EANS-Adhoc: ÖSTERREICHISCHE POST AG (AUSTRIAN POST) IN Q1-3 2011: Good development in the first nine months; 3.5%-4% revenue increase forecast for 2011 depending upon the overall economic situation

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9-month report

17.11.2011

- Revenue growth on a comparable basis Q1-3 - Revenue stable
year-on-year, up 4.1% on a comparable basis (excl. meiller Group) -
New products and services well received by the market - Focus on a
sustainable financial future - Investments in new sorting
facilities and solutions to enhance customer satisfaction -
Investments in structural measures to improve the cost structure
consistently - Improved earnings and cash flow Q1-3 - EBIT up 15.4%
to EUR 109.5m - Operating cash flow before changes in working
capital rises 26.9% to EUR 146.0m - Outlook for 2011 - Current
economic slowdown may impact consumer behaviour, revenue growth in
2011 of +3.5-4% depending on the overall economic development -
EBITDA margin at the upper end of the targeted range of 10-12%

AN OVERVIEW OF DEVELOPMENTS AT AUSTRIAN POST "The first three
quarters of the 2011 financial year proceeded very satisfactorily for
Austrian Post", says CEO Georg Pölzl. "The revenue increase achieved
in the mail and parcel segments once again demonstrates that our
strategic positioning is right and the implementation of our business
strategy is progressing well. Declining volumes for addressed letter
mail were more than compensated by positive effects as well as growth
in the parcels business and direct mail items". Group revenue in the
first three quarters of 2011 at EUR 1,709.9m was at the same level of
the reported revenue of EUR 1,713.2m in the prior-year period. For
better comparability, revenue in 2010 was adjusted to take account of
the meiller companies deconsolidated at the end of 2010. Accordingly,
Group revenue improved on a comparable basis from EUR 1,642.1m by
4.1%. The Parcel & Logistics Division generated a 6.0% and the Mail
Divisions a 4.1% revenue increase, whereas revenue of the Branch
Network Division fell by 4.1% as a result of the far-reaching
structural transformation taking place in this segment. New services
and self-service products have been well received by the market and
have provided a positive impetus to revenue. The underlying basis of
Austrian Post´s business operations is the consistent customer
orientation with the purpose of promoting innovative products with
self-service features. Another key challenge is to more efficiently
organise operational processes in order to be prepared for market
challenges. The ongoing substitution of addressed letter mail items
by electronic forms of communication is anticipated along with the
potential of an economic slowdown. Therefore, the focus is on the
sustainable financial future of the company. Investments designed to
improve service quality and the operating performance have priority.
In the past reporting period investments with the objective of
further enhancing efficiency and sustainably improving the cost
structure were carried out. The persistent focus on efficiency
improvements is reflected in the earnings. EBIT of Austrian Post rose
15.4% to EUR 109.5m. This includes operating improvements in all
divisions, but also higher allocations for provisions relating to
structural optimisation measures. On this basis, the operating cash
flow before changes in working capital climbed 26.9%, to EUR 146.0m.

Taking account of this development, Austrian Post expects Group
revenue in 2011 as a whole to rise by 3.5% to 4%, depending on the
overall economic situation. With respect to the development of
earnings at Austrian Post, the objective of generating a sustainable
EBITDA margin of 10% to 12% remains valid. An EBITDA margin at the
upper end of the targeted range is anticipated for the entire year
2011.

REVENUE DEVELOPMENT IN DETAIL In order to enable a consistent
analysis of Austrian Post´s revenue development, revenue in 2010 was
adjusted for the meiller companies deconsolidated as of December 20,
2010. The deconsolidation of these companies reduced the comparable
revenue of the Mail Division by EUR 71.1m in the first nine months of
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 to EUR 1,709.9m in the first three quarters of 2011,
a rise of 4.1%. Revenue growth was generated in the Parcel &
Logistics Division (+6.0%) and the Mail Division (+4.1%). In
contrast, revenue of the Branch Network Division fell by 4.1% in the
same period. In the first three quarters of 2011 there were 189
calendar working days, the same number as in the prior-year period.
In the Mail Division on the basis of the published revenue amounting
to EUR 1,011.2m in the first three quarters of 2010 revenue was down
by 3.3%. However, adjusted for the revenue share of the meiller
companies (pro forma consolidation), revenue in the Mail Division was
up 4.1% on a comparable basis to EUR 978.3m. The ongoing substitution
of letters by electronic media was in contrast to the positive
effects related to the new franking systems for small and
medium-sized firms and additional revenue generated in the field of
"Mail Solutions" as well as the new product portfolio and regular
stamps. A shift of volumes took place to the Mail Division with
respect to international e-commerce shipments. Moreover, the growth
in revenue from addressed and unaddressed direct mail items clearly
shows the enhanced activity of the advertising industry during the
period under review, whose campaigns to attract new customers
provided a positive impetus to business growth. Revenue in the Parcel
& Logistics Division climbed by 6.0% in the first three quarters of
2011 to EUR 618.1m, due to rising volumes and against the backdrop of
ongoing price pressure. Growth was generated in Austria as well as in
the regions Germany/Benelux and South East and Eastern Europe. The
organisational structure of the Branch Network Division is currently
undergoing change. Over the last 12 months, the number of third-party
operated postal partner offices has risen from 898 to 1,239 as at
September 30, 2011. 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. Thus
the division´s external sales were down 4.1% to EUR 112.8m.

