EANS-News: Österreichische Post AG / AUSTRIAN POST IN 2016: STABLE REVENUE AND HIGHER EBIT

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annual result

- Revenue remained stable (excl. trans-o-flex)

- Mail & Branch Network -1.6%: partially offsetting the ongoing substitution
of letter mail
- Parcel & Logistics +3.9%: growth despite intensified competition
- Reported Group revenue of EUR 2,030.5m

- Earnings up once again
- EBIT at EUR 202.3m above prior-year operating earnings (+2.2%)
- Net earnings per share of EUR 2.26

- Record dividend and employee profit-sharing bonus

- Proposal to the Annual General Meeting:
dividend of EUR 2.00 per share (+2.6%)
- Employee bonus at all-time high of EUR 853

- 2017: setting the direction for future viability
- New customer solutions: e-Letter, shöpping, expansion of self-service zones,
digital offerings
- Outlook: stable development of operating earnings (EBIT) also targeted for
2017

Austrian Post showed a very satisfactory development in the 2016
financial year. In spite of difficult conditions, Group revenue
(adjusted for the disposed German subsidiary trans-o-flex) remained
stable at a high level. Operating earnings were also gratifying
against the backdrop of a challenging market environment. EBIT
improved by 2.2% to EUR 202.3m. The profit for the period reached EUR
152.7m, corresponding to undiluted earnings of EUR 2.26 per share.
"In spite of a challenging market environment and increased
competition, we once again succeeded in positively developing the
company. The resolute continuation of our strategy and the commitment
of our employees played an important role in this", says Georg Pölzl,
CEO of Austrian Post.

MAIL REVENUE HELD UP WELL - FURTHER INCREASE IN PARCEL REVENUE The
Mail & Branch Network Division succeeded in partially offsetting the
structurally related decline in mail volumes. On balance, revenue of
the division only fell slightly by 1.6%. The company continued the
expansion of its self-service offering in the branch network, and
offered around 335 self-service zones to customers at the end of
2016. In the Parcel & Logistics Division, Austrian Post managed to
successfully withstand intensive competition and generate revenue
growth of 3.9% (excl. the former subsidiary trans-o-flex). The
outstanding logistics and service quality of Austrian Post served as
the basis for the renewed volume increase on the Austrian parcel
market, from 80m to 81m parcels.

FOCUS ON NEW CUSTOMER SOLUTIONS "In 2017 we are aiming for an even
more customised response to fulfil individual customer preferences
for delivery on the basis of an improved service offering. We are
continuously investing in innovative customer solutions and service
upgrades. The launch of a completely new product, the 'Packet',
enables us to specifically respond to customer needs on the
fast-growing e-commerce market, and create a sleek and quick solution
for small online orders", Austrian Post CEO Georg Pölzl states.
February 27, 2017 marked the launch of the new e-Letter i.e. a secure
digital form of delivery. Thanks to this cost-free service for
recipients, all important documents are collected and then deposited
in an e- letterbox for customers. Austrian Post will soon facilitate
the retail presence on the Internet starting on April 5, 2017 on the
basis of its new "shöpping" marketplace. The shöpping platform should
become a business hub for domestic retailers and consumers thanks to
its broad product range and the typical delivery quality ensured by
Austrian Post.

RECORD DIVIDEND AND EMPLOYEE PROFIT-SHARING BONUS On the basis of a
strong cash flow and a solid balance sheet, Austrian Post will
propose that the Annual General Meeting scheduled for April 20, 2017
approve distribution of a dividend of EUR 2.0 per share (2015: EUR
1.95). In this way, the company once again underlined its positioning
as a reliable and predictable investment. Austrian Post employees are
also benefitting from the business results. Over the last 15 years,
Austrian Post has implemented a voluntary employee profit-sharing
bonus scheme. This year eligible employees will receive for 2016 the
highest amount ever paid since this initiative was launched, namely a
gross bonus of EUR 853 (2015: EUR 832). The Austrian Post Group
employs 21,695 people, including 17,448 at Österreichische Post AG.

