EANS-News: Österreichische Post AG / AUSTRIAN POST Q1 2014: SLIGHT REVENUE AND EARNINGS DECLINE BASED ON A STRONG PRIOR-YEAR QUARTER; OUTLOOK CONFIRMED FOR 2014

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Financial Figures/Balance Sheet

Wien (euro adhoc) - AUSTRIAN POST Q1 2014

- Market environment - Ongoing trend towards electronic
substitution of mail - Solid growth on the Austrian parcel market
- Tough competition in the international parcel sector - Revenue -
Slight revenue decline of 0.7% as expected following positive
election effects in Q1 2013 - Higher revenue in the parcel
business but decrease in the mail segment - Earnings - EBIT down
2.6% compared to strong prior-year quarter - Resolute efficiency
enhancement and cost optimisation - Outlook for 2014 confirmed -
Stable revenue development in a challenging market environment -
EBIT improvement aspired for 2014

OVERVIEW OF AUSTRIAN POST In the first quarter of 2014, revenue and
earnings of Austrian Post developed in line with expectations. Total
Group revenue declined slightly by 0.7% to EUR 598.4m compared to a
very good prior-year quarter benefitting from positive revenue
effects mainly arising from elections and referendums. Whereas mail
revenue declined as expected, the parcel and logistics business
showed an increase of 3.7% during the reporting period. The Austrian
market as well as the subsidiaries in Central and Eastern Europe and
Germany generated a rise in revenue. In Germany, the focus continues
to be on increasing the profitability of the services rendered. In
the mail segment, growth was achieved especially in new business
areas such as Mail Solutions. At the same time, Austrian Post is
fighting for every letter in its traditional mail business by
providing individualised customer solutions. Operating results (EBIT)
declined by 2.6% from the previous year to EUR 58.2m due to the
somewhat lower Group revenue. The earnings development of the
individual divisions makes it clear that the focus will continue to
be on resolutely implementing efficiency enhancement measures. In the
mail segment, the revenue decrease could be almost completely offset
by a cost optimisation drive. In the parcel business, negative
effects in connection to the trans-o-flex Group such as write-downs
and structural measures had an impact. The Corporate segment showed a
slight EBIT improvement due to the reduced need to allocate
provisions. "In terms of the 2014 outlook, we expect a stable revenue
development, but at the same time are striving to further increase
earnings. The main focus of our strategic activities is continued
efficiency enhancement in addition to the consistent orientation to
the needs of our customers. That is why we are continuing our
investment programme in 2014, featuring capacity expansion measures,
new sorting technologies and innovative solutions", says CEO Georg
Pölzl. From the capital market point of view, Austrian Post remains
committed to its clear positioning as a reliable and predictable
dividend stock. Accordingly, the Annual General Meeting held on April
24, 2014 approved the resolution to distribute a dividend of EUR 1.90
per share for payment on May 8, 2014.

