reduced by about EUR 20m compared to the first three quarters of
2009. On average, the total workforce decreased by 938 employees
year-on-year to 25,161 people. The diverse costs related to employee
social plan payments amounted to approximately EUR 30m. Provisions
had to be increased as a result of the currently low discount rate.

Operating costs were reduced by EUR 10.8m in the first three quarters
of 2010. Retail products encompassed in the item raw materials,
consumables and services used declined by EUR 8.1m, in part due to
the changed reporting of prepaid phone cards.

In the first nine months of 2010, earnings before interest and tax
(EBIT) of Austrian Post rose by 1.2% or EUR 1.1m from the prior-year
level. This is related to the fact that the revenue drop was
compensated by cost savings. Third-quarter 2010 EBIT even improved by
EUR 2.0m to EUR 20.3m.

There was a change in the reporting of termination benefits relating
to the voluntary social plan for employees. Since the beginning of
2010, these expenses have been assigned to the particular division in
which they arise, whereas termination benefits had been previously
recognised in the "Other" segment. Division earnings excluding
employee social plan payments changed as follows: The Mail Division
generated an EBIT increase of EUR 6.1m to EUR 170.5m in the first
three quarters of 2010. EBIT of the Parcel & Logistics Division rose
by EUR 15.6m to EUR 9.3m, whereas EBIT at the Branch Network Division
amounted to minus EUR 14.8m, a decline of EUR 8.0m. On balance,
employee social plan payments at Austrian Post totalled EUR 10.2m, of
which the largest share or EUR 6.3m was allocated to the Branch
Network Division.

EBIT of the Other segment excluding employee social plan payments
fell from minus EUR 50.5m to minus EUR 59.9m. The earnings decline is
primarily due to changes in provisions. The currently low interest
rate through reduced discount factor requires a higher allocation of
provisions.

Total Group earnings before tax fell by EUR 2.6m to EUR 88.7m in the
first three quarters of 2010. After deducting income taxes totalling
EUR 20.6m, the Group net profit (profit after tax for the period)
amounted to EUR 68.1m, corresponding to earnings of EUR 1.01 per
share for the first nine months of the 2010 financial year. This was
in comparison to earnings of EUR 1.00 per share in the prior-year
period.

SOLID BALANCE SHEET WITH HIGH CASH AND CASH EQUIVALENTS Austrian Post
takes a risk-averse business approach. This is demonstrated by its
high equity ratio, the low level of financial liabilities and the
high amount of cash and cash equivalents. All in all, Austrian Post
boasts a considerable amount of current and non-current financial
resources. Austrian Post had cash and cash equivalents of EUR 266.5m
as at September 30, 2010, and financial investments in securities
amounting to EUR 53.2m. Accordingly, the financial resources at the
disposal of Austrian Post in the first three quarters of 2010
totalled EUR 319.9m at the end of September 2010. As opposed to the
total financial resources of Austrian Post, financial liabilities
only amount to EUR 125.2m.

IMPROVED CASH FLOW In the first nine months of 2010, operating cash
flow before changes in working capital and tax increased by 12.1% or
EUR 17.8m to EUR 164.8m. Diverse tax payments for prior periods
negatively affected the operating cash flow before changes in working
capital, which totalled EUR 115.0m and was thus below the previous
year´s level.

The cash flow from changes in working capital amounted to minus EUR
11.7m in the first three quarters of 2010, partly due to the higher
level of receivables. The cash flow from investing activities at
minus EUR 24.1m includes the purchase of property, plant and
equipment (CAPEX) amounting to EUR 29.0m, and proceeds from the
disposal of property, plant and equipment of EUR 6.5m.

The free cash flow was thus EUR 79.2m, which is therefore higher than
the comparable figure of EUR 77.0m in the previous year.

