EANS-News: Österreichische Post AG / AUSTRIAN POST Q1-3 2014: REVENUE AT THE PRIOR-YEAR LEVEL; SLIGHT EBIT INCREASE; OUTLOOK CONFIRMED FOR 2014

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9-month report

- Market environment - Revenue development in the mail business
impacted by election effects during the course of the year - Solid
growth of the Austrian parcel market, intense competition in the
international parcel sector - Revenue - Group revenue at the same
level as in the previous year (-0.1% in both Q1-3 and Q3) - Higher
revenue Q1-3 in the parcel business (+3.3%) and decrease in the mail
segment (-2.0%) - Earnings - Continuing efficiency enhancement and
cost optimisation - Slight EBIT rise of 0.8% in Q1-3 and 1.9% in Q3
- Outlook for 2014 confirmed - Stable revenue development in a
challenging market environment - Further EBIT improvement targeted

OVERVIEW OF AUSTRIAN POST Austrian Post generated Group revenue of
EUR 1,732.7m in the first three quarters of 2014, the same level as
in the previous year. The solid growth rate of 3.3% achieved in the
parcel business almost completely offset the 2.0% revenue decline in
the mail segment.

Mail revenue was influenced by election effects during the course of
the year. In particular, no significant revenue was generated from
elections in the third quarter, whereas national council elections
contributed EUR 6m in revenue in the third quarter 2013. The downward
trend in mail volumes caused by the substitution of letters through
electronic forms of communication also continued. In contrast,
revenue growth in Mail Solutions had a positive impact. Once again
the parcel business showed steady growth, expanding by 3.3% from the
previous year. The ongoing trend toward increased e-commerce provided
growth not only for the Austrian parcel market, but also for the
parcel subsidiaries in South East and Eastern Europe, which showed
exceptionally high growth rates. Revenue in Germany only rose
slightly.

Operating result (EBIT) rose by 0.8% from the previous year to EUR
132.6m on the basis of solid revenue development and ongoing cost
discipline. Third-quarter EBIT was also up 1.9% to EUR 33.8m, with
both the current and prior-year periods impacted by special effects.
From an operational perspective, Austrian Post continued to push
ahead with its innovation and efficiency measures in the first three
quarters of 2014. The opening of the new Allhaming Logistics Centre
provided an important impetus. The Allhaming facility, the largest
investment project implemented by Austrian Post in recent years, is
equipped with state-of-the-art, high-performance sorting
technologies. In addition, 225 self-service zones with 110 pick-up
stations have already been installed at Austrian Post's branch
offices. In spite of the extensive investment programme, free cash
flow remained at a high level, providing a solid basis to support
future investments and Austrian Post's attractive dividend policy.

"With respect to the outlook for the entire year 2014, we continue to
expect stable revenue development, but will strive to further improve
earnings (EBIT). The main focus of our strategic activities is our
consistent focus on customer needs in order to consolidate market
leadership in our core business and simultaneously exploit
opportunities in growth markets. Moreover, we are striving to
maintain our strong focus on innovation and efficiency in all
processes. This is the only way we can remain faithful to our basic
philosophy; emphasising reliability, continuity and predictability,
also when it comes to our earnings development, and generate
sustainable value for the benefit of all stakeholders", says Austrian
Post CEO Georg Pölzl.

REVENUE DEVELOPMENT IN DETAIL Austrian Post's revenue remained steady
during the first nine months of 2014. Group revenue declined by just
0.1% to EUR 1,732.7m. The parcel business continued to show solid
growth of 3.3% during the reporting period, almost fully compensating
for the 2.0% drop in mail revenue. Third-quarter revenue was also
down marginally by 0.1% to EUR 560.8m.

The Mail & Branch Network Division accounted for the largest share or 62.6% of
total Group revenue in the first three quarters of 2014. Divisional revenue in
the reporting period was impacted by election effects. Generally, elections and
referendums result in substantial revenue contributions because absentee voting
is gaining in popularity and direct mail items are a popular means of
communication in election campaigns. The revenue contributions of elections
totalled EUR 14m in the first three quarters of 2013 but were somewhat lower at
about EUR 9m in the comparable period of 2014. The third quarter particularly
illustrates the uneven distribution of elections and referendums over the course
of the year. Elections did not generate any significant revenue in the third
quarter of 2014, whereas national council elections contributed EUR 6m in
revenue in the prior-year period. On balance, divisional revenue fell by 2.0% to
EUR 1,086.0m in the reporting period. This decline can be attributed to the
ongoing electronic substitution of letters as well as decreasing direct mail
volumes. Revenue was down 2.3% in the third quarter, in particular due to the
lack of positive revenue effects from elections.

