EANS-News: Österreichische Post AG / AUSTRIAN POST Q1-3 2015: STABLE BUSINESS DEVELOPMENT WITH A RISE IN REVENUE AND EARNINGS

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9-month report

- Revenue - Revenue increase of 1.1% to EUR 1,752.3m - Higher
revenue in both the mail business (+0.4%) and the parcel segment
(+2.5%) - Earnings - EBIT up 2.0% to EUR 135.2m - Earnings per
share rise to EUR 1.54 - Cash flow and balance sheet - Free cash
flow above the prior-year period - Strong cash position and low
level of financial liabilities - Outlook - Aim to achieve revenue
growth of 1-2% in 2015 - EBITDA margin remains around 12%

OVERVIEW OF AUSTRIAN POST In the first three quarters of 2015,
revenue of the Austrian Post Group totalled EUR 1,752.3m, comprising
a rise of 1.1% from the prior-year level. Both the parcel segment and
mail businesses generated growth at 2.5% and 0.4% respectively. In
spite of this slight revenue increase in the mail business, the trend
towards electronic substitution of traditional letter mail by
electronic forms of communications is continuing. The volume decline
even accelerated somewhat in a year-on-year comparison. In turn,
business with direct mail showed a differentiated development of
individual customer segments during the period under review. The
volume of addressed direct mail items declined in contrast to the
rise in addressed mail volumes.

The trend towards increased e-commerce is continuing in the parcel
segment, leading to further growth of parcel volumes for private
customers in Austria. At the same time, it is evident that
competition is intensifying, a development the company is dealing
with by making ongoing investments at the customer interface. In
addition to its cost leadership, Austrian Post is also continuously
expanding its service leadership. "Today 90% of all parcels are
handed over to the intended recipients on the initial delivery
attempt, a top performance only made possible by our experienced and
well organised delivery operations. Our parcel service was recently
expanded to include Saturday delivery," emphasises CEO Georg Pölzl.
In addition, Austrian Post offers a series of innovative customer
solutions. 175,000 households already have access to convenient Post
pick-up boxes. Furthermore, customers have 24/7 access to about 300
self-service zones and 200 pick-up stations throughout the country.
The international parcel business continued to show a differentiated
development. Market trends positively impacting the business
operations of Austrian Post subsidiaries in South East and Eastern
Europe as well as Turkey continued, whereas the top priority of
trans-o-flex in Germany at the present time remains the
implementation of structural measures and network restructuring.
Austrian Post is simultaneously evaluating various strategic options
for its German parcel subsidiary.

Earnings before interest and tax (EBIT) of Austrian Post amounted to
EUR 135.2m in the first three quarters of 2015, up 2.0% from the
previous year. On an operational basis, measures designed to further
optimise costs and enhance efficiency were strictly continued,
including further investments in a modern vehicle fleet and new
sorting facilities. Cash flow remains at a high level against the
backdrop of an extensive investment programme, laying a firm
foundation for Austrian Post's ability to finance future investments
and dividends.

"On this basis, we remain committed to our strategic capital market
positioning as a dividend stock in the future, featuring a dividend
payout of at least 75% of the Group net profit", CEO Pölzl states.
"Looking ahead to the 2015 full-year results, we assume that the
basic trends in the mail and parcel businesses will continue, and
expect a rise in Group revenue in the range of 1-2%. At the same
time, we are striving to generate an EBITDA margin of around 12%,"
Pölzl adds. On the basis of the company's performance in the first
three quarters of 2015, Austrian Post is pursuing the objective of
once again equaling or slightly surpassing the prior-year's operating
result. A stable business development is targeted for 2016, although
the projected earnings range is somewhat broader due to the uncertain
market environment.

REVENUE DEVELOPMENT IN DETAIL In the first nine months of 2015, Group
revenue of Austrian Post rose by 1.1% from the prior-year level to
EUR 1,752.3m. Third-quarter Group revenue also increased 2.2% in a
year-on-year comparison.

Revenue of the Mail & Branch Network Division was up 0.4% in the
reporting period to EUR 1,089.5m. Third-quarter 2015 revenue was also
above the prior-year period, rising by 2.0%. The basic trend of
e-substitution i.e. the replacement of traditional letter mail by
electronic forms of communication is continuing. The upward
adjustment of postal rates as of March 1, 2015 had a positive effect.
On this basis, Letter Mail & Mail Solutions revenue at EUR 587.4m
climbed 1.2% from the previous year. Revenue in the Direct Mail and
Media Post business area fell by 0.7% to EUR 411.9m in the first nine
months of 2015. Individual customer segments showed a differentiated
development. In particular, the advertising activities of large
retail companies with unaddressed mail items developed positively in
the reporting period. In contrast, the business with addressed mail
items declined. Branch Services revenue at EUR 90.3m in the first
nine months of 2015 was at the prior-year level.