INCOME STATEMENT The revenue growth of 4.1% or EUR 67.8m on a
comparable basis also affected the cost structure of the Group.
Higher revenue and parcel volumes increased the purchase of external
transport services carried out by parcel logistics subcontractors. As
a consequence, operating expenses for raw materials, consumables and
services used rose 8.0% on a comparable basis, to EUR 548.7m. Staff
costs on a comparable basis remained constant at EUR 817.0m, although
operational staff costs even declined by EUR 18.8m to EUR 749.8m.
Savings in operational staff costs were achieved by taking advantage
of voluntary employee departures. On a comparable basis, the average
number of employees fell by 747 to 23,486 employees (full-time
equivalents). Most of Austrian Post´s labour force, namely 20,058
full-time equivalents, is employed by the parent company
Österreichische Post AG. Non-operational staff costs, which amounted
to EUR 67.2m in the first nine months of this year, include all
investments designed to achieve a consistent improvement in the cost
structure, such as expenses for structural measures and provisions
for employee under-utilisation. In the reporting period, expenses of
EUR 21.7m were reported for employees who transfer to the federal
public service, mainly resulting from the allocation of a provision
for an additional 208 employees. Furthermore, a provision of EUR
20.0m was allocated for structural measures relating to the Parcel &
Logistics Division. Earnings before interest, tax, depreciation and
amortisation (EBITDA) of Austrian Post improved to EUR 175.5m in the
first three quarters of 2011. Accordingly, the EBITDA margin was
10.3%. EBIT rose 15.4% to EUR 109.5m, corresponding to an EBIT margin
of 6.4%. All divisions improved their operating results during the
period under review. EBIT of the Mail Division rose by 21.9%. The
Branch Network Division continued its restructuring efforts,
increasing EBIT by 60% in the first nine months of this year. EBIT of
the Parcel & Logistics Division before provision for structural
measures climbed 59.2%. In order to further improve the profitability
of this division, revenue and cost-related measures designed to
consistently enhance performance were initiated. The objective of the
entire division is to keep logistics systems as lean as possible and
increase capacity utilisation. Moreover, Austrian Post is evaluating
alternatives for the Benelux region in order to be able to offer the
most sustainable and efficient logistics solution. The aim is to
maintain the supply of services, streamline the network and make a
structural decision by the end of the year with respect to strategic
partnerships and outsourcing. A provision amounting to EUR 20.0m for
structural measures relating to the Parcel & Logistics Division was
established and reported in the balance sheet. The issues of
provisions and future investments also shaped the Corporate segment.
EBIT of this segment declined by 32.8%, which can be attributed to
the increased allocation of provisions during the reporting period
for employees who are likely to transfer to the federal public
service. Earnings before tax of the Group rose 19.3% to EUR 105.8m.
After deducting income taxes totalling EUR 26.9m, the Group net
profit (profit for the period) amounted to EUR 78.9m. This
corresponds to earnings of EUR 1.17 per share for the first nine
months of 2011, compared to the prior-year level of EUR 1.01, and EUR
0.25 per share for the third quarter of 2011, up from EUR 0.21 in the
previous year.

CASH FLOW In the first three quarters of 2011, the operating cash
flow before changes in working capital amounted to EUR 146.0m, a rise
of EUR 31.0m from the prior-year level. The cash flow from changes in
net working capital declined by EUR 18.9m during the period under
review. This development is largely due to the increased level of
receivables, mainly resulting from the new Value Added Tax regulation
applicable since the beginning of 2011 as well as different payment
dates for the salaries of civil servants on a year-on-year
comparison. The cash flow from investing activities of minus EUR
13.2m includes cash outflows for the purchase of property, plant and
equipment (CAPEX) amounting to minus EUR 43.4m as well as the cash
inflow derived from the disposal of property, plant and equipment of
EUR 19.8m. The total free cash flow was EUR 113.8m, compared to EUR
79.2m in the first nine months of the previous year.

OUTLOOK FOR 2011 Austrian Post expects the long-term macro trends
prevailing on the postal market to continue for the entire 2011
financial year. However, the short-term economic development is
likely to be negatively impacted by the current sovereign debt crisis
in Europe. The current economic slowdown may impact consumer
behaviour. Electronic substitution of letters will also reduce letter
mail volumes in Austria by 3-5% p.a., reflecting international
trends. The market for parcels and direct mail items may be impacted
by the weakening economy, but should prove to be largely robust.
Based on developments to date, the Management Board expects the total
Group revenue of Austrian Post to improve by 3.5%-4% for the year
2011 as a whole, depending upon the overall economic development. The
Mail Division will generate revenue growth on a comparable basis in
contrast to the revenue decline in the Branch Network Division.
Revenue is also expected to develop positively in the Parcel &
Logistics Division. Austrian Post will clearly focus on enhancing the
profitability of the services offered. With respect to the earnings
development of the Group, Austrian Post 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 primarily 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 involve replacement investments in existing
facilities as well as in new and more efficient sorting technology.
Moreover, investments in structural measures to improve the operating
cost structure will have priority.

Vienna, November 17, 2011

The interim report for the first three quarters of 2011 is available
in the internet: www.post.at/ir/en --> Publications --> Financial
Reports

Further inquiry note:
Austrian Post
Head of Press & Internal Communications
Ms Ina Sabitzer
Tel.: +43 577677 21763
ina.sabitzer@post.at

Press Spokesman
Mr Michael Homola
Tel.: +43 57767 32010
michael.homola@post.at

Head of Investor Relations & Corp. Governance
Mr Harald Hagenauer
Tel.: +43 57767 30400
harald.hagenauer@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