OUTLOOK 2017: STABLE DEVELOPMENT TARGETED The mail and parcel markets
have been shaped by two ongoing trends in recent years which are
continuing. Volumes of addressed mail are declining, whereas parcel
volumes especially to private customers are rising, driven by
increasing online orders. Volume declines of about 5% p.a. are
expected in the traditional addressed letter mail business. The
volume of direct mail will continue to show a diverging development
in the individual customer segments and product groups. "On the basis
of the aforementioned volume trends as well as the resolute
implementation of the initiated measures to promote customer
orientation and innovation, Austrian Post will strive to maintain
Group revenue at a stable level in 2017", Pölzl says, adding: "We
will resolutely continue along our chosen path with respect to
efficiency and the cost structure. Investments are planned, and at
the same time we will move ahead with improving service and expanding
capacities." On the basis of existing volume and revenue forecasts
and the continuation of efficient supply of services, Austrian Post
aims to generating a stable operating EBIT in the 2017 financial year
at the same level as in the 2016 financial year (2016 EBIT: EUR
202.3m).

The entire version of the outlook as well as detailed information
(excerpts) from the Group Management Report can be found following
the key figures table. The complete Financial Report 2016 is
available at www.post.at/ir--> Reporting.

KEY FIGURES

Change
2015/2016
EUR m 2015 2016 % EUR m Q4 2015 Q4 2016
Revenue excl.
trans-o-flex 1,903.9 1,895.6 -0.4% -8.2 527.1 520.1
Revenue 2,401.9 2,030.5 -15.5% -371.5 655.4 520.1
thereof Mail

& Branch Network Division 1,501.7 1,478.0 -1.6%
-23.7 412.2 399.6 thereof Parcel & Logistics Division
900.2 552.5 -38.6% -347.7 243.2 120.5 Parcel
& Logistics Division excl.

trans-o-flex 402.1 417.6 3.9% 15.5 114.9 120.5
thereof Corporate/
Consolidation 0.1 0.0 -56.2% -0.1 0.0 0.0
Other operating
income 99.2 70.1 -29.3% -29.1 48.8 20.0
Raw materials,
consumables
and Services used -749.6 -495.2 33.9% 254.4 -203.6 -111.2
Staff costs -1,106.0 -1,035.2 6.4% 70.8 -292.3 -250.4
Other operating
expenses -344.0 -277.3 19.4% 66.7 -106.1 -77.1
Results from

financial assets accounted for using the equity method
1.1 -15.8 <-100% -17.0 1.3 -16.1 Earnings
before interest, tax, depreciation and amortisation

(EBITDA) 302.7 277.1 -8.5% -25.7 103.4 85.3
Depreciation &
amortisation -85.0 -72.6 14.6% 12.4 -21.0 -18.3
Impairment losses -128.7 -2.3 98.2% 126.4 -128.6 -0.3
Earnings before
interest and

tax (EBIT) 89.0 202.3 >100% 113.2 -46.2
66.8 thereof Mail & Branch Network Division 284.7
285.1 0.1% 0.3 76.1 87.4 thereof Parcel &
Logistics

Division -105.4 18.5 >100.0% 123.9 -121.9 -6.3
thereof Corporate/
Consolidation -90.3 -101.3 -12.2% -11.0 -0.5 -14.4
Operating EBIT 198.0 202.3 2.2% 4.3 62.8 66.8
Other financial
result 2.0 -0.7 <-100% -2.7 -0.6 0.5
Earnings before tax
(EBT) 91.0 201.5 >100% 110.5 -46.8 67.3
Income tax -19.5 -48.8 <-100% -29.3 14.3 -15.0
Profit for the
period 71.6 152.7 >100% 81.2 -32.5 52.3
Earnings per

share (EUR)* 1.06 2.26 >100% 1.20 -0.48
0.62 Cash flow from operating activities 216.2 223.6
3.4% 7.4 62.6 64.6 Investments in property, plant
and equipment (CAPEX) -104.7 -103.3 1.3%
1.4 -43.4 -47.0 Operating free cash flow before
acquisitions/ securities (before old/

new headquarters) 160.5** 156.8 -2.3% -3.6 28.6 25.5

* Undiluted earnings per share in relation to 67,552,638 shares
** Excluding tax payments of EUR 9.2m in connection with the sale of the former
corporate headquarters

EXCERPTS FROM THE GROUP MANAGEMENT REPORT:

REVENUE DEVELOPMENT IN DETAIL In the 2016 financial year, reported
Group revenue of Austrian Post fell by EUR 371.5m compared to the
previous year to EUR 2,030.5m. This decline is mainly attributable to
the sale of the subsidiary trans-o-flex in April 2016. The company
contributed revenue of EUR 134.8m in 2016, in contrast to the revenue
of EUR 498.1m generated in 2015. Adjusted for the disposed company
trans-o-flex in both years, revenue remained stable in a year-on-year
comparison at EUR 1,895.6m. The Parcel & Logistics Division,
excluding trans-o-flex, generated a revenue increase of 3.9% in 2016,
whereas revenue of the Mail & Branch Network Division fell by 1.6% in
the same period.

