EQS-News: AUSTRIAN POST IN Q1 2022: Q1 2022 revenue and earnings below prior year as expected
EQS-News: Österreichische Post AG / Key word(s): Quarter Results
AUSTRIAN POST IN Q1 2022: Q1 2022 revenue and earnings below prior year as
expected
13.05.2022 / 07:30
The issuer is solely responsible for the content of this announcement.
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AUSTRIAN POST IN Q1 2022:
Q1 2022 revenue and earnings below prior year as expected
Parcel division in consolidation phase after lockdown momentum of previous
years – trend shift expected in H2
2022 earnings in the range of the last two years forecasted
Revenue
• Revenue decline of 7.1 % year-on-year to EUR 601.4m (–2.4 % excl.
Parcel Turkey)
• Mail –3.9 % to EUR 298.9m
• Parcel & Logistics –12.5 % to EUR 283.1m (–3.4 % excl. Parcel
Turkey)
• Retail & Bank +49.3 % to EUR 26.4m
Earnings
• EBITDA –17.9 % to EUR 81.2m
• EBIT –33.7 % to EUR 39.6m
• Earnings per share down from EUR 0.71 to EUR 0.46
Cash flow and balance sheet
• Operating free cash flow of EUR 72.1m
• Balance sheet total incl. bank99 of EUR 4.9bn
• Stable equity position of EUR 693.5m
Outlook 2022
• Targeted revenue level of the previous year (2021 revenue: EUR 2.5bn)
• H1 below high comparatives of the previous year, targeting for
catch-up in H2
• EBIT 2022 expected in the range between 2021 (EUR 205m) and 2020 (EUR
161m)
As previously announced, Austrian Post achieved a revenue and earnings
development in the first quarter of 2022 below the prior-year level.
Revenue in the first three months of 2022 amounted to EUR 601.4m, implying
a decline of 7.1 % from the first quarter of 2021. This decrease is
primarily attributable to the sharp depreciation of the Turkish lira.
Excluding the Turkish parcel business (subsidiary Aras Kargo), the revenue
decline equalled 2.4 %. Revenue of the Mail Division fell by 3.9 % to EUR
298.9m, in part due to the structural reduction of addressed letter mail
volumes but also as a result of the discontinuation of positive COVID-19
effects from special mailings in the previous year. Revenue of the Parcel
& Logistics Division was down by 12.5 % to EUR 283.1m, which can be mainly
attributed to the depreciation of the Turkish lira. Excluding the business
in Turkey, divisional revenue was down by 3.4 %. The Retail & Bank
Division developed positively, reporting a revenue increase of 49.3 % to
EUR 26.4m.
The negative revenue development, inflationary trends as well as the
pressure on the Turkish lira have also negatively impacted earnings.
EBITDA in the first quarter of 2022 fell from EUR 99.0m to EUR 81.2m
(–17.9 %) whereas earnings before interest and tax (EBIT) declined from
EUR 59.8m to EUR 39.6m (–33.7 %). The Mail Division reported an EBIT of
EUR 41.1m compared to EUR 45.5m in the prior-year quarter, whereas the
Parcel & Logistics Division generated an EBIT of EUR 17.4m, down from EUR
35.8m in the previous year, primarily related to the exchange rate
development of the Turkish lira. The Retail & Bank Division showed an EBIT
of minus EUR 10.7m in the period under review, compared to minus EUR 18.4m
in the first quarter of 2021 (+41.8 %).
The war in Ukraine indirectly impacts the business model of Austrian Post
as a consequence of intensifying inflation resultant from price increases
for energy and raw materials, as well as due to disrupted supply and value
chains. Inflationary pressure leads to increases in operating staff and
energy costs and also negatively affects consumer behaviour. “Austrian
Post is striving to making letter mail and parcel delivery services as
cost-efficient as possible by implementing extensive countermeasures.
Inflation adjustments will be made on the revenue side,” comments Austrian
Post CEO Georg Pölzl.