EMPLOYEES During the period under review, the average number of
full-time employees at Austrian Post fell by 3.6%, or 938 people, to
25,161. 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 (20,902 full-time equivalent
employees) is employed by the parent company, Austrian Post. More
than 4,000 employees work for subsidiaries.

OUTLOOK Austrian Post expects the same trends affecting business
development in the previous quarters to continue in the fourth
quarter and thus for the entire 2010 financial year. Austrian Post
expects total Group revenue in 2010 to decrease by 1% to 2% compared
to 2009, based on declining volumes in the Mail and Branch Network
Divisions accompanied by an increase in business volume in the Parcel
& Logistics Division. The development of operating costs and earnings
is also anticipated to remain constant. In line with the prevailing
tendencies in the first three quarters, the prospect of achieving a
Group EBIT in 2010 at last year´s level seems realistic. The required
capital expenditures (CAPEX) will amount to about EUR 65m in 2010.

On a medium-term basis, the previously described trends and
particularly the electronic substitution of traditional letter mail
are expected to continue. For this reason, Austrian Post will do
everything it can in order to be successful in accordance with its
four core strategies.

Against the backdrop of the upcoming full-scale liberalisation of the
Austrian letter mail market as of January 1, 2011, Austrian Post is
confident that it is headed in the right direction. The top priority
is to offer efficient and innovative services in line with market
requirements. Austrian Post presented two planned changes in its
General Terms and Conditions to the responsible regulatory authority.
On the one hand, the terms and conditions were adapted to reflect
revisions in the Austrian VAT law. For this reason, Austrian Post
will offer both VAT-taxable and VAT-free postal services starting in
January 2011. Furthermore, Austrian Post plans a change in the
product structure of mail items encompassed under the universal
service obligation, which will take effect starting on April 1, 2011.

The aim of the new product structure is to simplify the products and
services offered by Austrian Post, and ensure a market-oriented
offering for business customers. The new model should lead to
size-based rates instead of the current weight-dependent prices. The
priority will be on standard sizes offering customers a simple and
transparent pricing system. In the future, business customers will be
able to decide on the delivery speed, which is common practice around
the world. A "premium" product will ensure letter mail delivery on
the next working day, whereas a more favourably-priced "economy"
product will provide for letter mail delivery within two to three
days. The finalisation and presentation of the new product portfolio
will take place at the beginning of next year.

This new, customer-oriented product portfolio and efficient,
performance- oriented logistics will serve as the basis for Austrian
Post to stand its ground in a fully liberalised competitive
environment. The aim is to maintain an outstanding service level and
ensure an earnings situation featuring the targeted EBITDA margin of
between 10% and 12% annually.

PERFORMANCE OF DIVISIONS MAIL DIVISION External sales of the Mail
Division fell by 0.7% in the first three quarters of 2010 from the
comparable period of 2009 to EUR 1,011.2m. The third quarter decrease
was 0.4%. More intensive customer acquisition efforts combined with
positive one-off effects such as elections in Austria managed to
counteract the volume decline.

In the first three quarters of 2010, revenue generated by the Letter
Mail Business Area declined by 2.6% or EUR 14.2m from the prior-year
period. The trend towards the substitution of letters by electronic
media is continuing, for example in the financial services and
telecommunications customer segments. A decline was also evident in
other areas as well as in the public sector, which cut back on the
number of registered letters it posted.

Revenue achieved by the Infomail Business Area (addressed and
unaddressed direct mail items) in the first nine months of 2010 rose
by 1.2% or EUR 4.5m compared to the previous year´s level. Efforts to
acquire new customers were successful, and thus compensated for the
loss of the large customer Quelle. On balance, the Infomail Business
Area registered a positive volume development albeit with lower
average weights of mail items.

Revenue of the Media Post Business Area increased by 2.3% or EUR 2.2m
due to the growing business volume generated by company magazines and
the effects of regional elections. All in all, the Mail Division
posted an EBIT excluding employee social plan payments of EUR 170.5m
in the first nine months of 2010, a rise of 3.7% from the comparable
period of the previous year. This earnings improvement is primarily
related to efficiency increases, accompanied by a reduction in both
operating expenses and direct personnel expenditures.