Total revenue of the Parcel & Logistics Division rose by 2.5% in the
first nine months of 2015 to EUR 662.7m. From a regional perspective,
55% of total revenue in the Parcel & Logistics Division was generated
in Germany in the first three quarters of the 2015 financial year,
compared to 36% in Austria and 9% by the subsidiaries in South East
and Eastern Europe. Revenue in Germany fell by 1.5% in the first nine
months of 2015, which is mainly due to lower diesel surcharges on
transport services. The challenging competitive situation and price
pressure in this market continue to be clearly perceptible. Revenue
in Austria rose by 7.7% in the first three quarters, driven by the
above-mentioned trend towards online shopping and against the
backdrop of more intensive competition. The subsidiaries in South
East and Eastern Europe posted a revenue increase of 8.4% on the
basis of significant volume increases despite high price pressure.

EXPENSE AND EARNINGS DEVELOPMENT Raw materials, consumables and
services used were up by 1.2% during the period under review, rising
to EUR 551.7m. Although the cost of materials declined, primarily as
a consequence of the lower fuel prices, the costs for services used
increased during the first three quarters of 2015 due to a rise in
transport expenditures driven by higher parcel volumes in Austria and
South East and Eastern Europe.

Austrian Post's staff costs amounted to EUR 813.6m in the first three
quarters of 2015, comprising a slight decline of 0.2% or EUR 1.8m.
The operational staff costs for salaries and wages included in this
amount were somewhat higher than in the previous year due to the
effects arising from the integration of distribution companies in
Germany. Apart from this, the stability of operational staff costs
shows that the continuing measures to improve efficiency and the
staff structure succeeded in compensating for inflation-related cost
increases. In addition to the ongoing operational staff costs, staff
costs also include various non-operational costs such as termination
benefits and changes in provisions, which are primarily related to
the specific employment situation of civil servants at Austrian Post.
Costs for termination benefits at EUR 22.2m during the period under
review were considerably higher than the prior-year level of EUR
17.3m. In addition, the introduction of new staff-related measures
for civil servants increased the allocation to employee provisions by
EUR 8.6m. Other changes in non-operational staff costs, including
provisions for employee under-utilisation, were offset by a positive
earnings effect related to adjustments to the parameters for
interest-bearing provisions.

Other operating income at EUR 50.4m during the period under review
was at the same level as in the previous year. At the same time,
other operating expenses climbed 8.0% to EUR 237.9m, which is also
due to increased expenditures on maintenance, communications and
consulting.

Earnings before interest, tax, depreciation and amortisation (EBITDA)
of Austrian Post fell slightly by 0.4% to EUR 199.3m. The
corresponding EBITDA margin was 11.4%. Total depreciation,
amortisation and impairment losses in the reporting period amounted
to EUR 64.1m, a drop of EUR 3.5m from the prior-year period, which
included an impairment loss on goodwill of EUR 4.9m for the Polish
subsidiary PostMaster Sp. z o.o. in the second quarter of 2014.
Accordingly, earnings before interest and tax (EBIT) in the first
nine months of 2015 reached a level of EUR 135.2m, a rise of 2.0% or
EUR 2.6m from the previous year. The EBIT margin was 7.7%.

The other financial result improved from minus EUR 2.4m to plus EUR
2.6m, mainly attributable to interest income of EUR 3.3m arising from
the early termination of a cross-border leasing transaction. The tax
charge was up EUR 3.4m to EUR 33.8m, which was primarily a result of
the increase in the planned tax rate related to changes in prevailing
tax regulations. After deducting income tax, the Group's profit for
the period amounted to EUR 104.1m, a year-on-year rise of 4.3%. This
corresponds to undiluted earnings per share of EUR 1.54 for the first
nine months of 2015.

From a divisional perspective, the Mail & Branch Network Division
generated an EBITDA of EUR 232.5m in the first three quarters of
2015, an increase of 4.2%. This rise is due to the discontinuation of
negative effects related to parameter adjustments for
interest-bearing provisions in the previous year as well as to strict
cost discipline and ongoing process optimisation measures. EBIT of
the division at EUR 208.6m increased by 6.7% or EUR 13.1m from the
previous year. This earnings increase is primarily related to the
prior-year's impairment loss of EUR 4.9m recognised for goodwill at
Austrian Post's Polish subsidiary PostMaster Sp. z o.o.

