EANS-Adhoc: AUSTRIAN POST IN H1 2011 / GOOD DEVELOPMENT IN THE FIRST HALF-YEAR UNDERLINES POSITIVE OUTLOOK

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6-month report

19.08.2011

- Increased revenue - Revenue up 2.9% from the previous year on a
comparable basis - Mail Division on a comparable basis +2.1%,
Parcel & Logistics +6.2% - Improved earnings - EBITDA of EUR 124.8m
(margin of 11.0%) - EBIT +9.1% to EUR 81.3m - Ongoing solid cash
flow and balance sheet - Operating cash flow before changes in
working capital up 15.5% to EUR 93.3m - Cash and cash equivalents
of EUR 264.2m - Outlook for 2011 - Revenue in 2011: continuation of
the development in the first half-year (+2.9%) - EBITDA margin at
the upper end of the targeted range of 10-12%

AN OVERVIEW OF DEVELOPMENTS AT AUSTRIAN POST "The first half of 2011
proceeded very satisfactorily for Austrian Post. We are on the right
track, pursuing our strategy of offsetting declining letter mail
volumes by generating growth in the parcel business and advertising
mail", comments CEO Georg Pölzl. "In the mail and parcel segments we
succeeded in maintaining our market leadership position and
continuing our development in other markets." Against this backdrop,
total revenue of the Austrian Post Group rose by 2.9% to EUR 1,137.9m
on a comparable basis, adjusted for the meiller companies which were
deconsolidated at the end of 2010. The Parcel & Logistics Division
posted the biggest increase of 6.2%, followed by the Mail Division,
whose revenue rose by 2.1%. This was in contrast to the revenue
decrease of 6.2% in the Branch Network Division. The persistent focus
on efficiency improvements and enhancing the flexibility of the cost
structure showed positive effects in the first half of 2011. As a
consequence, EBIT of Austrian Post climbed 9.1% to EUR 81.3m, with
all operating divisions generating positive earnings growth. EBIT of
the Mail Division was up 10.2%, the Parcel & Logistics Division
reported a 69.3% rise and the Branch Network Division an increase of
33.7%, the latter not least due to effective restructuring measures.
Of the 1,876 postal service points, a total of 1,212 are already
third-party operated postal partner offices, a rise of 456 in the
past year. On the basis of this development, a continuation of the
revenue increase is expected, as shown by the 2.9% revenue growth
achieved in the first half-year. With respect to the development of
earnings, Austrian Post confirms its objective of generating a
sustainable EBITDA margin between 10% and 12%. The EBITDA margin for
the entire year 2011 is expected to be at the upper end of the
targeted range. "The basis of our operations is our consistent
customer orientation, to which we attach considerable importance to
in all our decision-making processes. Innovative products and
services with self-service features are significant factors
underlying our business operations", says Pölzl. "Our current
Austria- wide initiative `CO2 neutral delivery´ is also in line with
this approach to pro-actively support each of our customers demanding
ecologically sustainable logistics services. Thus, key cornerstones
of Austrian Post´s corporate strategy are the efficiency improvements
and adjustments carried out as a response to the continuing changes
in the market environment", Pölzl adds.

REVENUE DEVELOPMENT OF THE DIVISIONS*

EUR m H1 H1 Change Q2 Q2
2010 2011 % EUR m 2010 2011
Total revenue** 1,106.0 1,137.9 2.9% 31.9 543.5 566.5
Mail** 637.9 651.5 2.1% 13.5 312.9 327.3
Parcel & Logistics 387.0 410.9 6.2% 23.9 191.1 202.4
Branch Network 80.0 75.0 -6.2% -4.9 39.1 36.6
Corporate 2.6 2.5 -1.6% 0.0 1.2 1.3
Consolidation -1.5 -2.1 -34.5% -0.5 -0.8 -1.1
Working days*** 123 124 - - 61 61

* External sales of the divisions
** Figures for 2010 and changes excl. meiller Group (pro forma consolidation);
2011: joint venture MEILLERGHP consolidated at equity
*** Calendar working days in Austria