PARCEL & LOGISTICS DIVISION In the first three quarters of 2010,
external sales of the Parcel & Logistics Division climbed by 3.8% to
EUR 582.9m as a consequence of the good volume development, whereas
external sales in the third quarter rose by 2.9%. The parcel and
logistics market showed an overall trend towards volume growth
although price pressure continued to be intense. The premium parcel
product segment (parcel delivery within 24 hours) generated total
revenue of EUR 460.7m in the first nine months of 2010. This
corresponds to a 0.3% rise in revenue, which was negatively affected
by the termination of loss-making transport logistics operations in
Germany. The adjusted revenue in this product segment in the German
market actually shows a volume increase of about 7% year-on-year,
which is mainly related to new customer acquisition. The subsidiary
trans-o-flex in Germany accounted for approximately three quarters of
premium parcel revenue. The business parcel segment in Austria as
well as in South East and Eastern Europe also continued to develop
very positively.

The standard parcels segment in Austria posted an even higher growth
rate, rising by 20% to EUR 114.2m. The main reasons for this positive
development were organic growth, the increased mail order business
since June 2009 as well as parcel volumes shifted from the premium to
the standard segment.

There was a clear turnaround in the performance of the Parcel &
Logistics Division. In the first three quarters of 2010, EBIT
excluding employee social plan payments rose to EUR 9.3m, up EUR
15.6m from the previous year.

BRANCH NETWORK DIVISION The organisation of the branch network is
undergoing change, which impacts revenue development as well as the
cost structure. External sales of the Branch Network Division fell by
EUR 23.5m in the first nine months of 2010, whereas total costs were
reduced by EUR 26.1m.

Part of the revenue decline, or EUR 8.1m, is related to the changed
reporting of revenue from prepaid calling cards as the result of new
Austrian VAT regulations. During the 2009 financial year, the nominal
value of prepaid calling 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 calling card sales is recognised.
Moreover, sales of retail products declined in the first three
quarters of 2010. In particular, telecommunications products in the
field of mobile telephony are subject to market saturation.

Financial services and the related commissions earned also showed a
downward trend, which is attributable to reduced margins and the
related low interest rate environment at the present time.

Internal sales with postal services also further decreased, dropping
by 7.5%. There has been a fundamental reduction in the volume of
letters posted and subsequently transported by the branch network.
Moreover, letters are increasingly being picked up directly from
customers within the context of the enhanced services offered by
Austrian Post.

The service and cost structure of the branch network is being
continually improved as a result of the structural change taking
place in the Branch Network Division. Unprofitable company-operated
branches in Austria are being converted by Austrian Post into post
partners. Austrian Post had a total of 1,866 postal service points at
the beginning of November 2010, of which more than 50% were operated
by external partners. Plans call for converting additional
unprofitable company-operated branches to postal partner offices.

EBIT of the Branch Network Division excluding employee social plan
payments amounted to minus EUR 14.8m in the first three quarters of
2010, down from minus EUR 6.7m in the comparable period of 2009. The
workforce of the Branch Network Division was reduced by 439 employees
compared to the prior-year period. The resulting employee social plan
payments amounted to EUR 6.3m.

Vienna, November 17, 2010

The interim report Q1-3 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 Group Communications

Mag. Ina Sabitzer

Tel.: +43 577677 21763

ina.sabitzer@post.at

Group Communications Press Spokesman

Michael Homola

Tel.: +43 57767 32010

michael.homola@post.at

Head of Investor Relations

DI Harald Hagenauer

Tel.: +43 57767 30400

harald.hagenauer@post.at

Branche: Transport
ISIN: AT0000APOST4
WKN: A0JML5
Index: ATX Prime, ATX
Börsen: Wien / Regulated free trade