As 2022 progresses, deviation from the prior-year performance is expected
particularly in the first half of the year. Positive special effects of
2021 caused by lockdowns imply high benchmarks. A catch-up is targeted in
the second half of 2022. In spite of the difficult environment, Austrian
Post aims to achieve the highest possible level of revenue stability in
2022 (2021 revenue: EUR 2.5bn). However, the underlying prerequisite for
this forecast remains broad energy related as well as economic and
currency stability in the company’s markets. It is likely that
inflationary trends will set in not only in the short term but in the
long-term as well. From today’s perspective, Group EBIT should lie in the
range of the results reported in the last two years (EBIT 2021: EUR 205m,
EBIT 2020: EUR 161m). The ambition of the company is to get close to the
level of 2021.
The planned investment programme with focus on capacity expansion and
sustainability of Austrian Post will be continued. Individual investments
will be assessed in order to ensure meeting all profitability targets. “We
would like to assure our customers that we will be able to maintain our
highest level of operational performance and our outstanding service,” CEO
Georg Pölzl adds. “In this regard, the conversion of logistics processes
to enable climate-neutral delivery plays an important role,” CEO Pölzl
concludes.
You can find the complete version of the outlook as well as detailed
information (excerpts) from the Interim Report for the First Quarter of
2022 starting on page 4. The entire report is available on the Internet
under post.at/ir in the Reporting – Download Centre.
KEY FIGURES
Change
EUR m Q1 2021^1 Q1 2022 % EUR m
Revenue 647.0 601.4 –7.1 % –45.7
Mail 311.0 298.9 –3.9 % –12.1
Parcel & Logistics 323.7 283.1 –12.5 % –40.5
Retail & Bank 17.7 26.4 49.3 % 8.7
Corporate/Consolidation –5.3 –7.0 –33.2 % –1.8
Other operating income 22.2 28.4 27.8 % 6.2
Raw materials, consumables and services
used –185.6 –175.6 5.4 % 10.0
Expenses for financial services –1.0 –3.2 <-100 % –2.2
Staff costs –303.5 –288.0 5.1 % 15.5
Other operating expenses –80.5 –81.9 –1.8 % –1.4
Results from financial assets accounted
for using the equity method 0.2 0.2 –38.1 % –0.1
EBITDA 99.0 81.2 –17.9 % –17.7
Depreciation, amortisation and impairment
losses –39.2 –41.6 –6.2 % –2.4
EBIT 59.8 39.6 –33.7 % –20.2
Mail 45.5 41.1 –9.7 % –4.4
Parcel & Logistics 35.8 17.4 –51.3 % –18.4
Retail & Bank –18.4 –10.7 41.8 % 7.7
Corporate/Consolidation^2 –3.1 –8.2 <–100 % –5.1
Financial result 2.4 1.1 –54.0 % –1.3
Profit before tax 62.2 40.7 –34.5 % –21.5
Income tax –12.3 –10.2 16.8 % 2.1
Profit for the period 49.9 30.5 –38.9 % –19.4
Earnings per share (EUR)^3 0.71 0.46 –35.9 % –0.26
Gross cash flow 109.5^4 77.9 –28.8 % –31.6
Cash flow from operating activities 124.1 –20.6 <–100 % –144.6
CAPEX 18.3 23.6 28.8 % 5.3
Free cash flow 117.6 –38.4 <–100 % –156.0
Operating free cash flow^5 74.4 72.1 –3.0 % –2.2
^1 The presentation of financial services in the consolidated income
statement has been adjusted. Income from financial services is recognised
under revenue, while expenses from financial services are reported
separately (previously, income and expenses from financial services were
presented net under revenue).
^2 Includes the intra-Group cost allocation procedure
^3 Undiluted earnings per share in relation to 67,552,638 shares
^4 The presentation of the provision of financial services has been
adjusted. Interest from financial services were reported separately as
part of cash flows from operating activities.
