EANS-News: Österreichische Post AG / AUSTRIAN POST 2014: SLIGHT REVENUE INCREASE; EARNINGS DEVELOPMENT IMPACTED BY SPECIAL EFFECTS

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annual result

- Market environment - Basic trend of e-substitution of letter mail
is continuing - Retail sector and thus advertising customers under
pressure - Growth in e-commerce drives parcel volumes - Hardly
any economic impetus and strong competition in the B2B parcel market
- Revenue - Slight revenue increase of 0.2% to EUR 2,370.5m -
Decline in the mail business (-1.5%) offset by parcel growth (+3.1%)
- Earnings - EBIT rise of 5.9% to EUR 196.9m - Earnings impacted
by various special effects - Cash flow and dividend - Strong cash
flow secures investments and dividends - Proposal to the Annual
General Meeting: dividend of EUR 1.95/share - Outlook 2015 - Aim to
achieve revenue growth of 1-2% - Targeted EBITDA margin of about
12% and further EBIT improvement aspired

OVERVIEW OF AUSTRIAN POST In the 2014 financial year, Group revenue
of Austrian Post amounted to EUR 2,370.5m, comprising an increase of
0.2% from the previous year. The strong growth in the parcel business
of 3.1% more than compensated for the 1.5% revenue drop in the mail
business. Once again, Austrian Post succeeded in keeping the revenue
decline in the Mail & Branch Network Division at a moderate level
against the backdrop of a structurally shrinking market thanks to
innovative ideas and sales initiatives. The Parcel & Logistics
Division generated revenue growth of 3.1% during the reporting
period. The parcel business developed differently, depending on the
region. The ongoing trend toward increased e-commerce provided growth
not only for the Austrian parcel market, but also for the parcel
subsidiaries in South East and Eastern Europe, which showed
exceptionally high growth rates, whereas revenue in Germany slightly
declined.

On the basis of the solid revenue development and ongoing strict cost
discipline, operating results (EBIT) rose 5.9% from the prior-year
level to EUR 196.9m. However, in addition to the solid operational
performance, earnings also included several special effects. One
positive special effect is the sale of the former corporate
headquarters in Vienna which led to operating income of EUR 62.4m. In
contrast, various impairment losses and structural measures in
Germany had a negative impact of EUR 48.7m on earnings. In addition
an impairment loss on goodwill of a mail subsidiary in Poland to the
amount of EUR 9.7m was recognised. All in all, the profit for the
period amounted to EUR 146.8m, corresponding to earnings per share of
EUR 2.17.

In 2014, Austrian Post also decisively continued its ongoing
modernisation process. The company invested a total of EUR 82.6m
(CAPEX) in new customer solutions and in improving and expanding its
infrastructure. "In this way, Austrian Post is fulfilling its
objective of designing more efficient processes and further
increasing customer benefits. Important impetus was provided in 2014,
especially in the fields of customer orientation and innovation. By
expanding self-service solutions such as 260 modern self-service
zones and 126 pick-up stations as well as new online solutions such
as the Post App, Austrian Post is able to satisfy current customer
needs, which is reflected by rising customer satisfaction ratings",
says Austrian Post CEO Georg Pölzl.

On the basis of the good earnings development, solid cash flows and a
strong balance sheet, the Management Board will propose the approval
of a dividend of EUR 1.95 per share in respect of the 2014 financial
year to the Annual General Meeting scheduled for April 15, 2015.
Looking ahead to 2015, Austrian Post anticipates a rise in Group
revenue of 1-2%. At the same time, the aim is to achieve an EBITDA
margin of about 12% and an ongoing improvement in EBIT. "Consistent
focus on our customers' needs will remain at the core of our
strategic activities. In this way, we want to continue to consolidate
our market leadership in the core business, and simultaneously
exploit opportunities in growth markets", says Georg Pölzl.

REVENUE DEVELOPMENT IN DETAIL Austrian Post's revenue in the 2014
financial year slightly surpassed the prior-year level. On balance,
revenue was up 0.2% to EUR 2,370.5m. The parcel business showed solid
growth of 3.1% in the reporting period, offsetting a revenue decrease
of 1.5% in the mail segment.

All in all, revenue of the Mail & Branch Network Division was down
1.5% year-on-year to EUR 1,487.7m. Letter Mail & Mail Solutions
revenue only declined slightly from the prior-year level, falling by
0.3% to EUR 790.5m. The basic trend towards declining volumes
resulting from the substitution of letters by electronic media is
continuing as before. These revenue decreases were partially offset
by growth in the field of Mail Solutions. Revenue in the Direct Mail
business was down 2.5% in 2014 to EUR 431.0m. The Direct Mail
business is generally heavily influenced by customer advertising
expenditure and also by the economic environment. The pressure
exerted by online business on traditional mail order companies and
retail stores led to reduced advertising spending by several
customers. Moreover, several retail segments were affected by market
consolidation. Elections and referendums also generated higher
revenue contributions in the previous year, especially in the first
three quarters.

