EQS-News: Austrian Post H1 2023: Revenue and earnings increase in the first half of 2023
EQS-News: Österreichische Post AG / Key word(s): Half Year Results
Austrian Post H1 2023: Revenue and earnings increase in the first half of
2023
10.08.2023 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.
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AUSTRIAN POST H1 2023 RESULTS:
Revenue and earnings increase in the first half of 2023
H1 revenue growth in Parcel & Logistics and Retail & Bank
• Revenue +6.0 % to EUR 1,284.8m
• Mail –0.2 % to EUR 598.1m
• Parcel & Logistics +9.9 % to EUR 628.4m
• Retail & Bank +41.3 % to EUR 76.5m
H1 Group earnings with strong improvement in Retail & Bank
• EBITDA +5.3 % to EUR 189.0m
• EBIT +4.6 % to EUR 95.2m
• Earnings per share +36.0 % to EUR 1.13
Cash flow and balance sheet
• H1 operating free cash flow of EUR 115.5m
• Total assets as at 30 June including bank99 of EUR 5.3bn
Outlook for 2023
• Targeted Group revenue growth in the mid-single-digit range
• Earnings (EBIT) target remains close to the prior year level
The first half of 2023 was characterised by challenging conditions.
Economic developments and the ongoing high inflation rate continue to
impact Austrian Post’s business model. This applies particularly to higher
costs for energy and purchased services as well as increased staff costs
alongside a weaker economic environment as reflected in the subdued
consumer confidence. “Our performance in the first half year is in line
with our expectations,” says CEO Georg Pölzl. “However, we succeeded in
growing revenue as well as earnings thanks to the necessary cost and price
discipline,” he added.
Group revenue totalled EUR 1,284.8m in the first half of 2023, implying a
rise of 6.0 %. The Parcel & Logistics Division showed a 9.9 % revenue
increase to EUR 628.4m. Business in Türkiye continued to be negatively
impacted by inflation and currency effects. Nevertheless, the company
managed to generate higher revenue in all regions. The Mail Division
reported a slight revenue decline of 0.2 % to EUR 598.1m in the first half
year 2023, with the rise in conventional letter mail in contrast to a
decrease in the direct mail business. The Retail & Bank Division generated
strong revenue growth of 41.3 % to EUR 76.5m due to the improved interest
rate environment for banks. Austrian Post’s Group revenue in the first and
second quarters of 2023 was considerably affected by the exchange rate of
the Turkish Lira. Accordingly, the first quarter benefited with revenue
increasing by 10.5 %, whereas the second quarter was negatively impacted,
showing an increase of only 1.6 % mainly due to currency effects in line
with hyperinflationary accounting.
Despite the ongoing challenges, Austrian Post reported an improvement in
its key financial indicators for the first half of 2023. EBITDA increased
by 5.3 % to EUR 189.0m and earnings before interest and taxes (EBIT) rose
4.6 % from EUR 91.0m to EUR 95.2m. EBIT reported by the Mail Division
totalled EUR 77.6m in the first half of 2023 compared to EUR 82.9m in the
previous year. The earnings reduction is attributable to the ongoing
volume decline and cost increases in all areas which could be only
partially offset by postal rate increases. EBIT achieved by the Parcel &
Logistics Division equalled EUR 36.3m in the first half of 2023 compared
to the prior-year figure of EUR 45.5m. This decrease can be attributed to
positive special effects amounting to EUR 10.9m in the previous year in
connection with Aras Kargo (in particular the option valuation relating to
the increase in Austrian Post’s stake in the company). The Retail & Bank
Division showed a strong earnings improvement, recording an EBIT of
EUR 1.1m in the first half of 2023, up from minus EUR 20.4m in the
prior-year period. In this regard, a significant contribution was made by
the positive development of the financial services business of bank99
based on the improved interest rate environment. All in all,
second-quarter EBIT of the Austrian Post Group was down from EUR 51.4m to
EUR 48.2m due to the above-mentioned positive special effects of EUR 10.9m
in the second quarter of 2022. The profit for the period climbed from
EUR 54.8m to EUR 78.6m in the first half-year 2023, corresponding to
improved earnings per share of EUR 1.13 in contrast to EUR 0.83 per share
in the previous year.
