EANS-News: Österreichische Post AG / AUSTRIAN POST Q1-3 2016: STABLE REVENUE DEVELOPMENT ADJUSTED FOR SALE OF TRANS-O-FLEX; EBIT UP 0.2%; OUTLOOK CONFIRMED

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9-month report

- Revenue

- Stable revenue development Q1-3 excl. former subsidiary trans-o-flex
(mail business -1.0%, parcel segment +3.5%)
- Revenue after sale of trans-o-flex of EUR 1,510.4m

- Earnings - EBIT of EUR 135.5m at the prior-year level (+0.2%) -
Quarterly development during the year impacted by election effects
and interest-bearing provisions (non-cash)

- Cash flow and balance sheet - 3.5% increase in the cash flow from
operating activities to EUR 158.9m - Conservative balance sheet
structure with strong cash position; equity ratio of 40.0%

- Outlook - Revenue forecast 2016 of EUR 2.0bn (current business
portfolio) remains unchanged - Targeted stable development of
operating earnings (EBIT) for 2016 and 2017

OVERVIEW OF AUSTRIAN POST

In the first nine months of 2016, Group revenue of Austrian Post
amounted to EUR 1,510.4m, compared to EUR 1,746.5m in the prior-year
period. The revenue deviation can be mainly attributed to the sale of
its former subsidiary trans-o- flex in April 2016. Adjusted for the
disposed company trans-o-flex, revenue remained stable compared to
the prior-year period.

The mail business, Austrian Post's largest business area, continues
to be impacted by the ongoing substitution of addressed letter mail
by electronic forms of communication. The Mail & Branch Network
Division showed a slight revenue decrease of 1.0% in the first three
quarters of 2016 to EUR 1,078.3m. In contrast, the trend towards
online shopping continued unabated in the parcel segment. Despite
intensified competition, Austrian Post succeeded in further
increasing parcel revenue in Austria. Adjusted for the revenue of the
former subsidiary trans-o-flex, the Parcel & Logistics Division
generated revenue growth of 3.5% in the first nine months of 2016.

Operating earnings (EBIT) of Austrian Post totalled EUR 135.5m, a
slight rise of 0.2% from the previous year. The disposal of the
subsidiary trans-o-flex as well as higher revenue contributions from
elections to the amount of EUR 3.0m had a positive effect on earnings
in a year-on-year comparison. This was in contrast to an increase of
EUR 12.8m in non-operational staff costs (including changes in
provisions related to a change in the discount interest rate)
compared to last year.

"Our top priority is to further strengthen Group profitability based
on an offering of innovative solutions and the ongoing expansion of
services for the benefit of our customers. At the same time, we are
continuing our efforts to optimise costs and enhance efficiency",
says Austrian Post CEO Georg Pölzl. "Accordingly, stability is our
primary objective, not only for 2016 but for 2017 as well. This
target applies to the development of revenue and earnings as well as
the investment and dividend policy of the Austrian Post Group."

REVENUE DEVELOPMENT IN DETAIL

In the first nine months of 2016, Group revenue of Austrian Post fell
to EUR 1,510.4m from the prior-year figure of EUR 1,746.5m due to the
sale of the subsidiary trans-o-flex. Adjusted in both years for the
disposed company trans- o-flex, revenue remained stable at EUR
1,375.5m (Q1-3 2015: EUR 1,376.7m).

Mail & Branch Network Division revenue was down 1.0% to EUR 1,078.3m
during the period under review. Third-quarter revenue fell by 2.8%
due to lower revenue contributions from elections than in the
prior-year period. Moreover, there was one calendar working day less
in a quarterly comparison. Revenue of the division's Letter Mail &
Mail Solutions segment amounted to EUR 584.5m in the first three
quarters of 2016, slightly below the prior-year level. The basic
trend towards the substitution of letters by electronic forms of
communication is continuing. This was in contrast to an additional
growth in international volumes. Revenue in the Direct Mail business
decreased by 2.3% to EUR 304.3m in the first nine months of 2016.
This development is primarily the result of the sale of mail
subsidiaries in Hungary and Slovakia in the previous year as well as
the reduced advertising activities on the part of individual
customers. In contrast, the increase in international direct mail
volumes had a positive effect on revenue. Media Post revenue rose by
1.3% year-on-year to EUR 101.8m, which is particularly related to
various one-time mailings. Branch Services revenue fell to EUR 87.8m
in the first nine months of 2016, comprising a drop of 2.8% from the
previous year. The positive development of mobile products was offset
by a change in the corresponding invoicing model.