Revenue of the Mail & Branch Network Division could be maintained at
a good level in spite of the negative volume development. The overall
decline of 1.6% to EUR 1,478.0m in 2016 was due to the ongoing
electronic substitution of letter mail, a change in the invoicing
model for mobile products and the sale of two mail subsidiaries in
CEE in 2015 (negative effect of EUR 3.8m). In contrast, the higher
revenue contribution from elections at the amount of around EUR 8m
had a positive effect.

In the 2016 financial year, Letter Mail & Mail Solutions revenue at
EUR 801.3m fell slightly by 0.9% compared to the prior-year level.
The basic trend towards the substitution of letters by electronic
forms of communication continued. In contrast to 2015, the higher
contributions from elections and the increased number of
international e-commerce shipments positively impacted revenue
development. Revenue in the Direct Mail business fell by 2.8% in the
reporting period to EUR 416.7m. This development is primarily due to
the differing advertising activities on the part of individual
customer groups. This business area is influenced by the overall
economic environment and is subsequently subject to greater
fluctuations. Revenue was negatively affected by EUR 3.0m through the
sale and deconsolidation of two mail subsidiaries in Hungary and
Slovakia. In contrast, the increase in international addressed and
unaddressed direct mail volumes as well as elections had a positive
effect on revenue. Media Post revenue rose by 0.6% in 2016 to EUR
141.6m. This is particularly related to various one-time mailings.
Branch Services revenue at EUR 118.4m represents a decrease of EUR
5.4m from the previous year. However, this difference is due to a
change in the invoicing model for mobile products totalling EUR 8.6m
in contrast to the decline in the corresponding expense item.
Adjusted for this effect, revenue actually increased, which was
mainly due to higher sales volumes for mobile products.

Total revenue of the Parcel & Logistics Division fell by EUR 347.7m
in 2016 to EUR 552.5m due to the aforementioned sale of the
subsidiary trans-o-flex. Adjusted to take account of trans-o-flex
revenue, the division actually generated a revenue increase of 3.9%
against the backdrop of intense competition. From a regional
perspective, 61.9% of total revenue in the Parcel & Logistics
Division was generated in Austria in 2016, compared to 23.9% in
Germany and 14.3% by the subsidiaries in South East and Eastern
Europe. Business in Austria developed well against the backdrop of
intensified competition, expanding by 1.3%. The markets in South East
and Eastern Europe also showed growth of 2.7%.

EXPENSE AND EARNINGS DEVELOPMENT Raw materials, consumables and
services used fell from EUR 749.6m to EUR 495.2m during the reporting
period, which is due to the sale of trans-o-flex. However, costs for
services used increased, particularly as a consequence of expanded
parcel volumes in the core business.

Austrian Post's staff costs amounted to EUR 1,035.2m in 2016,
comprising a drop of EUR 70.8m from the previous year. This
development was mainly the result of the sale of trans-o-flex. On a
like-for-like basis excluding trans-o-flex, total staff costs fell by
1.6% or EUR 16.5m, which was mainly due to the resolute continuation
of measures to enhance efficiency and improve the staff structure.
Moreover, various legal changes during the period under review led to
a positive effect.

In addition to ongoing operational staff costs, staff costs also
encompass various non-operational items 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. These costs remained largely stable compared to 2015. The
adjustment of the interest rate for various staff-related provisions
led to a negative earnings effect of EUR 14.1m in 2016, whereas the
lower allocations to provisions for social plans, employee
under-utilisation, the voluntary transfer of employees to the federal
public service and various restructuring provisions had an overall
positive effect.