In the second half of 2023, the economic environment in Europe will
continue to be characterised by high inflation, restrained consumer
behaviour and a limited investment activity. Austrian Post will adapt its
product and pricing portfolio for conventional letter mail items effective
1 September 2023. Both business and private customers will be able to
choose between the cheaper ECO letter with two to three working days
delivery and the faster PRIO letter with next working day delivery. In
turn, this will enhance freedom of choice and ensure reliable delivery
quality. The Group maintains its performance targets for the 2023
financial year and expects to achieve revenue growth in the
mid-single-digit range and earnings (EBIT) at about the same level as last
year.
The investment programme of Austrian Post to ensure sustainability and
growth is also a top priority in 2023. The focus is on expanding parcel
logistics capacities in Austria as well as the sustainable vehicle fleet
to enhance e-mobility. Austrian Post is very well positioned to maintain
delivery quality and speed for parcels in Austria at a high level even in
the case of increasing volumes due to the scheduled completion of the
Logistics Centre Vienna in the autumn of this year. “In the interest of
customer orientation, the performance of our services and our leading role
in sustainable logistics are at the centre of our actions,” CEO Georg
Pölzl concludes.
KEY FIGURES
Change
EUR m H1 2022 H1 2023 % EUR m Q2 2022 Q2 2023
Revenue 1,211.8 1,284.8 6.0 % 73.0 610.4 620.2
Mail 599.5 598.1 –0.2 % –1.5 300.7 289.5
Parcel & Logistics 572.0 628.4 9.9 % 56.4 288.9 301.3
Retail & Bank 54.2 76.5 41.3 % 22.4 27.7 39.1
Corporate/Consolidation –14.0 –18.2 –30.5 % –4.3 –6.9 –9.7
Other operating income 59.2 38.0 –35.9 % –21.2 30.8 19.4
Raw materials, consumables
and services used –349.4 –374.7 –7.2 % –25.2 –173.8 –177.1
Expenses for financial
services –6.4 –5.8 8.4 % 0.5 –3.2 –3.9
Staff costs –571.8 –579.2 –1.3 % –7.4 –283.9 –279.4
Other operating expenses –165.1 –177.9 –7.8 % –12.8 –83.2 –86.6
Results from financial
assets accounted for using
the equity method 0.1 0.8 >100 % 0.8 –0.1 0.8
Net monetary gain 1.1 3.1 >100 % 1.9 1.1 0.7
EBITDA 179.4 189.0 5.3 % 9.6 98.2 93.9
Depreciation, amortisation
and impairment losses –88.4 –93.8 –6.1 % –5.4 –46.8 –45.7
EBIT 91.0 95.2 4.6 % 4.2 51.4 48.2
Mail 82.9 77.6 –6.3 % –5.2 41.8 36.7
Parcel & Logistics 45.5 36.3 –20.0 % –9.1 28.0 19.7
Retail & Bank –20.4 1.1 >100 % 21.5 –9.7 0.3
Corporate/Consolidation^1 –16.9 –19.9 –17.6 % –3.0 –8.7 –8.4
Financial result –13.5 5.7 >100 % 19.2 –14.6 9.1
Profit before tax 77.5 100.9 30.2 % 23.4 36.8 57.3
Income tax –22.7 –22.3 1.8 % 0.4 –12.5 –10.6
Profit for the period 54.8 78.6 43.5 % 23.8 24.3 46.6
Earnings per share (EUR)^2 0.83 1.13 36.0 % 0.30 0.38 0.67
Gross cash flow 161.9 156.7 –3.2 % –5.3 84.0 76.9
Cash flow from operating
activities 45.0 11.4 –74.7 % –33.6 65.6 62.3
CAPEX 58.7 47.6 –18.9 % –11.1 35.1 23.5
Free cash flow –54.2 –23.0 57.5 % 31.2 –15.8 83.8
Operating free cash flow^3 105.8 115.5 9.2 % 9.7 33.7 40.4
^1 Includes the intra-Group cost allocation procedure
^2 Undiluted earnings per share in relation to 67,552,638 shares
^3 Free cash flow before acquisitions/securities/money market investments,
growth CAPEX and core banking assets
Vienna, 10 August 2023
EXCERPTS FROM THE MANAGEMENT REPORT H1 2023
REVENUE DEVELOPMENT IN DETAIL
In the first half of 2023, Austrian Post’s Group revenue increased by
6.0 % year-on-year to EUR 1,284.8m. All operating divisions developed in a
very satisfactory way in the first six months. Revenue of the
Parcel & Logistics Division climbed by 9.9 % and Retail & Bank Division
revenue was up by 41.3 %. Only the Mail Division reported a slight revenue
decline of 0.2 % from the previous year.
