EANS-Adhoc: Österreichische Post AG / AUSTRIAN POST Q1 2012: Revenue growth (+6.0%) and earnings improvement (EBITDA +7.0%) in Q1; outlook confirmed for 2012

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3-month report

16.05.2012

- Increased revenue - Revenue up 6.0% above the prior-year quarter
- Good development in the mail and parcel segments - Further earnings
improvement - EBITDA rise of 7.0% to EUR 75.8m - EBIT up to EUR
55.8m - Strong cash flow and solid balance sheet - Free cash flow
of EUR 51.2m - Equity ratio increased to 43.4% - Outlook for 2012
confirmed - Stable or slightly rising revenue - EBITDA margin
within the targeted range of 10-12% and further EBIT improvement

OVERVIEW OF AUSTRIAN POST The first quarter of the 2012 financial
year proceeded very satisfactorily for Austrian Post in both the
parcel and mail segments. Against the backdrop of generally dampened
economic expectations in Austria and neighbouring countries, the
postal business continues to be mainly impacted by postal-specific
trends. Structural changes arise as a result of electronic
substitution of addressed letters as well as the positive impetus on
parcel shipment volumes provided by online business. In the first
three months of 2012, total revenue of Austrian Post rose by 6.0% to
EUR 605.7m. The newly established Mail & Branch Network Division
posted an increase of 6.2%. The revenue of the Parcel & Logistics
Division was up by 5.9%, and even by 6.6% if the subsidiaries in the
Benelux, which Austrian Post is currently disposing of, are excluded.
In addition to a generally solid volume development, special effects
also contributed to this good development. An additional working day
compared to the first quarter of 2011, along with new information
requirements on the part of customers in the finance,
telecommunications and energy sectors, resulted in volume growth.
Furthermore, the changed product portfolio offered by Austrian Post
led to a shift from addressed direct mail items to higher quality
letter mail products.

"The earnings posted in this quarter once again demonstrated Austrian Post's
success in consistently focusing its business operations on the four strategic
priorities it has defined. Group EBITDA increased by 7.0% to EUR 75.8m", says
Austrian Post CEO Georg Pölzl. We confirm our original outlook for 2012 based on
these quarterly results, with annual revenue expected to remain stable or
increase slightly on a comparable basis. At the same time, the company is
pursuing the goal of improving EBIT for the year.
"We had a good start in the year 2012 as a result of a consistently pursued
corporate strategy. For this reason, we will continue on our chosen path of
further developing the Group", Georg Pölzl adds. "We cannot compensate for the
ongoing trend towards declining addressed letter mail volumes only by increasing
the number of parcel shipments. Improving the efficiency and cost structure is
just as important for the success of the company as optimising service quality
on behalf of our customers."

REVENUE DEVELOPMENT IN DETAIL

In the first quarter of 2012, Austrian Post succeeded in increasing
its total revenue by 6.0% to EUR 605.7m. A generally solid volume
development contributed to the revenue improvement, along with
positive special effects in the letter mail segment and an additional
working day compared to the prior-year quarter. Revenue in the Mail &
Branch Network Division rose by 6.2% to EUR 385.0m. The trend towards
declining letter mail volumes caused by electronic substitution was
more than offset by positive special effects, namely new information
requirements on the part of customers in the finance,
telecommunications and energy sectors with positive implications on
volumes. Moreover, the changed product portfolio offered by Austrian
Post resulted in a volume shift from direct mail items to higher
quality letter mail products and from parcel to letter mail items in
the field of online shopping. In addition, new services in the Mail
Solutions segment such as mailroom management contributed to growth.
The former Branch Network Division is now encompassed in the business
area "Branch Services" in the Mail & Branch Network Division. Revenue
and costs in the new management structure developed as planned. On
balance, Austrian Post featured a total of 1,878 postal service
points as at March 31, 2012, of which 1,266 are third-party operated
postal partner offices. Revenue in the Parcel & Logistics Division
increased by 5.9% to EUR 220.8m. From a regional perspective, the
Austrian parcel market generated the highest growth, followed by a
good revenue development in Germany. In the first quarter, revenue of
the disposed Benelux subsidiaries is still included in the income
statement for the most part. The Dutch company was deconsolidated as
at March 15, 2012.