Total revenue of the Parcel & Logistics Division rose by 3.1% in 2014
to EUR 882.0m. From a regional perspective, 55.4% of total revenue in
the Parcel & Logistics Division was generated in Germany, 35.6% in
Austria and 9.0% by the subsidiaries in South East and Eastern
Europe. Revenue in Austria and the CEE markets developed very
positively, the German subsidiary trans-o-flex suffered from a slight
revenue decline of 0.1% as a consequence of the challenging
competitive situation. In contrast, revenue growth in Austria reached
a level of 6.5% in 2014, supported by the trend towards online
shopping as well as market share increases in the business parcel
segment. In total, the subsidiaries in South East and Eastern Europe
posted a substantial revenue increase of 10.7%.

EXPENSE AND EARNINGS DEVELOPMENT Raw materials, consumables and
services used declined by 1.2% or EUR 8.8m in the reporting period to
EUR 744.5m. This development is primarily due to the decrease in
costs for external transport services in Germany. The business model
of the trans-o-flex Group used to be characterised by a particularly
high level of external value creation, which is currently being
reduced thanks to the takeover of distribution companies and the
rendering of these services internally.

Staff costs of Austrian Post totalled EUR 1,109.5m in 2014, a rise of
3.4% or EUR 36.0m. This rise can be primarily attributed to two
factors. First, the previously-mentioned integration of distribution
companies in Germany led to additional staff costs of EUR 14.4m
offsetting the related drop in services used. Second, adjustments to
the parameters for interest-bearing staff-related provisions
(discount rate, salary increases and employee turnover) were carried
out in the 2014 financial year. These adjustments resulted in a
negative effect of EUR 22.5m as a consequence of the high level of
staff-related provisions on the balance sheet of Austrian Post.

Operational staff costs for salaries and wages remained at the
prior-year level, adjusted to take account of the integration of the
distribution companies in the Austrian Post Group. This shows that
the consistent implementation of measures designed to enhance
efficiency and improve the staff structure succeeded in compensating
for inflation-related cost increases. In addition to the ongoing
operational staff costs, the staff costs also include non-operational
staff costs such as termination benefits and various changes in
provisions which are primarily related to employment rights of civil
servants at Austrian Post. In 2014, these costs were higher than in
the previous year mainly due to the previously mentioned adjustments
to the parameters of interest-bearing provisions.

Other operating income rose in the period under review to EUR 134.4m,
compared to EUR 69.7m in the previous year. This significant increase
is due to the sale of Austrian Post's former headquarters in Vienna's
inner city. The disposal of the property, which took place after an
international bidding process, was started in June 2014 and concluded
on December 22, 2014 with the signing of a sale agreement. This
resulted in a gain from deconsolidation of EUR 62.4m recognised as
other operating income.

In the 2014 financial year, earnings before interest, tax,
depreciation and amortisation (EBITDA) of the Austrian Post Group was
up 9.6% or EUR 29.3m to EUR 333.8m. EBITDA growth was higher than
revenue growth primarily due to special effects such as the sale of
the former corporate headquarters. This positive effect was partly
offset by negative ones such as higher staff costs and various
write-downs and structural measures in connection with the
trans-o-flex Group.

On balance, depreciation, amortisation and impairment losses totalled
EUR 136.9m during the period under review, comprising a year-on-year
increase of EUR 18.4m. This rise was mainly the result of impairment
losses on goodwill of EUR 48.6m compared to EUR 32.4m in the previous
year. In particular, impairment on goodwill of EUR 38.9m was reported
for the trans-o-flex Group as a consequence of the highly competitive
market situation and reduced earnings situation. Another significant
impairment loss on goodwill totalling EUR 9.7m was reported for the
Polish subsidiary PostMaster Sp.z o.o.

Taking account of depreciation, amortisation and impairments,
earnings before interest and tax (EBIT) amounted to EUR 196.9m,
representing a 5.9% improvement from the prior-year level.
Accordingly, the EBIT margin was 8.3%. After deducting income tax,
the Group's net profit (profit after tax for the period) amounted to
EUR 146.8m, up from EUR 124.0m in 2013. This results in earnings per
share of EUR 2.17 for the 2014 financial year. The higher increase in
net profit compared to operating earnings is mainly due to a negative
special effect recognised in the prior-year financial result. The
prior-year included the complete write-down of loans granted to the
joint venture MEILLERGHP. As of February 20, 2015 Austrian Post has
disposed its stake in the company.