The Parcel & Logistics Division generated 37.4% of total Group revenue, with
revenue in the first three quarters rising by 3.3% to EUR 647.9m. Divisional
revenue rose by 3.8% in the third quarter of 2014. From a regional perspective,
56% of total revenue in the Parcel & Logistics Division was generated in Germany
in the first three quarters of 2014, 35% in Austria and 9% by the subsidiaries
in South East and Eastern Europe. Revenue in Germany rose slightly by 0.8%,
although the challenging competitive environment and the price pressure in this
market continue to have a noticeable impact on the business. Revenue growth in
Austria reached a level of 6.0%, supported by the trend towards online shopping
as well as increases in the business segment. In total, the subsidiaries in
South East and Eastern Europe posted substantial revenue growth, amounting to
9.0% in the first three quarters of the year.

EXPENSE AND EARNINGS DEVELOPMENT

Raw materials, consumables and services used declined by 2.0% or EUR
11.2m in the reporting period to EUR 545.5m. This development is
primarily due to the decrease in costs for external transport
services in Germany. The business model of the trans-o-flex Group was
characterised by a high level of external value creation, which is
currently being reduced thanks to the takeover of several
distribution companies.

Staff costs of Austrian Post totalled EUR 815.4m in the first three
quarters of 2014, an increase of 4.0% or EUR 31.0m. This rise can be
partly attributed to the previously-mentioned integration of
distribution companies in Germany, which in turn led to a decline of
services used. Operational staff costs of salaries and wages were at
a similar level to the previous year excluding these effects
(like-for-like basis). This shows that the continuing strict
efficiency enhancement measures and improvement of staff structure
offset inflation-based cost increases. On balance, the average number
of employees (full-time equivalents) working for Austrian Post in the
first three quarters of the year amounted to 24,005 people, compared
to 24,257 employees in the prior-year period.

The rise in staff costs is also due to special effects which
primarily had an impact on the year-on-year comparison of third
quarter results. In the third quarter of 2013, the reduction in the
provision for under-utilisation had a positive effect totaling EUR
16.3m, whereas adjustments to the parameters for interest-bearing
staff-related provisions (discount interest rate, salary increases)
led to a negative effect of EUR 11.8m in the third quarter of 2014.
In addition, staff costs in the first three quarters of 2014 include
wage-related contributions from previous periods of about EUR 7m from
previous periods and also again termination benefits of EUR 17m.

Earnings before interest, tax, depreciation and amortisation (EBITDA)
amounted to EUR 202.2m in the first nine months, comprising an EBITDA
margin of 11.6%. The prior-year EBITDA was 10.0% higher, but was
impacted by the already-mentioned positive staff-related special
effects.

Depreciation, amortisation and impairment losses totalled EUR 67.6m
in the first three quarters of 2014, a drop of EUR 23.4m from the
prior-year level. Whereas an impairment loss of EUR 27.0m was
recognised for goodwill at the trans-o-flex Group in Germany in the
third quarter of 2013, the period under review was marked by an
impairment loss of EUR 4.9m reported for goodwill at the Polish
subsidiary PostMaster Sp. z o.o. As a result, earnings before
interest and tax (EBIT) in the first three quarters of 2014 increased
slightly by 0.8% year-on-year to EUR 132.6m. The corresponding EBIT
margin was 7.7%.

After deducting other financial results, earnings before tax (EBT)
amounted to EUR 130.2m in the first three quarters of 2014, an
increase of 1.1% year-on-year. Income tax at EUR 30.4m was higher
than the comparable figure of EUR 23.9m in the first three quarters
of 2013, attributable to the effects from deferred taxes in the
previous year. Due to this higher tax effect, the Group net profit
(profit after tax for the period) amounted to EUR 99.8m, a drop of
4.9% from the previous year. This corresponds to undiluted earnings
per share of EUR 1.47 for the first nine months of 2014.