In order to enable a consistent analysis of Austrian Post´s revenue
development, revenue in 2010 has been adjusted for the meiller companies. The
deconsolidation of these companies reduced the comparable revenue of the Mail
Division by EUR 44.2m in the first half-year 2010. The joint venture MEILLERGHP
established at the end of 2010, in which Austrian Post has a 65% stake, is not
fully consolidated in 2011, but consolidated at equity instead.
Revenue on a comparable basis increased by 2.9% in the first half of 2011 to
EUR 1,137.9m. Revenue growth was generated in the Parcel & Logistics Division
(+6.2%) and the Mail Division (+2.1%). In contrast, revenue of the Branch
Network Division fell by 6.2% compared to 2010. The year-on-year comparison
includes one additional working day in H1 2011.
Revenue in the Mail Division was up by 2.1% on a comparable basis to EUR
651.5m. The substitution of letters by electronic media was offset by positive
effects such as changes in the letter mail portfolio, self-service products and
advance purchases of the new line of postage stamps. Moreover, the revenue
increase for addressed and unaddressed direct mail items clearly shows the good
economic development of the advertising industry.
Revenue of the Parcel & Logistics Division climbed by 6.2% to EUR 410.9m in the
first half of 2011 due to rising parcel volumes and against the backdrop of
ongoing price pressure. Growth was generated in Austria as well as in Germany,

Benelux and South East and Eastern Europe. The organisational
structure of the Branch Network Division is currently undergoing
change. In the last 12 months the number of third-party operated
postal partner offices has risen from 756 to 1,212. This change has
affected the division´s revenue and cost structure as well as the
redefined partnership with BAWAG P.S.K.. Since January 1, 2011,
revenue from the financial services business has been subject to a
new cost-based compensation plan. The division´s external sales were
down 6.2% to EUR 75.0m.

INCOME STATEMENT

EUR m H1 H1 Change Q2 Q2
2010 2011 % EUR m 2010 2011
Revenue* 1,106.0 1,137.9 2.9% 31.9 543.5 566.5
EBITDA 124.8 124.8 0.0% 0.0 56.4 53.9
EBIT 74.5 81.3 9.1% 6.8 29.2 32.5
Profit for the period 54.1 62.0 14.7% 7.9 20.6 24.6
Earnings per share (EUR) 0.80 0.92 14.7% 0.12 0.31 0.36

* Figures for 2010 and changes excl. meiller Group (pro forma
consolidation); 2011: joint venture MEILLERGHP consolidated at equity

The revenue growth of 2.9% or EUR 31.9m also affects the cost
structure of the Group, due to the fact that higher parcel volumes
also led to an increase in expenses for parcel logistics
subcontractors. As a consequence of the increased purchase of
external transport services, operating expenses for raw materials,
consumables and services used rose 7.2% on a comparable basis to EUR
360.8m. Staff costs on a comparable basis declined by EUR 6.1m from
the prior-year figure. This decrease includes a reduction of
operational staff costs by EUR 15.2m, whereas non-operational staff
costs rose. Savings in operational staff costs were also achieved by
taking advantage of voluntary employee departures. On a comparable
basis, the average number of employees fell by 786 to 23,250
employees. Non-operational staff costs, for example restructuring
expenses and the provision for employee under-utilisation, increased
in the first half-year 2011. Accordingly, a total of EUR 15.6m was
allocated to the provision for employee under-utilisation for an
additional 108 employees who are likely to transfer to the federal
public service. Austrian Post already reached an agreement with the
Ministry of Internal Affairs in 2009 as well as with the Ministries
of Finance and Justice in 2010 stipulating that staff costs for these
employees will be borne by Austrian Post until June 2014. On the
balance sheet of Austrian Post, these total staff costs are reported
as a provision. As a consequence, the provision for employee
under-utilisation increased year-on- year from EUR 244.0m to EUR
248.5m. The cash-related use of these provisions in the first half of
2011 amounted to EUR 12.3m. Earnings before interest, tax,
depreciation and amortisation (EBITDA) of Austrian Post amounted to
EUR 124.8m in the first half of 2011, precisely matching the
prior-year level. The EBITDA margin was 11.0%. EBIT rose 9.1% to EUR
81.3m, corresponding to an EBIT margin of 7.1%. All operating
divisions developed positively in the first half of 2011. EBIT of the
Mail Division rose by 10.2% to EUR 130.4m, the Parcel & Logistics
Division reported a 69.3% increase in EBIT to EUR 10.3m, and the
Branch Network Division improved by 33.7% to minus EUR 7.7m. EBIT of
the Corporate segment deteriorated from minus EUR 38.2m to minus EUR
51.7m due to the allocation of EUR 15.6m during the period under
review to provisions for employees who are likely to transfer to the
federal public service. The Corporate segment encompasses, amongst
other items, non-allocated costs for central departments, expenses in
connection with unused properties as well as changes in staff-related
provisions. Due to the current restructuring the negative earnings of
Austrian Post´s 65%- owned subsidiary MEILLERGHP led to results of
investments consolidated at equity of minus EUR 3.0 million. Earnings
before tax rose 12.5% to EUR 79.4m. After deducting income taxes
totalling EUR 17.4m, the Group net profit (profit after tax for the
period) amounted to EUR 62.0m. This corresponds to earnings of EUR
0.92 per share for the first half of 2011, a rise of 14.7% from the
prior-year figure.