REVENUE DEVELOPMENT IN DETAIL In the first quarter of 2014, reported
revenue of the Austrian Post Group slightly declined as expected
compared to the prior-year quarter. A significant influencing factor
in the previous year was the large number of elections and
referendums which positively affected mail volumes in 2013.
Accordingly, revenue in the first quarter of 2014 amounted to EUR
598.4m, a drop of 0.7% from the first quarter of 2013 but higher than
in 2012. The Mail & Branch Network Division accounted for the largest
share or 63.2% of total Group revenue in the first quarter of 2014.
Divisional revenue was at an extraordinarily high level in the
prior-year period due to numerous elections held in Austria in the
first half of 2013. Revenue of the Mail & Branch Network Division
totalled EUR 378.8m in the first quarter of 2014. The year-on-year
decline of 3.1% was due to these special effects as well as the
ongoing electronic substitution of letters and lower direct mail
volumes. The Parcel & Logistics Division contributed 36.7% to total
Group revenue, with revenue in the first quarter rising by 3.7% to
EUR 220.0m. The Mail & Branch Network Division generated external
revenue of EUR 378.8m in the first quarter of 2014. Of this amount,
54.7% can be attributed to the Letter Mail & Mail Solutions business,
whereas Direct Mail accounted for 27.9% of total divisional revenue
and Media Post, including newspaper and magazines, had a 9.3% share
in the first quarter of the year. In addition, Branch Services
accounted for 8.1% of divisional revenue. Revenue in the field of
Letter Mail & Mail Solutions fell by 1.2% from the previous year to
EUR 207.1m. The substitution of letter mail by electronic media is
continuing as before. Decreases took place, for example, in the
customer segment comprising the public sector. Elections such as the
Austrian Chamber of Labour elections in the federal provinces
provided added impetus but did not have such a pronounced impact on
revenue as in 2013. New services offered in the field of Mail
Solutions posted growth. However, the basic trend of declining letter
mail volumes remains valid. Revenue in the Direct Mail business was
down 6.3% in the first quarter of 2014 to EUR 105.7m, which can be
partly attributed to the lower revenue effects from elections
compared to the previous year. Direct mail volumes are generally
affected by overall economic momentum and the advertising activities
of customers. The pressure exerted by online business on traditional
mail order companies and retail stores led to dampened advertising
spending on the part of several customers in Austria as well as in
South East and Eastern Europe. Moreover, the unaddressed segment in
particular was subject to declining direct mail volumes, especially
in the customer segment of building supplies stores. Media Post
revenue also remained at a stable level of EUR 35.3m, comprising a
decrease of 0.1% in a quarterly comparison. Branch Services revenue
was down to EUR 30.8m, due to the fact that adjustments to service
rates charged to customers on the part of telecommunication providers
led to a drop in revenue from mobile telephony products. External
sales of the Parcel & Logistics Division rose by 3.7% in the first
quarter of 2014 to EUR 220.0m, with Premium Parcels generating the
lion's share or 75.0% of total divisional revenue (parcel delivery
within 24 hours). Premium Parcels which are mainly used in the
business-to-business segment, generated revenue of EUR 165.0m in the
first quarter of 2014, a rise of 3.8% from the previous year. The
good development was the consequence of revenue growth generated with
existing customers as well as the company's success in attracting new
customers. The business parcel segment in Austria developed well,
whereas disproportionately high growth was also achieved in the
higher value parcels to private customers. Standard Parcels, which
mainly involve shipments to private customers in Austria, posted
first-quarter revenue of EUR 46.1m, comprising a slight increase of
0.3%. Other Parcel Services, which includes various additional
logistics services such as fulfilment, warehousing and cash
logistics, generated revenue of EUR 8.9m in the first quarter of
2014, a rise of EUR 1.6m from the previous year. From a regional
perspective, 57% of total revenue in the Parcel & Logistics Division
was generated in Germany in the first quarter of 2014, 35% in Austria
and 8% by the subsidiaries in South East and Eastern Europe. Revenue
in Germany was up by 2.6%, although the challenging competitive
environment and the price pressure on this market will continue to
have a significant impact on the business. At the same time, revenue
growth in Austria reached a level of 4.4%, supported by the trend
towards online shopping as well as the higher market share in the
business parcel segment. In total, the South East and Eastern
European subsidiaries posted first-quarter growth of 8.7%.