The share of the Mail Division as a proportion of the total revenue
generated by Austrian Post in the first half of 2023 amounted to 45.9 %.
The division’s revenue of EUR 598.1m is negatively impacted by the
structural decline of addressed letter mail volumes as a result of
electronic substitution, but also benefits from postal rate adjustments
implemented last year. Moreover, a subdued advertising environment is
evident in certain sectors.
The Parcel & Logistics Division accounted for 48.2 % of Group revenue or
EUR 628.4m in the reporting period. The parcel business developed very
positively in all regions. The Logistics Solutions business had a decrease
in revenue due to the lack of special pandemic-related logistics services
of preceding years.
The Retail & Bank Division accounted for 5.9 % of Group revenue or
EUR 76.5m in the first half of 2023. Interest rate developments over the
past months made a positive contribution to the division’s revenue.
Revenue of the Mail Division totalled EUR 598.1m in the first half of
2023, of which 63.3 % can be attributed to the Letter Mail & Business
Solutions area. Direct Mail accounted for 26.0 % of the total divisional
revenue, and Media Post had a 10.7 % share.
In the first half of 2023, Letter Mail & Business Solutions revenue
amounted to EUR 378.7m, implying a year-on-year increase of 0.9 %. Letter
mail volumes continue to show a downward trend resulting from the
substitution of letters by electronic forms of communication. Conventional
letter mail volumes in Austria fell by 6 % in the first half-year 2023,
which is also related to positive special effects in the prior-year period
(energy bonus mailing). In contrast, postal rate adjustments implemented
in the previous year had a positive effect on revenue in the current
reporting period. Inflationary pressures on all types of costs led to
adjustments in the product and pricing structure as well as to necessary
efficiency increases in internal processes. International letter mail was
impacted by a reduction or volume shift to parcel products, whereas the
Business Solutions area developed positively.
Direct Mail revenue fell by 4.0 % in the first half of 2023 to EUR 155.3m.
The current restrained advertising behaviour as well as the structural
decline in certain customer segments (e.g. mail order business) could be
partially offset by adjustments to the price structure. Furthermore,
consolidation in stationary retail is ongoing.
Revenue from Media Post, i.e., the delivery of newspapers and magazines,
rose by 2.4 % year-on-year to EUR 64.1m. This increase is related mainly
to adjustments in the product and pricing structure.
Revenue of the Parcel & Logistics Division increased by 9.9 % in the first
half of 2023 to EUR 628.4m. The parcel business developed very positively
in all regions.
Parcel Austria generated 8.8 % revenue growth to EUR 373.9m in the
reporting period. Parcel volumes showed an upward trend of 9 %, influenced
by high customer confidence in the quality leadership of Austrian Post and
rising volumes from Asia.