^5 Free cash flow before acquisitions/securities/money market investments,
Growth CAPEX and core banking assets
Vienna, 13 May 2022
EXCERPTS FROM THE MANAGEMENT REPORT Q1 2022
REVENUE DEVELOPMENT IN DETAIL
In the first quarter of 2022, Austrian Post’s Group revenue decreased by
7.1 % year-on-year to EUR 601.4m. Without accounting for the Turkish
business (Parcel Turkey), the revenue decline amounted to 2.4 %. The Mail
Division reported a drop in revenue of 3.9 % in the first three months of
2022, whereas revenue of the Parcel & Logistics Division was down by 12.5
% or 3.4 % excluding the business in Turkey. In contrast, the Retail &
Bank Division developed positively, showing a 49.3 % revenue increase to
EUR 26.4m in the first three months of 2022.
The Mail Division has generated 49.1 % of total Austrian Post’s revenue in
the first quarter of 2022. The 3.9 % revenue decrease can be attributed to
structural decline of addressed letter mail volumes due to electronic
substitution, as well as to the discontinuation of positive COVID-19
effects from special mailings in the first quarter of the previous year.
Furthermore, the advertising business continues to be volatile. Direct
mail and media post volumes returned to normal in the current period under
review, whereas the prior-year quarter was negatively impacted by COVID-19
measures including store closings ordered by government authorities.
The Parcel & Logistics Division accounted for 46.5 % of Group revenue in
the reporting period. The parcel business in Austria and particularly in
Turkey was marked by a revenue decline, compared to further growth
achieved in Southeast and Eastern Europe. The Logistics Solutions business
showed an increase in revenue, which relates to a change in the reporting.
The Retail & Bank Division accounted for 4.4 % of divisional revenue in
the first three months of 2022, generating revenue of EUR 26.4m (+49.3 %).
In December 2021 the retail business of ING in Austria was acquired, which
in turn led to positive effects in the interest and commission income of
bank99.
Revenue of the Mail Division totalled EUR 298.9m in the first quarter of
2022, of which 62.8 % can be attributed to the Letter Mail & Business
Solutions area. Direct Mail accounted for 27.2 % of the total divisional
revenue, and Media Post had a 10.0 % share.
In the first quarter of 2022, Letter Mail & Business Solutions revenue
amounted to EUR 187.6m, implying a year-on-year decrease of 8.7 %. The
declining volume trend resulting from the substitution of letters by
electronic forms of communication continued. Letter mail volumes in the
prior-year quarter were impacted by lockdown measures. Letter mail volumes
fell by 4 % in the first quarter of 2022, so within the range of the last
years. Further development will also be impacted by the difficult
circumstances. Negative revenue effect is the discontinuation of special
mailings relating to COVID-19 measures. International letter mail also
showed a volume decline, whereas the Business Solutions area reported a
stable development.
Direct Mail revenue increased by 6.3 % to EUR 81.5m in the first three
months of 2022, compared to a decline of 8.6 % in the prior-year period.
The government-imposed store closings in response to COVID-19 had an
extremely negative effect on the advertising business in the previous
year. Increased volatility remains present.
Revenue from Media Post, i.e., the delivery of newspapers and magazines,
increased by 3.4 % year-on-year to EUR 29.8m. This increase can also be
primarily attributed to the weak first quarter of 2021 (–5.5 %).
Revenue disclosure in the Parcel & Logistics Division has been adjusted.
The revenue breakdown in parcel logistics now incorporates revenue
presentation on a regional basis along with additional logistics services.
First-quarter 2021 figures were adjusted accordingly.
Revenue of the Parcel & Logistics Division fell by 12.5 % in the first
quarter of 2022 to EUR 283.1m. This sharp decrease is mainly attributable
to the parcel business in Turkey (Parcel Turkey), which fell by 39.1 %
from the prior-year period to EUR 50.4m. In addition, a 19 % volume
decline compared to a strong first quarter of 2021, pressure on the
Turkish lira has negatively impacted Turkish parcel revenue in the Group
currency (euro).