EXPENSE AND EARNINGS DEVELOPMENT

The item raw materials, consumables and services used declined by 1.8% in the
reporting period to EUR 183.8m. This development is primarily due to the
decrease in costs for external transport services. In particular, in Germany the
business model of the trans-o-flex Group is characterised by a high level of
external value creation, which has been reduced due to the acquisition of
distribution companies.
Staff costs of Austrian Post remained largely stable at EUR 280.6m in the first
quarter of 2014. The operational staff costs of salaries and wages, which are
included in this total, were slightly higher than in the previous year as a
consequence of the integration of the distribution companies. Persistent
efficiency enhancement measures and the optimisation of the staff structure
succeeded in counteracting the regular salary increases. On balance, the average
number of employees (full-time equivalents) working for Austrian Post in the
first quarter of 2014 amounted to 23,732 people, compared to 23,829 employees in
the first quarter of 2013. Moreover, staff costs in the first quarter of 2014
also included termination benefits as well as well as wage-related contributions
from previous periods, each totalling about EUR 6m.
The lower Group revenue also resulted in a slight decrease in earnings. Earnings
before interest, tax, depreciation and amortisation (EBITDA) of the Austrian
Post Group fell by 1.5% to EUR 78.8m, corresponding to an EBITDA margin of
13.2%. Earnings before interest and tax (EBIT) amounted to EUR 58.2m, a decrease
of 2.6% from the previous year. The corresponding EBIT margin was 9.7%.
After deducting the income tax of EUR 13.8m, the Group net profit (profit after
tax for the period) amounted to EUR 43.7m, a decline of 6.4% compared to the
first quarter of 2013. This comprises undiluted earnings per share of EUR 0.64
for the first quarter of 2014.
From a divisional perspective, the earnings situation was characterised by only
minor changes compared to the first quarter of the previous year. The Mail &
Branch Network Division generated an EBITDA of EUR 85.4m, a drop of 1.0% and an
EBIT of EUR 77.9m, down 1.4%. The revenue decrease was almost completely offset
by stringent cost discipline.
EBITDA of the Parcel & Logistics Division amounted to EUR 10.7m, compared to EUR
12.4m in the first quarter of 2013, whereas EBIT totalled EUR 5.5m, down from
EUR 7.4m in the previous year in the first quarter of 2013. The EBIT decline can
be attributed to the negative effects of EUR 2.7m relating to the trans-o-flex
Group. Write-downs on receivables as well as various structural measures within
the context of the efficiency enhancement programme were necessary.
The Corporate Division basically encompasses all expenses for central
departments in the Group as well as staff-related provisions. The reduced
expenses for staff-related provisions for under-utilisation in the first quarter
of 2014 resulted in a slightly improved EBIT of minus EUR 25.3m.

CASH FLOW AND BALANCE SHEET

In the first quarter of 2014, operating cash flow before changes in
working capital amounted to EUR 73.8m, down by EUR 14.7m from the
comparable prior-year figure. The changes in working capital totalled
minus EUR 23.2m in the reporting period compared to minus EUR 38.7m
in 2013. As a result, the cash flow from operating activities at EUR
50.6m was at about the same level as in the previous year. This can
be attributed, among other reasons, to a lower growth in receivables.
The cash flow from investing activities of minus EUR 7.8m in the
first quarter of 2014 was significantly below the prior-year level.
Not only were there hardly any payments made in the reporting period
in connection with acquisitions, but the cash outflows for property,
plant and equipment (CAPEX) reported at minus EUR 11.2m was
considerably below the first quarter of 2013. In contrast, proceeds
from the disposal of financial investments in securities amounting to
EUR 5.0m tended to increase the cash flow. On balance, the free cash
flow totalled EUR 42.8m in the reporting period. The free cash flow
before acquisitions and securities was EUR 38.0m, a rise of EUR 9.9m
from the prior-year quarter. Austrian Post pursues a conservative
balance sheet policy and financing structure. This is demonstrated by
the high equity ratio, the low amount of financial liabilities and
the solid level of cash and cash equivalents invested with the least
possible risk. Equity of the Austrian Post Group totalled EUR 743.2m
as at March 31, 2014, corresponding to an equity ratio of 44.4%. The
analysis of the financial position of the company shows a high level
of current and non-current financial resources to the amount of EUR
345.6m (cash and cash equivalents plus financial investments in
securities). These financial resources are in contrast to financial
liabilities of only EUR 23.5m.

EMPLOYEES The average number of full-time employees at the Austrian
Post Group totalled 23,732 people during the period of review,
comprising a decline of 97 employees from the prior-year period. Most
of Austrian Post's staff or a total of 18,178 employees (full-time
equivalents) is employed by the parent company Österreichische Post
AG.