EBITDA of the Parcel & Logistics Division amounted to EUR 32.4m in
the first nine months of 2015, compared to EUR 34.2m in the previous
year. EBIT in the reporting period totalled EUR 16.5m, a drop of EUR
2.1m from the prior-year figure of EUR 18.5m. Earnings in Austria and
South East and Eastern Europe developed positively, whereas Austrian
Post is currently pushing ahead with structural changes and network
restructuring in Germany.

The Corporate Division (including Consolidation) essentially covers
central costs as well as various staff-related provisions. EBIT of
the Corporate Division fell by EUR 8.3m to minus EUR 89.8m. This
decline can primarily be attributed to the increase in other
operating expenses for maintenance, communications and consulting
which negatively impacted earnings mainly in the Corporate Division.
With respect to staff costs, expenditures arose as a result of
allocations to provisions for additional staff-related measures. In
contrast, a positive effect on staff costs was achieved with the
adjustment of the parameters for interest-bearing provisions.

CASH FLOW AND BALANCE SHEET Gross cash flow totalled EUR 186.4m in
the nine months of 2015, compared to EUR 207.2m in the previous year.
Cash flow from operating activities of EUR 153.6m was EUR 11.0m less
than in the prior-year period. This reduction is mainly due to higher
income tax payments in a year-on-year comparison, which was related
to sales of commercial properties and changes in tax regulations
(Austrian Tax Amendment Act).

Cash flow from investing activities reached a level of minus EUR 1.6m
in the first nine months of 2015, compared to minus EUR 43.9m in the
comparable prior-year period. This increase mainly related to the
sale of Austrian Post's former corporate headquarters in Vienna's
first district, for which the outstanding balance of the purchase
price of EUR 60.0m was paid in the first quarter of 2015. Cash
outflows for the acquisition of property, plant and equipment (CAPEX)
amounted to EUR 61.3m in the first nine months of 2015, above the
level of EUR 53.0m in the previous year. In aggregate, free cash flow
during the reporting period was EUR 152.0m, up from EUR 120.7m in the
previous year. Free cash flow before acquisitions/securities equalled
EUR 158.3m.

Austrian Post pursues a conservative balance sheet and financing
structure. This is demonstrated by the high equity ratio, low
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 669.3m as at September 30, 2015,
corresponding to an equity ratio of 41.4%. An analysis of the
financial position of the company shows a high level of financial
resources of EUR 342.7m, including cash and cash equivalents of EUR
286.1m as well as financial investments in securities of EUR 56.6m.
These financial resources are in contrast to financial liabilities of
only EUR 20.4m.

EMPLOYEES The average number of employees (full-time equivalents) at
the Austrian Post Group totalled 23,578 people during the first nine
months of 2015, comprising a reduction of 427 employees from the
prior-year period. Most of Austrian Post's staff or a total of 18,121
full-time equivalents is employed by the parent company
Österreichische Post AG.

OUTLOOK 2015 AND 2016 On the basis of the development of the mail and
parcel business in the first three quarters of 2015, Austrian Post
confirms its previously communicated revenue forecasts for the entire
year 2015. Group revenue should show a slightly positive development
during the rest of the year and rise by 1-2% from the comparable
level in the 2014 financial year. In 2016, the company also expects a
challenging mail market featuring a further decline in addressed mail
volumes, as well as a highly competitive parcel market. In addition
to current basic trends in the mail and parcel segments, the revenue
forecast for the 2016 financial year also depends on the potential
increase of the stake held by Austrian Post in the Turkish parcel
services provider Aras Kargo from 25% to 75%. Keeping these factors
in mind, annual revenue in 2016 could be in the range of minus 1% to
plus 5% compared to 2015.

In the mail business, the basic trend of e-substitution i.e. the
substitution of traditional letter mail by electronic forms of
communication is likely to continue, possibly resulting in further
volume declines. Based on the business development in the first nine
months of 2015, the drop in mail volumes in 2015 and in 2016 is
expected to be within the predicted range of minus 3-5%. The direct
mail business will continue to show a differentiated development in
the individual customer segments, with a decrease perceptible for
addressed direct mail items in particular.

The development of the Parcel & Logistics Division is impacted by
differing trends in the private and business parcel segments.
Considerable growth continues to be anticipated in the private
customer parcel segment due to the steadily growing online business.
At the same time, intensified competition is expected as a result of
the growth momentum in this market segment. In turn, this could
impact parcel prices and volumes and thus the company's business
development, especially in 2016. In contrast, subdued economic growth
prospects are unlikely to provide any impetus to the business parcel
segment. Furthermore, in particular the fierce competition is
negatively affecting the parcel and logistics business in Germany.