Reported revenue of the Parcel & Logistics Division totalled EUR
432.0m in the first nine months of 2016 due to the aforementioned
sale of the subsidiary trans-o-flex, compared to EUR 657.0m in the
previous year. Adjusted for the loss of trans-o-flex revenue, the
division actually generated a revenue increase of 3.5% in the first
three quarters of 2016 and 3.0% in the third quarter of the year 2016
against the backdrop of a competitive market environment. Business in
Austria (+3.6%) and in CEE markets (+2.9%) developed positively
despite tough competition, whereas Austrian Post disposed of its
German subsidiary trans-o- flex in April 2016.

EXPENSE AND EARNINGS DEVELOPMENT

Raw materials, consumables and services used decreased from EUR
546.0m to EUR 384.0m during the period under review, which is due to
the sale of trans-o-flex. However, the costs for services used
increased, particularly as a consequence of higher international
business volumes in the core business.

Austrian Post's staff costs amounted to EUR 784.8m in the first three
quarters of 2016, comprising a drop of 3.5% from the previous year.
The disposal of trans-o-flex reduced staff costs, whereas the
adjustment of the discount interest rate for various staff-related
provisions led to a negative earnings effect of EUR 19.6m in the
first nine months of 2016. The operational staff costs for salaries
and wages, which are part of total staff costs, were down 4.1% from
the prior-year level due to the sale of trans-o-flex. On balance, the
Austrian Post Group employed an average of 21,983 people (full-time
equivalents) in the first nine months of 2016, compared to 23,578
employees in the previous year. In addition to ongoing operational
staff costs, staff costs also encompass 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 in Austria. Total non-operational staff
costs (including changes in provisions relating to the revised
discount interest rate) in the first three quarters of 2016 were EUR
12.8m higher than in the previous year.

During the period under review, other operating income remained
stable at EUR 50.1m. The 15.8% decline in other operating expenses to
EUR 200.2m can be attributed to the disposal of the subsidiary
trans-o-flex.

On balance, earnings before interest, tax, depreciation and
amortisation (EBITDA) in the first three quarters of 2016 fell by
3.8% to EUR 191.8m. The corresponding EBITDA margin was 12.7%,
comprising an improvement of 1.3 percentage points from the
comparable prior-year level. Total depreciation, amortisation and
impairment losses in the reporting period amounted to EUR 56.3m, a
decrease of EUR 7.8m from the previous year. This difference is
mainly due to the disposal of trans-o-flex. An impairment loss on
goodwill for the subsidiary PostMaster s.r.l., Romania, to the amount
of EUR 2.0m had the opposite effect. On balance, earnings before
interest and tax (EBIT) in the first nine months of the 2016
financial year reached a level of EUR 135.5m, slightly higher than
the prior-year figure. The disposal of the subsidiary trans-o-flex as
well as higher revenue contributions from elections to the amount of
EUR 3.0m had a positive effect on earnings. This was in contrast to
an increase of EUR 12.8m in non-operational staff costs (including
changes in provisions related to a change in the discount interest
rate). The EBIT margin climbed from 7.7% to 9.0%.

From a divisional perspective, the Mail & Branch Network Division
generated an EBITDA of EUR 223.9m in the first nine months of 2016,
compared to EUR 232.5m in the previous year. EBIT of the division
amounted to EUR 197.6m, down from the prior-year figure of EUR
208.6m. This decline is mainly attributable to the negative effect of
EUR 7.1m compared to last year due to the parameter adjustment for
interest-bearing provisions. Moreover, the impairment loss on
goodwill for the Romanian subsidiary PostMaster s.r.l. to the amount
of EUR 2.0m in 2016 also contributed to this change.

EBITDA of the Parcel & Logistics Division in the first nine months of
2016 amounted to EUR 33.2m, compared to the prior-year level of EUR
32.4m. EBIT of the division improved from EUR 16.5m to EUR 24.7m due
to the disposal of trans- o-flex.