From a divisional perspective, the Mail & Branch Network Division
reported an EBITDA of EUR 311.0m in the 2014 financial year, a drop
of 3.0% or EUR 9.7m from the prior-year level, which can be
attributed mainly to the overall revenue decline caused by electronic
substitution and reduced revenue in the Direct Mail and Branch
Services areas. The division generated an EBIT of EUR 270.0m, a drop
of 4.2% year-on-year. Impairment losses on goodwill in the division
totalled EUR 5.4m in 2013, whereas impairment losses on goodwill of
the Austrian Post subsidiaries in South East and Eastern Europe
during 2014 amounted to EUR 9.7m.

EBITDA of the Parcel & Logistics Division was EUR 41.4m compared to
EUR 42.8m in the 2013 financial year. Negative effects relating to
the trans-o-flex Group impacted the earnings situation in the
previous year as well as in the current reporting period. The
efficiency enhancement programme being implemented in the
trans-o-flex Group includes the reintegration of external services by
taking over selected distribution partners. The objective is to
optimize operating costs and exploit synergies in the field of
distribution logistics. Write-downs and structural measures relating
to the integration of the distribution companies totalled EUR 9.8m in
2014 (2013: EUR 7.1m of write-downs). Furthermore, as previously
mentioned, an impairment loss on goodwill of the trans-o-flex Group
of EUR 38.9m was recognised during the period under review, compared
to an impairment loss of EUR 27.0m for this company in 2013. As a
result, EBIT of the Parcel & Logistics Division was minus EUR 19.5m,
compared to minus EUR 4.9m in the previous year.

The Corporate Division basically encompasses all expenses for central
departments in the Group as well as staff-related provisions. In
addition, the division encompasses innovation management and the
development of new business models. The combination of positive
effects described above in connection with the sale of the former
company headquarters with higher staff-related costs, especially
adjustments in the parameters for interest-bearing staff-related
provisions, resulted in an EBIT of minus EUR 53.6m in this division,
compared to minus EUR 90.9m in the previous year.

CASH FLOW AND BALANCE SHEET The gross cash flow totalled EUR 283.3m
in the 2014 financial year compared to EUR 304.8m in 2013. The cash
flow from operating activities of EUR 232.2m was EUR 18.3m lower than
in the previous year. The 2014 financial year included payments for
wage-related contributions from previous periods to the amount of
about EUR 8m. In addition, the less pronounced reduction in the level
of receivables compared to the previous year decreased the cash flow.

The cash flow from investing activities at minus EUR 69.4m in 2014
was below the comparable prior-year figure. There were hardly any
payments made in the reporting period in connection with
acquisitions. The acquisition of property, plant and equipment of EUR
82.6m was also somewhat below the prior-year level. On balance, the
free cash flow in 2014 totalled EUR 162.8m, up from EUR 60.5m in
2013. The free cash flow before acquisitions and securities was EUR
151.7m, thus remaining at a stable high level. This comprises a good
basis for financing future investments and dividend payments.

Austrian Post pursues a conservative balance sheet policy and
financing structure. This is demonstrated by the high equity ratio,
low financial liabilities and solid cash and cash equivalent levels
invested with the least possible risk. Equity of the Austrian Post
Group totalled EUR 702.7m as at December 31, 2014, corresponding to
an equity ratio of 42.1%. An analysis of the financial position of
the company shows a high level of current and non-current financial
resources of EUR 317.3m (cash and cash equivalents of EUR 264.1m as
well as securities of EUR 53.1m). These financial resources are in
contrast to financial liabilities of only EUR 17.7m.

EMPLOYEES The average number of full-time employees at the Austrian
Post Group totalled 23,912 people during the period under review,
comprising a decrease of 299 employees from the prior-year period.
Most of Austrian Post's staff (full-time equivalents) is employed by
the parent company Österreichische Post AG (a total of 18,403
full-time equivalents). A total of 5,508 people (full-time
equivalents) are employed by the subsidiaries.

OUTLOOK 2015 Generally speaking, the basic trends in the postal
sector are set to persist in 2015. With respect to its revenue
development, the business model of Austrian Post is oriented to
compensating for decline in the mail segment by generating growth in
the parcel business. On this basis, Austrian Post aims to achieve an
average revenue growth rate of 1-2% p.a. over the near-term future. A
revenue increase in this range is also expected for 2015.