From a divisional perspective, the Mail & Branch Network Division generated an
EBITDA of EUR 223.2m during the period under review, a decline of 4.4%, whereas
EBIT totalled EUR 195.5m, down 6.3% from the prior-year level. This development
is attributable, amongst other factors, to the lower positive effects from
elections compared to the previous year. In particular, higher-margin addressed
mail items showed a decline. Divisional earnings were negatively impacted by an
impairment loss of EUR 4.9m recognised for goodwill at the Polish subsidiary
PostMaster Sp. z o.o. in the second quarter and adjustments to the parameters
for interest-bearing staff-related provisions in the third quarter totalling
minus EUR 4.0m.

EBITDA of the Parcel & Logistics Division amounted to EUR 34.2m in the first
nine months of 2014, up from EUR 27.9m in the first three quarters of 2013,
whereas EBIT totalled EUR 18.5m in the reporting period compared to the
prior-year figure of minus EUR 14.4m. In addition to operational improvements,
this substantial rise is primarily the consequence of negative effects in the
previous year, namely the impairment loss of EUR 27.0m on goodwill of the
trans-o-flex Group and write-downs of EUR 5.1m relating to the trans-o-flex
Group, mainly on receivables.

The Corporate Division (including Consolidation) basically encompasses all
expenses for central departments in the Group as well as staff-related
provisions and other provisions. EBIT was down to minus EUR 81.5m, a decrease of
EUR 18.6m mainly attributable to special effects in the third quarter. The
reduced need to allocate provisions for employee under-utilisation positively
impacted earnings in the previous year, whereas adjustments to parameters for
interest-bearing staff-related provisions had a negative effect of EUR 7.4m in
the third quarter of 2014.

CASH FLOW AND BALANCE SHEET In the first three quarters of 2014,
operating cash flow amounted to EUR 164.6m, down by EUR 7.1m from the
comparable prior-year figure. In contrast to the previous year, the
cash flow from operating activities includes payments for
wage-related contributions from previous periods.

The cash flow from investing activities of minus EUR 43.9m in the
first nine months of 2014 was significantly lower than 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 the
purchase of property, plant and equipment reported at EUR 53.0m were
below the prior-year period. At the same time, proceeds from the
redemption of financial investments in securities amounting to EUR
13.0m increased the cash flow. Free cash flow totalled EUR 120.7m in
the reporting period. Free cash flow before acquisitions and
securities reached EUR 108.6m, a stable high level compared to EUR
109.1m in the previous year.

Austrian Post pursues a conservative balance sheet policy and
financing structure. This is demonstrated by the high equity ratio,
low financial liabilities and solid cash and cash equivalent levels
invested with the least possible risk. Equity of the Austrian Post
Group totalled EUR 661.8m as at September 30, 2014, corresponding to
an equity ratio of 41.3%. An analysis of the financial position of
the company shows a high level of current and non-current financial
resources of EUR 276.4m (cash and cash equivalents of EUR 223.8m as
well as financial investments in securities of EUR 52.6m). These
financial resources are in contrast to financial liabilities of only
EUR 18.9m.

EMPLOYEES The average number of employees (full-time equivalents) at
the Austrian Post Group totalled 24,005 people during the first nine
months of 2014, comprising a reduction of 252 employees from the
prior-year period, whereas the staff of the trans-o-flex Group
increased by 484 employees (full-time equivalents) due to the
integration of various distribution companies in Germany. Most of
Austrian Post's staff or a total of 18,471 employees (full-time
equivalents) is employed by the parent company Österreichische Post
AG.

OUTLOOK 2014 The mail and parcel businesses continued to develop in
line with expectations in the third quarter of 2014. For this reason,
Austrian Post confirms its previously announced outlook for the full
year 2014 of stable revenue. Decreases in mail revenue should be
offset by higher parcel revenue.

It is also important for the company to counteract the ongoing volume decline
for addressed mail on a long-term basis by introducing customer-oriented
solutions. The international baseline scenario consists of a 3-5% annual
decrease in addressed mail volumes as a consequence of electronic substitution.
Up until now, Austrian Post has succeeded in keeping this decline at the lower
end of the anticipated range as a result of a series of measures. Another
structural trend is the pressure exerted by e-commerce on many retail companies,
selectively affecting individual sectors and their advertising spending.