The results of the financial assets accounted for using the equity
method amounted to minus EUR 15.8m in 2016 compared to plus EUR 1.1m
in 2015. The change in reporting for the stake held in Aras Kargo a.
s. to a financial asset (previously a financial asset accounted for
using the equity method) negatively impacted earnings to the amount
of EUR 16.7m. This can be mainly attributed to the related
requirement to recognise the currency translation reserves in profit
and loss.

On balance, earnings before interest, tax, depreciation and
amortisation (EBITDA) of Austrian Post in the 2016 financial year
totalled EUR 277.1m, compared to EUR 302.7m in the previous year.
Earnings in 2015 included a positive net effect of EUR 23.0m from
claims related to non-wage costs paid in previous periods less any
compensation payments. The EBITDA margin of the Austrian Post Group
rose from 12.6% to 13.6%.

Earnings before interest and tax (EBIT) in 2016 amounted to EUR
202.3m, following a reported EBIT of EUR 89.0m in the previous year.
However, total impairment losses of EUR 131.9m were recognised in
2015, as previously mentioned, primarily in connection with the
subsidiary trans-o-flex, as well as the aforementioned positive net
effect of EUR 23.0m. Adjusted for these special effects, operating
EBIT in 2015 actually amounted to EUR 198.0m. Adjusted for the
special effects recognised in 2015, operating EBIT in 2016 rose by
2.2%, and the EBIT margin improved from 8.2% to 10.0%.

Earnings before tax (EBT) in 2016 totalled EUR 201.5m, compared to
the prior- year figure of EUR 91.0m. The reported net earnings in the
year 2015 were mainly burdened by the aforementioned special effects.
The income tax expense amounted to EUR 48.8m, up from EUR 19.5m in
2015. After deducting income tax, the Group's profit for the period
(profit after tax) was EUR 152.7m, compared to EUR 71.6m in the
prior-year period. Accordingly, undiluted earnings per share equalled
EUR 2.26 for the 2016 financial year, compared to EUR 1.06 per share
in the previous year. Adjusted for the previously described special
effects, profit for the period in 2015 was EUR 142.2m, or earnings
per share of EUR 2.10.

The Mail & Branch Network Division showed a largely stable earnings
development in the 2016 financial year despite the revenue decline,
which was the result of strict cost discipline. EBITDA of the
division was EUR 319.7m, compared to EUR 322.9m in 2015. Divisional
EBIT remained stable at EUR 285.1m. In 2015, an impairment loss on
goodwill of EUR 6.1m was recognised for the subsidiary in Romania,
whereas 2016 included an impairment loss on goodwill of EUR 2.0m for
the same company.

The Parcel & Logistics Division generated an EBITDA of EUR 29.8m in
2016, down from EUR 37.9m in the 2015 financial year. The change in
reporting for the stake held in Aras Kargo a. s. to a financial asset
(previously a financial asset accounted for using the equity method)
negatively impacted earnings to the amount of EUR 16.7m. This can be
mainly attributed to the related recognition of the currency
translation reserves in profit and loss. EBIT of the division in the
2016 financial year totalled EUR 18.5m compared to minus EUR 105.4m
in the previous year. In 2015, Austrian Post recognised impairment
losses of EUR 125.8m in connection with the subsidiary trans-o-flex.
Adjusted for the aforementioned effects, operating EBIT of the Parcel
& Logistics Division in 2016 improved to EUR 35.2m from EUR 20.4m in
2015, which is mainly attributable to the disposal of the former
subsidiary trans-o-flex.

The Corporate Division (including Consolidation) encompasses all
non-allocable expenses for central departments in the Group assigned
to it as well as staff- related provisions. In addition, the division
encompasses innovation management and the development of new business
models. EBIT of the Corporate Division fell from minus EUR 90.4m to
minus EUR 101.3m, due the positive net effect of EUR 23.0m in the
previous year from claims related to non-wage costs paid in previous
periods. Positive effects on staff costs were reported in 2016 due to
various legal changes.

CASH FLOW AND BALANCE SHEET The cash flow from operating activities
of EUR 223.6m was EUR 7.4m higher than in the previous year. The
increase was mainly the result of the decline in trade receivables as
well as the lower provisions and trade payables.