Revenue in Türkiye (Parcel Türkiye) increased by 22.9 % to EUR 133.0m
compared to the first six months of 2022. This high level of growth is due
to increasing volumes (+11 %). Growth in the first and second quarter of
2023 varied as a result of currency exchange developments. A revenue
contribution of EUR 83.6m was generated in the first quarter of 2023,
whereas second-quarter Parcel Türkiye revenue was EUR 49.5m. Second
quarter included a currency effect from first-quarter revenue of minus
EUR 22m (IAS 29 Hyperinflation valuation).
The parcel business in Southeast and Eastern Europe (Parcel CEE/SEE)
continues to generate positive growth rates, with revenue up by 7.1 % to
EUR 91.7m in the first half of 2023. This region also saw a strong
increase in parcel volumes from Asia.
Revenue of the Logistics Solutions area (including Consolidation) fell by
13.8 % in the reporting period to EUR 29.8m. This decline is related to
the lack of special pandemic-related logistics services provided in
previous years.
Revenue of the Retail & Bank Division improved by 41.3 % in the first
half-year 2023, increasing to EUR 76.5m from EUR 54.2m in the prior-year
period. Income from Financial Services climbed from EUR 35.4m to EUR 56.6m
in the current reporting period (+59,9 %). This is mainly attributable to
the improved interest rate environment in Europe. Branch Services revenue
increased by 6.2 % to EUR 19.9m as a result of higher revenue generated in
the field of retail products/merchandise.
EARNINGS DEVELOPMENT
The largest expense items in relation to Austrian Post’s Group revenue are
staff costs (45.1 %), raw materials, consumables and services used
(29.2 %) and other operating expenses (13.8 %). 7.3 % can be attributed to
depreciation, amortisation and impairment losses and 0.5 % to expenses for
financial services.
Staff costs in the first half of 2023 totalled EUR 579.2m, implying a
year-on-year increase of 1.3 % or EUR 7.4m. The change includes collective
wage salary adjustments in operational staff costs, which are countered by
a high level of cost discipline. Austrian Post Group employed an average
of 26,950 people (full-time equivalents) in the first six months of 2023
compared to the average of 27,144 employees in the prior-year period
(–0.7 %). Non-operating staff costs refer to severance payments and
changes in provisions, which are primarily related to the specific
employment situation of civil servant employees at Austrian Post. In
contrast to the previous year’s period, no significant extra charges were
incurred in the first half of 2023.
Raw materials, consumables and services used rose by 7.2 % to EUR 374.7m.
Fuel and energy costs as well as transport costs for external freight
companies increased the costs.
Other operating income decreased by 35.9 % to EUR 38.0m in the first half
of 2023. This development can be attributed to the lack of COVID-19
related reimbursements paid in the previous year as well as to the
positive valuation effect for the remaining 20 % stake in Aras Kargo in
the previous year. Other operating expenses increased by 7.8 % to
EUR 177.9m, particularly for IT services and maintenance costs.
EBITDA equalled EUR 189.0m in the first half of 2023, an increase of 5.3 %
from the comparable figure of EUR 179.4m in the previous year. This
implies an EBITDA margin of 14.7 %.
Depreciation, amortisation and impairment losses amounted to EUR 93.8m in
the first six months of 2023, constituting a year-on-year increase of
6.1 % or EUR 5.4m. The increase is mainly due to investments in new parcel
logistics infrastructure locations.
For the Turkish subsidiary, the accounting standard IAS 29 (Financial
Reporting in Hyperinflationary Economies) has to be applied. Accordingly,
all items in the income statement as well as the non-monetary items were
adjusted using a general price index (refer to the Annual Report 2022,
Consolidated Financial Statements, Note 3.3). The profit or loss from net
monetary items is presented as a separate item in the income statement. In
the first half of 2023, the net monetary gain amounted to EUR 3.1m.