BALANCE SHEET Austrian Post takes a risk-averse business approach.
This is demonstrated by its high equity ratio, the low level of
financial liabilities and the solid level of cash and cash
equivalents invested with the least possible risk. The analysis of
the balance sheet of Austrian Post shows a considerable level of
current and non-current financial resources. As at June 30, 2011,
Austrian Post had cash and cash equivalents of EUR 264.2m and
financial investments in securities amounting to EUR 51.6m.

CASH FLOW In the first half of 2011, the operating cash flow before
changes in working capital, at EUR 93.3m, represents a rise of EUR
12.5m from the prior-year level. Taxes paid at EUR 26.0m also include
a tax payment of EUR 7.2m for the 2009 financial year. The cash flow
from changes in working capital declined by EUR 17.2m. The most
significant negative effect was the rise in receivables of EUR 12.0m,
which is mainly related to the new value added tax regulation
applicable since the beginning of 2011. The cash flow from investing
activities was minus EUR 7.5m, including a cash outflow for the
purchase of property, plant and equipment (CAPEX) amounting to minus
EUR 24.7m as well as a cash inflow derived from the disposal of
property, plant and equipment of EUR 14.7m. The total free cash flow
was EUR 68.6m, compared to EUR 51.3m in the first half of the
previous year.

EMPLOYEES During the period under review, the average number of
full-time employees at Austrian Post totalled 23,250 people,
corresponding to a decline in the workforce by 786 employees (on a
comparable basis excl. the meiller Group) compared to the prior-year
period. The number of employees in the Parcel & Logistics Division
increased slightly, whereas the staff of the Mail Division and Branch
Network Division was reduced as planned. Most of Austrian Post´s
labour force, namely 19,832 full-time equivalent employees, is
employed by the parent company Österreichische Post AG.

OUTLOOK 2011 Austrian Post expects the volume of addressed letter
mail in Austria to decrease by 3-5% p.a., reflecting international
trends. This will be primarily driven by electronic substitution and
the decline of high-value products. In contrast, there are
indications of a positive development in the business with parcels
and direct mail items, driven by the current economic development.
Based on these volume estimates, Austrian Post anticipates a
continuation of its revenue development for the entire year 2011, as
demonstrated by the 2.9% revenue growth in the first half of 2011.
The overall revenue development of the Mail Division should be stable
or increase slightly on a comparable basis. Austrian Post expects an
increase in the revenue of the Parcel & Logistics Division, which
will clearly focus on enhancing the profitability of the services
offered. With respect to the earnings development of the Group, the
company confirms its objective of achieving a sustainable EBITDA
margin between 10% and 12%. An EBITDA margin at the upper end of the
targeted range is expected for the entire year 2011. The operating
cash flow generated by Austrian Post will continue to be used to
finance future-oriented investments and dividend payments. The
financial planning of Austrian Post foresees total capital
expenditure of about EUR 80-90m in 2011. This will primarily focus on
replacement investments in existing facilities as well as in new and
more efficient sorting technology. The top priorities in the
company´s international business will be to enhance performance and
expand existing networks. Potential acquisitions will only take place
in the core business areas of Austrian Post, and only for companies
with growth-oriented business models. No major acquisitions are
foreseeable at the present time.