INCOME STATEMENT Revenue growth of 6.0% to EUR 605.7m also affected
operating expenses for raw materials, consumables and services used,
which rose by 4.4%, to EUR 190.9m. Higher costs related to increased
purchases of external transport services as well as higher
commissions for postal partner offices, amongst other factors,
resulted as a consequence of the structural transformation of the
branch network. Staff costs rose by 6.6% in a quarterly comparison,
or EUR 17.7m, to EUR 284.4m. This increase is primarily due to higher
non-operational staff costs. In contrast, operational staff costs
remained largely constant during the same period. The average number
of employees in the Group declined by 268 compared to the prior-year
period to 22,998 employees (full-time equivalents). Non-operational
staff costs, which amounted to EUR 20.1m in the first quarter,
include all investments designed to achieve a sustainable improvement
in the cost structure such as restructuring measures. Furthermore,
due to internationally low interest rate levels, it was necessary to
reduce the discount interest rate for existing, interest-bearing
provisions of Austrian Post by 0.25 percentage points. The lower
discount factor led to increased provisioning requirements totalling
EUR 8.5m. Otherwise there were no significant changes in provisions
for employee under-utilisation or employees transferring to the
federal public service during the reporting period. The provisions
for employee under-utilisation have declined from EUR 239.0m to EUR
236.3m since the beginning of 2012. The cash-related use of these
provisions in the first quarter amounted to EUR 7.7m. In the first
quarter of 2012, earnings before interest, tax, depreciation and
amortisation (EBITDA) of Austrian Post improved to EUR 75.8m.
Accordingly, the EBITDA margin was 12.5%. Earnings before interest
and tax (EBIT) rose by 14.4% to EUR 55.8m, corresponding to an EBIT
margin of 9.2%. From a divisional perspective, both divisions
improved their operating results during the period under review. EBIT
in the Mail & Branch Network Division rose in the first quarter to
EUR 74.4m, mainly as a consequence of the above-mentioned revenue
increase. The Parcel & Logistics Division also showed an improvement.
EBIT increased from EUR 5.2m to EUR 7.6m. The good volume development
combined with structural measures implemented in the subsidiaries
featuring a below-average performance is leading to an improved
margin situation for the year 2012. EBIT in the Corporate segment was
down from minus EUR 17.3m in the previous year to minus EUR 26.2m in
the first quarter of 2012. Amongst other reasons, this decline can be
attributed to the reduction of the discount interest rate for
provisions by 0.25 percentage points. Thus, requirements increased
for interest-bearing provisions on the balance sheet. Earnings before
tax rose 16.6% to EUR 55.7m. After deducting income taxes totalling
EUR 14.3m, the Group net profit (profit after tax for the period)
amounted to EUR 41.4m. This corresponds to earnings of EUR 0.61 per
share for the first quarter of 2012 (prior year quarter: EUR 0.55).

CASH FLOW The operating cash flow before changes in working capital
amounted to EUR 71.3m in the first three months of 2012, or EUR 23.6m
above the prior-year quarter. During the period under review, the
cash flow from changes in net working capital amounted to minus EUR
6.0m. This development is mainly due to the increase in receivables.
The cash flow from investing activities of minus EUR 14.1m includes
cash outflows for the purchase of property, plant and equipment
(CAPEX) totalling minus EUR 10.1m, and cash inflows derived from the
disposal of property, plant and equipment of EUR 4.9m. Accordingly,
the free cash flow was EUR 51.2m, compared to EUR 23.2m in the first
three months of the previous year.

EMPLOYEES The average number of full-time employees at Austrian Post
totalled 22,998 people in the first quarter of 2012, corresponding to
a decline in the workforce by 268 employees from the prior-year
period. Most of Austrian Post's labour force is employed by the
parent company Österreichische Post AG (a total of 19,372 full-time
equivalents).

OUTLOOK FOR 2012 Austrian Post confirms the original outlook for its
revenue development for the entire year 2012. Revenue should remain
stable or rise slightly on a comparable basis. Business development
will continue to be impacted by structural changes in the postal
sector. Electronic substitution will lead to a decline in addressed
letter mail volumes, whereas increasing e-commerce should
result in growth in the transported parcel volumes. The dampened
economic environment could have a negative effect on the advertising
industry and consumer behaviour. One focal point of the Group will
continue to be on enhancing the profitability of the services
offered. With respect to sustainable earnings development, Austrian
Post confirms the targeted EBITDA margin in the range of 10% to 12%.
The company is also striving to achieve a further improvement in
earnings before interest and tax (EBIT) compared to 2011. The
operating cash flow generated by Austrian Post will continue to be
prudently used mainly to finance sustainable efficiency improvements,
structural measures and future-oriented investments. Total capital
expenditure (CAPEX) in 2012 is expected to reach a level of EUR
80-90m. This will primarily focus on replacement investments in
existing facilities as well as on continuous modernisation and
efficiency enhancement, for example new sorting technology for direct
mail items. Domestic and international acquisitions are possible to
round off and safeguard Austrian Post's core business. The current
attractive dividend policy will be continued.