Group EBIT totalled EUR 95.2m in the first half-year 2023, up from
EUR 91.0m in the previous year. The prior-year figure included a positive
special effect of EUR 10.9m in connection with Aras Kargo (mainly option
valuation of share increase). The EBIT margin in the first half of 2023
equalled 7.4 %.
The Group’s financial result amounted to EUR 5.7m compared to minus
EUR 13.5m in the previous year. Whereas the second quarter of 2022 still
included a valuation effect of minus EUR 12.3m from financial parameters
relating to the option liability for the remaining 20 % stake in Aras
Kargo, the current second quarter showed a positive effect of EUR 7.1m. As
a consequence, after deducting the income tax of EUR 22.3m, the profit for
the period for the first six months of 2023 equalled EUR 78.6m, up from
EUR 54.8m in the first half of 2022. Undiluted earnings per share were
EUR 1.13, up by 36.0 % from the comparable prior-year figure of EUR 0.83.
EARNINGS BY DIVISON
From a divisional perspective, the Mail Division achieved an EBIT of
EUR 77.6m in the first six months of 2023 compared to EUR 82.9m in the
prior-year period (–6.3 %). This decline resulted from the ongoing volume
decline and cost increases in all areas which could only be partially
offset by postal rate effects.
The Parcel & Logistics Division generated an EBIT of EUR 36.3m in the
first half-year 2023, down by 20.0 % from EUR 45.5m in the prior-year
period which included a positive special effect of EUR 10.9m in the income
statement relating to Aras Kargo (mainly option valuation of share
increase). The parcel business in Austria and Türkiye improved whereas
earnings declined at several Southeast and Eastern European subsidiaries.
The lack of special pandemic-related logistics services also negatively
impacted the division’s earnings.
The Retail & Bank Division recorded an EBIT of EUR 1.1m in the first half
of 2023, compared to minus EUR 20.4m in the previous year. Accordingly,
the earnings improvement equalled EUR 21.5m. The positive development in
the financial services business based on higher net interest income made a
significant contribution to earnings.
The EBIT of the Corporate Division (including Consolidation and the
intra-Group cost apportionment procedure) changed from minus EUR 16.9m to
minus EUR 19.9m, particularly as the result of higher energy costs. The
Corporate Division provides non-operating services which are typically
essential for the purpose of the 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 provision 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
The gross cash flow in the first half of 2023 equalled EUR 156.7m,
compared to EUR 161.9m in the first half-year 2022 (–3.2 %). The cash flow
from operating activities amounted to EUR 11.4m in the reporting period,
compared to the prior-year figure of EUR 45.0m. In this regard, the
largest effect is attributable to changes in the core banking assets of
bank99 totalling minus EUR 128.5m in the first half of 2023, which consist
mainly of an increase in receivables from customers (lending) and a higher
portfolio of investments (purchase of government bonds). The cash flow
from operating activities excluding core banking assets totalled
EUR 139.9m in the first half of 2023, up by 4.2 % from EUR 134.3m in the
first half of 2022. The cash flow from investing activities was minus
EUR 34.4m in the first six months of 2023, compared to minus EUR 99.2m in
the prior-year period.
Austrian Post relies on operating free cash flow as a key metric 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 115.5m in the current reporting
period compared to EUR 105.8m in the first half of 2022. The cash flow
from financing activities came to minus EUR 99.0m in the first six months
of 2023, compared to minus EUR 66.2m in the previous year.
Austrian Post relies on a solid balance sheet and financing structure.