Parcel Austria has also experienced a 6.8 % revenue decline in the first
quarter of 2022. Parcel volumes have now entered a phase of consolidation
following extraordinarily strong volume growth of 36 % in the prior-year
quarter.
The parcel business in Southeast and Eastern Europe (Parcel CEE/SEE)
continues to generate positive growth rates, with revenue up by 3.8 % to
EUR 42.4m in the first three months of 2022.
Revenue of the Logistics Solutions area (incl. Consolidation), which
performs special logistics services such as the transport of COVID-19 test
kits, climbed by 16.0 % to EUR 19.5m in the period under review. This
increase is due to a change in reporting. The positive special effects
relating to logistics services were down slightly in the current reporting
period.
Revenue of the Retail & Bank Division improved by 49.3 % in the first
quarter of 2022 to EUR 26.4m from EUR 17.7m in the prior-year period.
Branch Services revenue fell by 14.3 %, from EUR 10.5m in the first three
months of 2021 to EUR 9.0m in the current reporting period. Income from
Financial Services at the amount of EUR 17.4m in the first quarter of 2022
showed a strong increase due to the acquisition of the retail business of
ING in Austria. As of the beginning of May 2022, bank99 already has
245,000 customers.
EARNINGS DEVELOPMENT
The largest expense items in relation to Austrian Post’s Group revenue are
staff costs (47.9 %), raw materials, consumables and services used (29.2
%) and other operating expenses (13.6 %). 6.9 % can be attributed to
depreciation, amortisation and impairment losses and 0.5 % to expenses for
financial services.
Staff costs in the first quarter of 2022 totalled EUR 288.0m, implying a
decline of 5.1 % or EUR 15.5m. Operational staff costs remained stable
compared to the prior-year period. The Austrian Post Group employed an
average of 27,239 people (full-time equivalents) in the first three months
of 2022 compared to the average of 27,541 employees in the prior-year
period (–1.1 %). In addition to operational staff costs, staff costs of
Austrian Post also include various non-operating staff-related expenses
such as severance payments and changes in provisions, which are primarily
related to the specific employment situation of civil servant employees at
Austrian Post. Non-operating staff costs in the first quarter of 2022
contained a lower level of expenses than in the comparable prior-year
quarter.
Raw materials, consumables and services used were down by 5.4 % to EUR
175.6m. This decline is mainly due to the currency translation of the
Turkish lira, which resulted in lower expenses in euro year-on-year. At
the same time, higher fuel and energy costs as well as transport services
performed by external service providers had the opposite effect.
Other operating income increased by 27.8 % to EUR 28.4m and is mainly
attributed to COVID-19 related reimbursements from the Austrian Federal
Government in connection with sick leaves of employees. Other operating
expenses increased by only 1.8 % to EUR 81.9m.
EBITDA amounted to EUR 81.2m in the first quarter of 2022, comprising a
decrease of 17.9 % year-on-year from EUR 99.0m. This implies an EBITDA
margin of 13.5 %. Depreciation, amortisation and impairment losses
amounted to EUR 41.6m in the first three months of 2022, implying an
increase of 6.2 % year-on-year or EUR 2.4m. The increase is mainly due to
investments in new sites for the parcel logistics infrastructure. Group
EBIT amounted to EUR 39.6m in the first quarter of 2022, compared to EUR
59.8m in the previous year. The EBIT margin amounted to 6.6 %.
The Group’s financial result of EUR 1.1m was below the prior-year figure
of EUR 2.4m. As a consequence, after deducting the income tax of EUR
10.2m, the profit for the period for the first three months of 2022 fell
to EUR 30.5m from EUR 49.9m in the first quarter of 2021. This implies
undiluted earnings per share of EUR 0.46 compared to EUR 0.71 in the
prior-year period.