PERFORMANCE OF THE DIVISIONS MAIL DIVISION In the first six months of
2011, external sales of the Mail Division were up 2.1% on a
comparable basis, or EUR 13.5m. Revenue generated by the Letter Mail
Business Area remained constant at EUR 361.0m on a year-on-year
comparison. The substitution of letters by electronic media was
offset by positive effects such as changes in the letter mail
portfolio, self-service products and advance purchases of the new
line of postage stamps. The new option of selecting either Priority
or Economy products should successively lead to a trend towards
Economy products in upcoming quarterly periods. In the first half of
2011, revenue achieved by the Infomail Business Area (addressed and
unaddressed direct mail items) rose by 5.6% on a comparable basis, or
EUR 11.7m. Volume increased for both addressed and unaddressed mail
items, reflecting the good economic development of the advertising
industry. The joint venture MEILLERGHP established at the end of 2010
showed operational improvements in the merger phase, as expected.
Revenue of the Media Post Business Area also developed positively,
rising by 1.9%, or EUR 1.2m. On balance, EBITDA of the Mail Division
improved by 4.8% to EUR 143.5m during the first half-year of 2011. At
the same time, EBIT rose 10.2% to EUR 130.4m.

PARCEL & LOGISTICS DIVISION External sales of the Parcel & Logistics
Division climbed 6.2% in the first half of 2011, to EUR 410.9m. The
reason for this increase was higher parcel volumes despite price
pressure in almost all markets. The premium parcel product segment
(parcel delivery within 24 hours), which is mainly used in the
business-to-business area, generated a revenue increase of 5.6% in
the first half of 2011, to EUR 321.0m. The German subsidiary trans-o-
flex accounted for more than three quarters of this revenue. Parcel
volumes from business customers in Austria and in South East and
Eastern Europe also continued to develop very positively. Revenue
growth was also achieved in Belgium and the Netherlands, where the
restructuring efforts are intensified and outsourcing measures are
carried out. The standard parcels product segment in Austria used
mainly for shipments to private customers also achieved growth.
Revenue climbed by 1.8%, to EUR 79.5m. Accordingly, earnings of the
Parcel & Logistics Division increased, with EBIT improving by 69.3%
to EUR 10.3m.

BRANCH NETWORK DIVISION The structural adjustments taking place in
the branch network are reflected in the changed structure of postal
service points. The number of third-party operated postal partner
offices has increased from 756 in June 2010 to 1,212 at the reporting
date of June 30, 2011. On balance, Austrian Post had 1,876 postal
service points at the end of June 2011, compared to 1,807 one year
earlier. This change affects the revenue and cost structure of the
Branch Network Division, as does the contractually redefined
partnership with BAWAG P.S.K. Since the beginning of 2011, financial
services are no longer based on commissions but compensated primarily
on the basis of the actual costs incurred. At a year-on-year
comparison, external sales of the Branch Network Division fell by
6.2%, which is related to the new compensation agreement concluded
with BAWAG P.S.K. as well as to decreasing sales of
telecommunications products. Internal sales with postal services
further decreased slightly by 1.2% in the first half-year 2011. There
has been a general reduction in the volume of letters posted via the
branch network. Moreover, letters are increasingly being picked up
directly from large customers within the context of the enhanced
services offered by Austrian Post. Earnings of the Branch Network
Division improved as a consequence of the structural changes.
Accordingly, EBIT was up by EUR 3.9m in the first half of 2011 to
minus EUR 7.7m. The new strategic branch office cooperation with the
banking partner BAWAG P.S.K. is being rapidly implemented. 132
jointly operated outlets had been adapted and newly opened as at the
end of June 2011. By the end of the year, approximately 350 branch
offices will offer the opportunity for both partners to focus on
their respective core competences.

The half-year financial report 2011 is available in the internet:
www.post.at/ir/en --> Publications --> Financial Reports

Further inquiry note:
Austrian Post
Head of Investor Relations
DI Harald Hagenauer
Tel.: +43 57767-30400
harald.hagenauer@post.at

Austrian Post
Head of Press & Internal Communications
Mag. Ina Sabitzer
Tel.: +43 577 67-21763
ina.sabitzer@post.at

Austrian Post
Press Spokesman
Michael Homola
Tel.: +43 577 67-32010
michael.homola@post.at

end of announcement euro adhoc
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issuer: Österreichische Post AG
Postgasse 8
A-1010 Wien
phone: +43 (0)57767-0
mail: investor@post.at
WWW: www.post.at
sector: Transport
ISIN: AT0000APOST4
indexes: ATX Prime, ATX
stockmarkets: official market: Wien
language: English