The cash flow from investing activities reached a level of minus EUR
105.1m in 2016 compared to the prior-year level of minus EUR 49.0m.
This difference primarily resulted from the positive effect in 2015
relating 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 2015. Cash outflows for the
acquisition of property, plant and equipment (CAPEX) amounted to EUR
103.3m, slightly below the figure of EUR 104.7m in the previous year.
CAPEX included investments of EUR 33.5m for the construction of
Austrian Post's new corporate headquarters.

The operating free cash flow before acquisitions/securities (before
old/new corporate headquarters) amounted to EUR 156.8m in the 2016
financial year, compared to EUR 160.5m in 2015. This provides a good
foundation for Austrian Post's ability to finance investments and
dividends in the future.

Austrian Post pursues a conservative balance sheet and financing
structure. This is primarily 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 amounted to EUR 670.0m as at December 31, 2016,
corresponding to an equity ratio of 43.5%. The analysis of the
company's financial positions shows a high level of financial
resources. This includes cash and cash equivalents of EUR 277.8m and
securities of EUR 60.9m. These financial resources are in contrast to
financial liabilities of only EUR 5.6m.

OUTLOOK 2017 The mail and parcel markets have been shaped by two
ongoing trends in recent years. Volumes of addressed mail are under
pressure on both a national and international level, whereas parcel
volumes to private customers are rising, driven by increasing online
orders. The volume forecasts of Austrian Post assume that the basic
trends impacting volume developments will continue. The company
anticipates volume declines of about 5% p. a. in the traditional
addressed letter mail business. The volume of direct mail will
continue to show a diverging development in the individual customer
segments and product groups. In contrast, online orders are expected
to result in a further increase in Austrian Post's parcel volumes,
but the company faces intense competition on the parcel market.

An improved service offering should enable Austrian Post to respond
more individually to specific customer preferences in delivery in
2017. Austrian Post offers a broad range of letter and direct mail
products with various value-added services in physical and electronic
form. It fulfils a variety of speed requirements in the parcel
business, including same-day delivery. It continuously improves
services to make it easier and more comfortable for customers to
receive and send parcels. With the launch of the "Packet", a
completely new product, Austrian Post specifically caters to customer
demands in the fast-growing e-commerce market by creating a sleek and
quick solution for small parcel sizes in online retailing.

On the basis of the aforementioned volume trends as well as the
resolute implementation of the initiated measures to promote customer
orientation and innovation, Austrian Post will strive to maintain
Group revenue at a stable level (2016 revenue of EUR 1.9bn excluding
trans-o-flex). In order to continue the successful long-term
positioning of the company, the focus will be on strengthening
Austrian Post's quality leadership in core markets, simultaneously
exploiting opportunities in growth markets such as transnational mail
volumes or online solutions. In this regard, key issues will be on
the further development of the infrastructure with respect to
logistics operations and postal service points. Accordingly, it will
be essential to define customer needs relating to future postal and
financial services in order to design a sustainably viable branch
network.

Austrian Post will continue along its chosen path with regard to
efficiency and the cost structure. Investments designed to further
enhance the efficiency of business operations and optimise process
and staff costs are planned. At the same time, the company will
continue with service improvements and capacity expansion measures in
growth areas. With this in mind, operational capital expenditure
(CAPEX) of EUR 70-80m is planned for sorting technologies, logistics
and customer solutions. Moreover, construction of the new corporate
headquarters in Vienna's third district is moving ahead on schedule,
and will be completed in the fall of 2017. On the basis of existing
volume and revenue forecasts and the continuation of efficient supply
of services, Austrian Post aims to generate stable operating EBIT in
the 2017 financial year at the same level as in the year 2016 (2016
EBIT: EUR 202.3m).

The Management Board will propose to the Annual General Meeting
scheduled for April 20, 2017 to approve the distribution of a
dividend amounting to EUR 2.00 per share for the 2016 financial year.
Thus, the company is once again continuing its attractive and
predictable dividend policy on the basis of a solid balance sheet
structure and the generated cash flow. Austrian Post adheres to its
objective of distributing at least 75% of the Group's net profit to
its shareholders.

Further inquiry note:
Austrian Post
Ingeborg Gratzer
Head of Press Relations & Internal Communications
Tel.: +43 (0) 57767-32010
ingeborg.gratzer@post.at

Austrian Post
Harald Hagenauer
Head of Investor Relations, Group Auditing & Compliance
Tel.: +43 (0) 57767-30400
harald.hagenauer@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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