EARNINGS BY DIVISON
Group EBIT in the first quarter of 2022 declined from EUR 59.8m to EUR
39.6m and was influenced by less favourable volume developments following
the positive special effects in the previous year. In particular, negative
macroeconomic factors such as the pressure on the Turkish lira impacted
earnings in the first quarter of 2022.
From a divisional perspective, the Mail Division achieved an EBIT of EUR
41.1m in the first quarter of 2022, down from EUR 45.5m in the previous
year. The revenue decline in the period under review could be partially
offset by countermeasures on the cost side.
The Parcel & Logistics Division generated an EBIT of EUR 17.4m in the
first quarter of 2022, down from EUR 35.8m in the prior-year quarter. This
corresponds to a year-on-year decrease of EUR 18.4m. Due to an
extraordinary tailwind in the parcel business in the first quarter of 2021
as well as lockdowns, parcel volumes in Austria has increased by more than
70 % from the first quarter of 2019 to the first quarter of 2021. For this
reason, a consolidation effect was already expected, as reflected in the 9
% decline year-on-year in parcel volumes in the first quarter of 2022. The
sharp depreciation in value of the Turkish lira in the second half of 2021
also impacted earnings and led to lower revenue and earnings contribution
of the Turkish subsidiary in euro. Although revenue of the still
profitable Turkish subsidiary increased by 7.1 % when denominated in the
local currency (TRY), its conversion into euro has resulted in a 39.1 %
decrease.
The Retail & Bank Division recorded an EBIT of minus EUR 10.7m in the
first quarter of 2022, compared to minus EUR 18.4m in the previous year.
Accordingly, the earnings amounted to 41.8 % or EUR 7.7m. Supported by the
acquisition of the ING retail business in Austria, the financial services
business is on a positive earnings trend.
The EBIT of the Corporate Division (incl. Consolidation and intra-Group
cost allocation procedure) changed from minus EUR 3.1m to minus EUR 8.2m.
The Corporate Division provides non-operating services which are essential
for the purpose of administration and financial control of the company. In
addition to conventional corporate governance tasks, these services
include the management and development of commercial properties not
required for operations, the management of significant financial
investments, the rendering of IT services, the development of new business
models and the administration of the Internal Labour Market of Austrian
Post.
CASH FLOW AND BALANCE SHEET
Austrian Post relies on operating free cash flow as a key indicator to
assess the financial strength of its operating business and to cover the
dividend for the financial year. Excluding the change in core banking
assets, the operating free cash flow totalled EUR 72.1m in the current
reporting period compared to EUR 74.4m in the first quarter of 2021. Cash
flow from financing activities came to minus EUR 85.2m in the first three
months of 2022, compared to minus EUR 42.1m in the previous year.
Austrian Post relies on a solid balance sheet and financing structure.
Total assets amounted to EUR 4,885.1m as at 31 March 2022. On the asset
side, property, plant and equipment at EUR 1,202.2m constitute one of the
largest balance sheet items and included right-of-use assets in connection
with leases of EUR 329.0m. In addition, there were intangible assets and
goodwill from company acquisitions, which were reported at EUR 138.0m as
at 31 March 2022. The balance sheet showed receivables totalling EUR
379.5m, other financial assets amounted to EUR 32.9m as at 31 March 2022.
Financial assets from financial services totalled EUR 2,831.0m at the end
of the first quarter of 2022 and result primarily from the business
activities of bank99.
On the equity and liabilities side of the balance sheet, equity of
Austrian Post Group amounted to EUR 693.5m as at 31 March 2022 (implying
an equity ratio of 14.2 %). The pro forma equity ratio (bank99 accounted
for using the equity method) equalled 32 % at the end of March 2022.
Provisions of EUR 683.1m are shown on the equity and liabilities side at
the end of March 2022, trade and other payables totalling EUR 500.8m.
Financial liabilities from financial services of EUR 2,675.7m result from
business activities of bank99 (deposit and investment business of bank99
customers).