The Corporate Division (including Consolidation) accounts for all
non-allocable expenses for central departments in the Group as well
as staff-related provisions assigned to it. Moreover, the division
includes innovation management and the development of new business
models. EBIT of the Corporate Division improved by 3.3% to minus EUR
86.9m, although the aforementioned parameter adjustment for
interest-bearing staff-related provisions in the Corporate Division
reduced divisional earnings.

The other financial result fell to minus EUR 1.3m from plus EUR 2.6m
in the prior-year period. This decrease is mainly attributable to the
special effect totalling EUR 3.3m arising in March 2015 as a
consequence of the early termination of a cross-border leasing
transaction for various postal sorting facilities. Accordingly,
earnings before tax (EBT) in the first nine months of 2016 totalled
EUR 134.2m, compared to EUR 137.8m in the previous year. The income
tax expense at EUR 33.8m was at the prior-year level. After deducting
income tax, the Group's profit for the period (profit after tax)
amounted to EUR 100.5m, down from EUR 104.1m in the previous year.
Accordingly, undiluted earnings per share equalled EUR 1.49 for the
first three quarters of 2016 compared to the prior-year figure of EUR
1.54 per share.

CASH FLOW AND BALANCE SHEET

The gross cash flow totalled EUR 190.5m in the first three quarters
of 2016, compared to EUR 186.4m in the previous year. This increase
is primarily attributable to lower tax payments. The cash flow from
operating activities of EUR 158.9m was EUR 5.4m above the comparable
figure for the first nine months of 2015. In particular, the decline
in trade receivables had a positive effect, which offset the drop in
trade payables. The cash flow from investing activities reached a
level of minus EUR 56.9m in the first nine months of 2016, compared
to minus EUR 1.6m in the prior-year period. This decline was mainly
related to the positive effect in 2015 from 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. Cash outflows for the acquisition of property, plant and
equipment (CAPEX) amounted to EUR 56.3m in the first nine months of
2016, below the level of EUR 61.3m in the previous year. In
aggregate, the free cash flow before acquisitions/securities during
the reporting period reached a level of EUR 105.0m, down from EUR
158.3m in the previous year. The difference to the prior year is
related to the previously mentioned sale of Austrian Post's former
corporate headquarters in 2015. Adjusted to take account of this
special effect as well as the payments for the new corporate
headquarters, the operating free cash amounted to EUR 128.9m in the
first nine months of 2016, compared to the prior-year figure of EUR
112.0m.

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 596.3m as at September 30, 2016,
corresponding to an equity ratio of 40.0%. An analysis of the
financial position of the company shows a high level of current and
non-current financial resources of EUR 322.5m, including cash and
cash equivalents of EUR 261.5m as well as financial investments in
securities of EUR 61.1m. These financial resources contrast with
financial liabilities of only EUR 5.6m.

EMPLOYEES

The average number of employees (full-time equivalents) at the
Austrian Post Group totalled 21,983 people during the first nine
months of 2016, comprising a reduction of 1,595 employees from the
prior-year period. The decrease is primarily due to the disposal of
the German subsidiary trans-o-flex. Most of Austrian Post's staff,
17,562 full-time equivalents, is employed by the parent company
Österreichische Post AG.

OUTLOOK

The business operations of Austrian Post continued to develop in line
with expectations in the third quarter of 2016. As a result, the
outlook for the 2016 financial year remains unchanged. Accordingly,
on the basis of its current business portfolio, Austrian Post
continues to forecast revenue of EUR 2.0bn in the 2016 financial
year.

The volume of addressed letter mail continues to decrease steadily.
In contrast, the parcel business driven primarily by e-commerce is
showing a consistently positive development. Austrian Post still
anticipates volume declines of about 5% p.a. in the traditional
addressed mail business. The volume of direct mail will continue to
show a diverging development in the individual customer segments and
product groups. Overall strong market growth in the Parcel &
Logistics Division will be accompanied by intensified competition and
new, innovative customer solutions.

Austrian Post also confirms its earnings forecast for 2016. The
company expects to generate stable operating earnings in 2016 with
EBIT at the level of 2015 on the basis of current trends and
developments.

The top priority of Austrian Post is to further strengthen the
Group's profitability. On the revenue side, the focus is on offering
innovative solutions and continuously expanding the service offering
for the benefit of Austrian Post customers. As the leading provider
of postal services in Austria in terms of quality and innovative
strength, Austrian Post is continually upgrading its product offering
in the area of letter mail, direct mail, packets and parcels in a
customer-oriented manner.