In the future, investments designed to ensure greater customer convenience and
promote higher quality service will be consistently pursued. Postal rates in the
mail business will be adjusted as of March 1, 2015 to maintain Austrian Post's
innovative strength despite rising inflation-related factor costs since the last
pricing changes implemented in 2011.

In contrast, in the Parcel & Logistics Division, online shopping is the driving
force behind growth in the private customer segment, expected to amount to 3-6%
per year depending on the region. Generally, the development of the business
parcel segment in the individual markets depends on the state of the economy,
although competition in the parcel business is increasing.

Austrian Post is implementing a programme of measures to achieve "operational
excellence" in order to further increase the efficiency of its services.
Innovation and cost potential should be consistently exploited on the basis of
the new sorting technologies. For this reason, capital expenditure in the year
2014 will total about EUR 90m. Profitability is the top priority in the
company's international business operations, encompassing both a strict focus on
the core business as well as ensuring the steady increase of efficiency in all
processes.

The Austrian Post Group remains committed to the medium-term target
of achieving a sustainable EBITDA margin of about 12%. This objective
as well as an improvement in earnings before interest and tax (EBIT)
also applies to the entire year 2014. Austrian Post's operating
results in 2014 should reflect the trend prevailing in the first
three quarters of the year. Special effects unrelated to normal
business operations could influence overall results for 2014,
including potential sales of commercial properties which usually
positively impact earnings as well as various structural measures and
write-downs which could negatively affect the company's performance.

OVERVIEW OF KEY INDICATORS
change
EUR m Q1-3 2013 Q1-3 2014 % EUR m Q3 2013 Q3 2014
Revenue 1,734.2 1,732.7 -0.1% -1.6 561.1 560.8
thereof Mail & Branch 1,107.7 1,086.0 -2.0% -21.7 353.1 344.9
Network Division
thereof Parcel & Logistics 627.5 647.9 3.3% 20.4 208.5 216.3
Division
thereof Corporate/ -1.0 -1.2 -25.5% -0.3 -0.5 -0.4
Consolidation
Other operating income 50.2 50.1 0.0% 0.0 16.1 17.7
Raw materials, consumables and -556.5 -545.4 -2.0% -11.2 -184.1 -182.6
services used
Staff costs -784.4 -815.4 4.0% 31.0 -233.8 -263.7
Other operating expenses -216.0 -220.2 2.0% 4.2 -75.0 -76.5
Results of investments -4.9 -1.5 68.5% 3.4 -1.6 -0.5
consolidated at equity
Earnings before interest, tax,
depreciation and amortisation 222.6 200.2 -10.0% -22.3 82.7 55.1
(EBITDA)
Depreciation, amortisation and -91.0 -67.6 -25.7% -23.4 -49.5 -21.3
impairment losses
Earnings before interest and 131.5 132.6 0.8% 1.1 33.2 33.8
tax (EBIT)
thereof Mail & Branch 208.8 195.5 -6.3% -13.3 66.9 56.7
Network Division
thereof Parcel & Logistics -14.4 18.5 >100% 32.9 -26.8 6.4
Division
thereof Corporate/ -62.9 -81.5 -29.6% -18.6 -6.9 -29.3
Consolidation
Other financial result -2.8 -2.4 13.5% 0.4 -0.8 -0.6
Earnings before tax (EBT) 128.7 130.2 1.1% 1.4 32.3 33.2
Income tax -23.9 -30.4 27.5% 6.6 -3.9 -7.0
Profit for the period 104.9 99.8 -4.9% -5.1 28.4 26.2
Earnings per share (EUR)* 1.54 1.47 -4.5% -0.07 0.42 0.39

Cash flow from operating 171.7 164.6 -4.2% -7.1 64.5 68.7
activities
Investments in property, plant -63.4 -53.0 -16.4% 10.4 -13.5 -30.8
and equipment (CAPEX)
Free cash flow before 109.1 108.6 -0.5% -0.5 50.3 38.1
acquisitions/securities

* Undiluted earnings per share in relation to 67,552,638 shares

The interim financial report Q1-3 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, 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