Total assets amounted to EUR 5.3bn as at 30 June 2023. On the asset side,
property, plant and equipment at EUR 1,324.3m is one of the largest
balance sheet items and and included right-of-use assets in connection
with leases of EUR 404.4m. In addition, there were intangible assets and
goodwill from company acquisitions, which were reported at the amount of
EUR 148.4m as at 30 June 2023. The balance sheet showed receivables
totalling EUR 387.2m, other financial assets amounted to EUR 46.8m as at
30 June 2023. Financial assets from financial services totalled
EUR 3,101.2m at the end of the first half of 2023 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 652.7m as at 30 June 2023 (implying an
equity ratio of 12.3 %). The pro forma equity ratio (bank99 accounted for
using the equity method) equalled 28 % at the end of June 2023. Provisions
of EUR 591.4m are shown on the equity and liabilities side at the end of
June 2023, trade and other payables totalling EUR 498.7m. Financial
liabilities from financial services amounting to EUR 2,943.2m result
primarily from the business activities of bank99 (deposit and investment
business of bank99’s customers).
OUTLOOK FOR 2023
The European macroeconomic environment will continue to be impacted by
high inflation and the resulting effects on the purchasing power of
consumers and the willingness of companies to invest. The upward
adjustment of wages and salaries at Austrian Post as stipulated by
collective labour agreements takes place annually at the Austrian core
business on the 1st of July. For this reason, Austrian Post has to
continually adapt its product portfolio to incorporate the changes in
energy and staff costs.
Revenue growth in 2023
Based on the Group revenue 2022 of EUR 2.5bn, the company expects growth
in the mid-single-digit range in 2023.
The Mail Division is confronted with a structural volume decline in
conventional letter mail as well as reduced direct mail and media post
volumes. This development relates to the weaker economic situation of many
customers as well as cost pressures arising from higher prices of energy
and paper. Austrian Post will introduce an adapted product portfolio and
pricing structure effective 1 September 2023. In this case, both business
and private customers will be able to choose between the more favourably
priced Economy letter with delivery times of two to three working days and
the faster Priority letter with next working day delivery. This offering
ensures the freedom of choice and reliable delivery quality. On balance,
the Mail Division expects a slight decrease in revenue in 2023.
The Parcel & Logistics Division continues to expect growth in the 2023
financial year. Although the economic environment and consumer behaviour
are challenging in Austrian Post’s operating markets, the Parcel &
Logistics Division aims to generate growth in the upper single-digit
range. However, developments are fraught with uncertainty. In particular,
the contribution of the Turkish subsidiary in the second quarter was
heavily impacted by the exchange rate development of the Turkish Lira, and
this is expected to continue.
The Retail & Bank Division is forecasted to develop positively. Revenue is
expected to increase significantly in 2023 against the backdrop of an
improved interest rate environment. The company maintains its objective of
further expanding its financial services business, pressing ahead with IT
integration and reaching the break-even point at bank99 in 2024.
Group earnings in 2023
The high level of inflation and the resulting constant upward pressure on
costs have proven to be challenging conditions in the core markets.
Increases in energy, transport and staff costs must be counteracted by
efficiency enhancement measures, while also taking into account in
designing products and setting prices as much as possible. In the Austrian
market, staff cost increases will take effect in the second half of 2023.
Nevertheless, Austrian Post still aims to generate earnings (EBIT) in 2023
at the same level as last year.
Investment programme in 2023
The massive investment programme implying a close to threefold increase in
sorting capacities in Austrian parcel logistics is entering its final
phase, as reflected in the expansion of the Logistics Centre Vienna.
Furthermore, Austrian Post will move ahead with expanding e-mobility with
the aim of ensuring 100 % CO2-free delivery in Austria by 2030. In 2023,
maintenance CAPEX in Austria and the international subsidiaries will be at
the range of EUR 100m. Furthermore, growth CAPEX of EUR 60m-80m is planned
in Austria. Positive effects from divestments of non-operating real estate
assets are possible.
CONTACTS
Austrian Post Austrian Post
Ingeborg Gratzer Harald Hagenauer
Head of Media Relations & Internal Head of Investor Relations, Group
Communications Auditing & Compliance
Tel.: +43 (0) 57767-32010 Tel.: +43 (0) 57767-30400
presse@post.at investor@post.at
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10.08.2023 CET/CEST 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: 1698629
End of News EQS News Service
1698629 10.08.2023 CET/CEST
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