At the same time, on the cost side, Austrian Post will continue along
its chosen path of modernisation and efficiency enhancement.
Accordingly, stability is the primary objective, not only for 2016
but for 2017 as well. This target applies to the development of
revenue and earnings as well as with respect to the Group's
investment and dividend policy.

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. With this in mind, operational capital expenditure
(CAPEX) of about EUR 70m is planned in 2016, focusing on sorting
technologies, logistics and customer solutions. Besides, the
construction of Austrian Post's new corporate headquarters in
Vienna's third district is continuing according to schedule and will
be completed in 2017. The current business and cash flow development
will also enable Austrian Post to adhere to its attractive dividend
policy.

KEY FIGURES

Change
EUR m Q1-3 2015* Q1-3 2016 % EUR m Q3 2015* Q3 2016
Revenue 1,746.5 1,510.4 -13.5% -236.2 571.6 439.3
Revenue excl.
trans-o-flex 1,376.7 1,375.5 -0.1% -1.2 446.3 439.3
thereof Mail & Branch
Network Division 1,089.5 1,078.3 -1.0% -11.2 351.5 341.6
thereof Parcel &
Logistics Division 657.0 432.0 -34.2% -225.0 220.1 97.7
Parcel & Logistics
Division excl.
trans-o-flex 287.2 297.2 3.5% 10.0 94.8 97.7
thereof Corporate 0.1 0.0 -69.7% -0.1 0.0 0.0
Other operating income 50.4 50.1 -0.5% -0.2 17.6 14.0
Raw materials, and
services used -546.0 -384.0 29.7% 162.0 -186.0 -97.7
Staff costs -813.6 -784.8 3.5% 28.8 -261.8 -239.5
Other operating
expenses -237.9 -200.2 15.8% 37.6 -81.9 -61.1
Results from financial
assets accounted for
using the equity method -0.2 0.3 >100.0% 0.5 0.0 -0.3

Earnings before interest, tax, depreciation and amortisation (EBITDA)
199.3 191.8 -3.8% -7.5 59.6 54.6 Depreciation,
amortisation and

impairments -64.1 -56.3 12.1% 7.8 -20.9 -17.8
Earnings before interest
and tax (EBIT) 135.2 135.5 0.2% 0.2 38.7 36.8
thereof Mail & Branch
Network Division 208.6 197.6 -5.3% -11.0 63.2 54.4
thereof Parcel &
Logistics Division 16.5 24.7 50.3% 8.3 4.0 7.8
thereof Corporate/
Consolidation -89.8 -86.9 3.3% 2.9 -28.4 -25.4
Other financial result 2.6 -1.3 <-100.0% -3.9 -0.8 -0.8
Earnings before tax (EBT) 137.8 134.2 -2.6% -3.6 38.0 36.1
Income tax -33.8 -33.8 0.1% 0.0 -11.3 -9.4
Profit for the period 104.1 100.5 -3.5% -3.6 26.7 26.7
Earnings per
share (EUR)** 1.54 1.49 -3.3% -0.05 0.39 0.39
Cash flow from operating
activities 153.6 158.9 3.5% 5.4 45.9 49.6
Investments in property,
plant and equipment
(CAPEX) -61.3 -56.3 8.1% 5.0 -29.3 -17.8
Free cash flow before
acquisitions/securities 158.3 105.0 -33.7% -53.3 20.6 33.0
Operating free
cash flow*** 112.0 128.9 15.0% 16.9 25.2 38.9

* The presentation of revenue in the Parcel & Logistics Division was
adjusted. Exported services are recognised according to the net
method (previously reported as revenue and expenses for services
used). ** Undiluted earnings per share in relation to 67,552,638
shares *** Free cash flow before acquisitions/securities and other
cash flow from investing activities

The interim financial report Q1-3 2016 is available on the Internet
at www.post.at/ir --> Publications --> Financial Reports.

Further inquiry note:
Österreichische Post AG
DI Harald Hagenauer
Leitung Investor Relations, Konzernrevision & Compliance
Tel.: +43 (0) 57767-30400
harald.hagenauer@post.at

Österreichische Post AG
Mag. Ingeborg Gratzer
Leitung Presse & Interne Kommunikation
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

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