OUTLOOK 2014 The general trends in both the mail and parcel
businesses continued on a national and international level in the
first quarter of 2014. For this reason, Austrian Post confirms its
previously announced outlook for the entire year 2014, in which the
company is striving to achieve a stable revenue development. The
decrease in mail revenue should be compensated by higher parcel
revenue. The mail business will continue to be impacted by the
ongoing volume decline for addressed mail due to electronic
substitution. New regulations stipulating the obligatory electronic
delivery of official government mail will tend to accelerate this
trend. In line with comparable international markets, the decrease in
letter mail volume is likely to amount to 3-5%. The market for
addressed and unaddressed direct mail is being impacted by slower
economic growth and the pressure exerted by e-commerce on traditional
mail order companies and retail stores. In contrast, in the Parcel &
Logistics Division the online retail business is the driving force
behind growth in the private customer segment, expected to total 3-6%
annual depending on the region. The development of the business
parcel segment in the individual markets depends on the state of the
economy and the current competitive situation. Austrian Post is
implementing a programme of measures to achieve "operational
excellence" in order to further increase the efficiency of the
services provided. Structures and processes in both the mail and
parcel logistics are being consistently improved. The new automation
and sorting technologies will enable Austrian Post to consistently
exploit its cost reduction potential. For this reason, capital
expenditure in the year 2014 will once again total about EUR 100m.
Profitability is the top priority in the company's international
business operations, encompassing both a focus on the core business
as well as ensuring the steady increase of efficiency in all
processes. With respect to its earnings development, the Austrian
Post Group remains committed to the target of achieving a sustainable
EBITDA margin of 10-12%. The company is also striving to improve its
earnings before interest and tax (EBIT) in 2014.

OVERVIEW OF KEY INDICATORS

EUR m Q1 2013 Q1 2014 Change %
Income statement
Revenue 602.9 598.4 -0.7%
Earnings before interest, tax, 80.0 78.8 -1.5%
depreciation and amortisation (EBITDA)
EBITDA margin* 13.3% 13.2% -
Earnings before interest and tax (EBIT) 59.7 58.2 -2.6%
EBIT margin* 9.9% 9.7% -
Profit before tax 58.8 57.4 -2.4%
Profit for the period 46.6 43.7 -6.4%
Earnings per share (EUR)** 0.69 0.64 -6.1%
Employees (average for the period, full- 23,829 23,732 -0.4%
time equivalents)

Cash flow
Operating cash flow before changes in 88.6 73.8 -16.6%
working capital
Cash flow from operating activities 49.8 50.6 1.5%
Investment in property, plant and -22.3 -11.2 -49.8%
equipment (CAPEX)
Acquisition/disposal of subsidiaries -11.0 -0.2 <-100%
Free cash flow before acquisitions/ 28,1 38.0 35.4%
securities

Balance sheet Dec. 31, 2013 Mar. 31, 2014 Change %

Total assets 1,641.6 1,672.3 1.9%
Equity 699.4 743.2 6.3%
Non-current assets*** 1,066.4 1,058.9 -0.7%
Current assets*** 573.3 613.4 7.0%
Net debt 114.3 73.3 -35.8%
Equity ratio 42.6% 44.4% -
Capital employed 755.3 758.2 0.4%

* EBIT and EBITDA in relation to total Group revenue
** Undiluted earnings per share in relation to 67,552,638 shares
*** Excl. Assets held for sale

The interim report for the first quarter of 2014 is available on the
Internet at www.post.at/ir --> Publications --> Financial Reports.

Further inquiry note:
Austrian Post
Harald Hagenauer
Head of Investor Relations, Corporate Governance, Group Auditing & Compliance
Tel.: +43 (0) 57767-30400
harald.hagenauer@post.at

Austrian Post
Ingeborg Gratzer
Head of Press Relations & Internal Communications
Tel.: +43 (0) 57767-24730
ingeborg.gratzer@post.at

end of announcement euro adhoc
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company: Österreichische Post AG
Haidingergasse 1
A-1030 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