PERFORMANCE OF DIVISIONS MAIL & BRANCH NETWORK DIVISION Since the
beginning of the year 2012, the previous Mail and Branch Network
divisions were merged to create the new Mail & Branch Network
Division. The new segment reporting reflects the current
organisational, management and reporting structure. Divisional
revenue developed very positively in the first quarter of 2012,
rising to EUR 385.0m. Despite economic uncertainties and the ongoing
trend towards declining addressed letter mail volumes related to
electronic substitution, this solid growth was achieved on the basis
of special effects such as the new requirements for the physical
distribution of information applying to customers in the finance,
telecommunications and energy sectors, which positively influenced
revenue development. Moreover, the first quarter of 2012 featured an
additional working day compared to the same period in the previous
year. In the Letter Mail Business Area, revenue improved by 13.3%
from the prior-year quarter to EUR 205.2m. The continuing
substitution of letters by electronic media was counteracted by
positive effects. Special effects included an additional working day
and the new legal information obligations for various customer
groups. In addition, the change in the product portfolio of Austrian
Post resulted also in a volume shift from direct mail items to higher
quality letter mail products and from parcel to letter mail items in
the field of online shopping. Furthermore, new services in the Mail
Solutions segment such as mailroom management contributed to growth.

The Direct Mail Business Area posted a slight revenue drop in the first quarter
of 2012, to EUR 109.7m. This development is mainly attributable to the
above-mentioned volume shifts to the Letter Mail segment, but also to the
structural decrease in the business of mail order companies and seasonal shifts
of advertising campaigns from the first to the second quarter. Revenue of the
Media Post Business Area improved to EUR 35.7m in the first three months of
2012.
Activities of the former Branch Network Division are now reported in the
business area Branch Services, whose revenue fell to EUR 34.4m. Half of this
decrease is due to the reclassification of the "Value Logistics" operations to
the Parcel & Logistics Division, whereas the other half is the result of
declining revenue with retail products and financial services.
On balance, EBITDA of the Mail & Branch Network Division improved to EUR 81.8m
in the period under review, and EBIT climbed to EUR 74.4m. The former Branch
Network is included with a slightly negative earnings contribution.

PARCEL & LOGISTICS DIVISION

External sales of the Parcel & Logistics Division climbed 5.9% in the
first quarter of 2012, to EUR 220.8m. As at March 15, 2012, an
agreement was signed with PostNL regarding the sale of the
subsidiaries in the Netherlands and Belgium. The deconsolidation of
the Dutch company took place as at March 15, 2012. The disposal of
the Belgian subsidiary is expected at the end of June 2012. The
premium parcel segment (parcel delivery within 24 hours), which is
mainly used in the business-to-business area, generated a revenue
increase of 4.1% in the first quarter of 2012, to EUR 169.4m. The
German subsidiary trans-o-flex accounted for about three-quarters of
this revenue. Parcel volumes of business customers in Austria
increased at a disproportionately high rate, whereas intensified
price pressure was perceptible in South East and Eastern Europe. The
standard parcels product segment used mainly for shipments to private
customers also posted growth. Revenue rose by 7.2%, to EUR 43.6m. The
operating result of the Parcel & Logistics Division improved. First
quarter EBIT totalled EUR 7.6m.

The interim report for the first quarter of 2012 is available in the
internet: www.post.at/ir/en --> Publications --> Financial Reports

Further inquiry note:
Austrian Post
Mr. Harald Hagenauer
Head of Investor Relations & Corporate Governance
Tel.: +43 (0) 57767-30400
harald.hagenauer@post.at

Austrian Post
Ms. Ingeborg Gratzer
Head of Press & Internal Communications
Tel.: +43 (0) 57767-24730
ingeborg.gratzer@post.at

Austrian Post
Mr. Michael Homola
Press Spokesman
Tel.: +43 (0) 57767-32010
michael.homola@post.at

end of announcement euro adhoc
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issuer: 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