Austrian Post is continuously optimising its structures and processes
nationally and internationally in both its mail and parcel logistics
operations in order to further enhance efficiency in all the services
it provides. In addition to the use of modern technologies and
working time models in Austria, one focal point is the continuation
of the efficiency enhancement programme in the trans-o-flex Group,
entailing a reorganisation of process, distribution and staff
structures. At the same time, Austrian Post is currently evaluating
various strategic options for this company.

On balance, Austrian Post continues to pursue the goal of generating
an EBITDA margin of around 12.0% on a Group level for 2015. With
respect to its operating results, the company expects the prevailing
trend in the first nine months of the year to continue. For this
reason, Austrian Post pursues the objective of once again equaling or
slightly surpassing the prior-year's operating result. EBIT reported
by Austrian Post totalled EUR 197m in 2014, which featured both
positive and negative special effects: Earnings in 2014 increased by
EUR 62m due to the sale of the company's former headquarters, whereas
special effects relating to impairment losses and write-downs
correspondingly reduced earnings by EUR 58m. Opportunities and risks
related to special effects, for example for non-operational staff
costs or impairment losses, could also impact the company's earnings
situation in 2015. In 2016, Austrian Post will continue to target an
EBITDA margin of around 12%. The aim is to generate stable operating
results in 2016. However, the range of the earnings forecast is
somewhat broader due to the uncertain market environment.

The operating cash flow generated by Austrian Post will continue to
be used prudently and in a targeted manner to finance sustainable
efficiency increases, structural measures and future-oriented
investments. In this regard, total operational capital expenditures
(CAPEX) of about EUR 80m are planned in 2015, focusing on sorting
technologies, logistics and customer solutions. Furthermore, Austrian
Post began construction of its new corporate headquarters in Vienna's
third district, which is expected to be completed in 2017. A solid
cash flow development is anticipated for the entire year 2015. This
will enable Austrian Post to continue its attractive dividend policy,
with a dividend payout of at least 75.0% of the Group net profit.

KEY FIGURES

Change
EUR m Q1-3 2014 Q1-3 2015 % EUR m Q3 2014 Q3 2015
Revenue 1,732.7 1,752.3 1.1% 19.7 560.8 573.4
thereof Mail & Branch 1,085.7 1,089.5 0.4% 3.8 344.7 351.5
Network Division*
thereof Parcel & Logistics 646.4 662.7 2.5% 16.4 215.8 221.9
Division*
thereof Corporate* 0.6 0.1 -87,0% -0,5 0.2 0.0
Other operating income 50.1 50.4 0.5% 0.2 17.7 17.6
Raw materials, consumables and -545,4 -551,7 -1,2% -6,3 -182,6 -187,8
services used
Staff costs -815,4 -813,6 0.2% 1.8 -263,7 -261,8
Other operating expenses -220,2 -237,9 -8,0% -17,6 -76,5 -81,9
Results from financial assets
accounted for using the equity -1,5 -0,2 89.6% 1.4 -0,5 0.0
method
Earnings before interest, tax,
depreciation and amortisation 200.2 199.3 -0,4% -0,9 55.1 59.6
(EBITDA)
Depreciation, amortisation and -67,6 -64,1 5.2% 3.5 -21,3 -20,9
impairments
Earnings before interest and 132.6 135.2 2.0% 2.6 33.8 38.7
tax (EBIT)
thereof Mail & Branch 195.5 208.6 6.7% 13.1 56.7 63.2
Network Division
thereof Parcel & Logistics 18.5 16.5 -11,2% -2,1 6.4 4.0
Division
thereof Corporate/ -81.5 -89.8 -10,2% -8,3 -29,3 -28.4
Consolidation
Other financial result -2,4 2.6 >100% 5.0 -0,6 -0,8
Earnings before tax (EBT) 130.2 137.8 5.9% 7.7 33.2 38.0
Income tax -30,4 -33,8 -11,0% -3,4 -7,0 -11,3
Profit for the period 99.8 104.1 4.3% 4.3 26.2 26.7
Earnings per share (EUR)** 1.47 1.54 4.8% 0.07 0.39 0.39
Cash flow from operating 164.6 153.6 -6.7% -11.0 68.7 45.9
activities
Investments in property, plant -53.0 -61.3 -15.7% -8.3 -30.8 -29.3
and equipment (CAPEX)
Free cash flow before 108.6 158.3 45.8% 49.8 38.1 20.6
acquisitions/securities

* The presentation of revenue was adjusted so that cross-segment business
relationships among subsidiaries or between subsidiaries and Austrian Post are
no longer included in the revenue with third parties (formerly external sales).

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

The interim financial report Q1-3 2015 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

Ingeborg Gratzer
Head of Press Relations & Internal Communications
Tel.: +43 (0) 57767-32010
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