OUTLOOK FOR 2022
The beginning of 2022 confirmed the emerging trends. Supply bottlenecks
and delays in the global value chain took place. In turn, this laid the
foundation for rising inflation and restrained consumer behaviour. The
acts of war in Ukraine have now aggravated international economic
challenges due to increased raw materials’ prices, especially for energy.
Further bottlenecks in the supply and delivery chains raised pressure on
inflation and led to increases in operational staff and production costs
in industrial and service companies. For this reason, the above-mentioned
challenging economic conditions are expected to prevail in 2022.
Targeted revenue stability in 2022
Despite the difficult economic environment, Austrian Post aims to achieve
the highest possible level of revenue stability in 2022. In particular,
revenue generated in the previous year by positive special effects
represents a high comparative benchmark in the first half of 2022. The
prior-year performance should be more easily matched in the second half of
the year. However, the underlying prerequisite for this forecast remains
broad energy-related as well as economic and currency stability in the
company’s markets.
A modest decline in the Mail Division revenue is expected in 2022. The
volatile development in recent years triggered by various pandemic-related
restrictions will generally diminish. Traditional letter mail volumes will
likely continue to suffer from a structural decline in the range of about
5 % as before. Price adjustment will attempt to offset the inflationary
cost increases. For example, within the context of its universal service
obligation, the rate for the Eco-letters featuring delivery within 2–3
days will be raised from EUR 0.74 to EUR 0.81 effective 1 July 2022.
Volatile trends in the direct mail and media post areas are also
anticipated due to of the advertising spending restraint.
Revenue in the Parcel & Logistics Division has risen sharply over the past
few years. This was also driven by COVID-19 related lockdowns which, in
turn, boosted additional parcel volumes in the field of e-commerce. For
this reason, a certain degree of consolidation is foreseeable in 2022 as
well as the steady increase in own delivery services carried out by a
large customer in Austria. There are other challenges in the parcel market
due to reduced need for logistics services related to COVID-19 as well as
due to currency exchange uncertainties on the Turkish market. Service
processes are being further optimised and moderate adjustments for
inflation are being implemented to minimise the revenue decline in the
current financial year.
Revenue development of the Retail & Bank Division should continue to
improve in 2022. The focus in 2022 will be on the integration of the ING
retail business into bank99 as well as on the further ramp-up of customers
and the expansion of the product portfolio.
Group earnings 2022
The current economic environment complicates the earnings forecast for
Austrian Post in 2022. It is highly likely that inflation trends will set
in not only in the short term but also in the long term as well. This
could not only impact the cost situation but also the purchasing power and
consumer sentiment. From today’s perspective, Group EBIT should lie in the
range of the results reported in the last two years, namely EUR 205m in
2021 and EUR 161m in 2020. The ambition of the company is to get close to
the level of 2021.
Continuation of investment programme
In essence, the planned investment programme of Austrian Post will be
continued. Individual investments are being assessed to ensure meeting all
profitability targets. Maintenance CAPEX in Austria, Southeast and Eastern
Europe and Turkey totalling about EUR 100m, comprise the basis of the
company’s investment activities in 2022. Furthermore, growth CAPEX of
about EUR 80m is planned in Austria in 2022. The conversion of logistics
processes to enable climate-neutral delivery plays an important role in
all investment projects.
CONTACTS Austrian Post
Austrian Post Harald Hagenauer
Ingeborg Gratzer Head of Investor Relations, Group
Head of Media Relations & Internal Auditing & Compliance
Communications Tel.: +43 (0) 57767-30400
Tel.: +43 (0) 57767-32010 investor@post.at
presse@post.at
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13.05.2022 This Corporate News was distributed by EQS Group AG.
www.eqs.com
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Language: English
Company: Österreichische Post AG
Rochusplatz 1
1030 Vienna
Austria
Phone: +43 577 67 – 30400
E-mail: investor@post.at
Internet: www.post.at
ISIN: AT0000APOST4
WKN: A0JML5
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1350901
End of News EQS News Service
1350901 13.05.2022
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