The foundation for this prediction is the continuation of the basic
trends shaping volume development. Revenue in the mail segment will
continue to be impacted by ongoing volume decline for addressed mail
due to electronic substitution. In line with international trends,
the decrease in addressed mail volume is likely to amount to 3-5% per
year. The market for addressed and unaddressed direct mail items will
continue to be subject to differing volume trends. Several customer
segments such as the traditional mail order business and retail
stores are under pressure from the increasing activities of online
businesses. This could lead to a further reduction in their
advertising spending. The development of the parcel and logistics
business is also dominated by two trends. Growth of 3-6% continues to
be expected in the private customer parcel segment, depending on the
region. The steadily growing field of electronic commerce is the
driving force behind this increase. The positive development of the
business parcel segment depends on a stable economy and the
competitive situation. However, the subdued economic situation is
unlikely to provide any impetus to parcel growth. In particular, the
priority in the international parcel business is to exploit the
company's good market position and take advantage of the resulting
opportunities.

Austrian Post has developed a package of measures in order to achieve
an ongoing performance improvement and to further increase the
efficiency of the services provided. Structures and processes in both
mail and parcel logistics are being consistently improved. New
sorting technologies will enable Austrian Post to consistently
exploit cost reduction potential. Profitability is the top priority
especially in the company's international business operations. One
focal point is the continuation of the efficiency enhancement
programme in the trans-o-flex Group, entailing a reorganisation of
process, distribution and staff structures. With respect to its
earnings development, Austrian Post remains committed to its target
of achieving a sustainable EBITDA margin of about 12%. The company is
also pursuing this objective for the 2015 financial year, along with
the goal of achieving an ongoing improvement in the earnings before
interest and tax (EBIT).

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. Further investments will primarily serve the purpose of
modernisation, the replacement of existing facilities and vehicles
along with capacity expansion in the parcel segment. As a result,
operational capital expenditure (CAPEX) is expected to reach a level
of about EUR 80-90m in 2015, and will focus on sorting technologies,
logistics and customer solutions. In addition, Austrian Post will
commence construction of its new corporate headquarters in Vienna's
third district. The project is expected to be completed in 2017. With
this new building, a commercial property owned by Austrian Post will
be developed in accordance with the principles of efficiency and
value maximisation.

The Management Board will propose to the Annual General Meeting
scheduled for April 15, 2015 to approve the distribution of a
dividend totalling EUR 1.95 per share for the 2014 financial year.
Thus, the company continues its attractive dividend policy on the
basis of a solid balance sheet structure and the generated cash flow.
Austrian Post aims to distribute at least 75% of the Group net profit
to its shareholders. Assuming the company continues its successful
business development, the dividend should develop further in line
with the Group's results.

OVERVIEW OF KEY INDICATORS

Change
2013/2014
EUR m 2013 2014 % EUR m Q4 2013 Q4 2014
Revenue 2,366.8 2,370.5 0.2% 3.7 632.6 637.9
thereof Mail & Branch 1,510.3 1,487.7 -1.5% -22.6 402.9 402.0
Network Division*
thereof Parcel & Logistics 855.6 882.0 3.1% 26.4 229.4 235.6
Division*
thereof Corporate/ 0.9 0.8 -11.0% -0.1 0.3 0.2
Consolidation*
Other operating income 69.7 134.4 92.9% 64.8 19.5 84.3
Raw materials, consumables and -753.3 -744.5 -1.2% -8.8 -196.7 -199.1
services used
Staff costs -1,073.5 -1,109.5 3.4% 36.0 -289.2 -294.1
Other operating expenses -298.6 -317.0 6.2% 18.4 -82.6 -96.8
Results from financial assets
accounted for using the equity -6.6 -0.1 98.3% 6.4 -1.7 1.4
method
Earnings before interest, tax,
depreciation and amortisation 304.5 333.8 9.6% 29.3 81.9 133.6
(EBITDA)
Depreciation and amortisation -83.5 -84.9 1.7% 1.4 -21.1 -22.2
Impairment losses -35.1 -52.0 48.4% 17.0 -6.4 -47.1
Earnings before interest and tax 186.0 196.9 5.9% 10.9 54.4 64.2
(EBIT)
thereof Mail & Branch 281.8 270.0 -4.2% -11.8 73.0 74.5
Network Division
thereof Parcel & Logistics -4.9 -19.5 <-100% -14.6 9.4 -38.1
Division
thereof Corporate/ -90.9 -53.6 41.1% 37.3 -28.1 27.9
Consolidation
Other financial result -14.8 -2.8 80.7% 11.9 -12.0 -0.4
Earnings before tax (EBT) 171.2 194.0 13.3% 22.8 42.5 63.8
Income tax -47.2 -47.2 0.0% 0.0 -23.3 -16.8
Profit for the period 124.0 146.8 18.4% 22.8 19.2 47.1
Earnings per share (EUR)** 1.82 2.17 18.9% 0.35 0.28 0.70
Cash flow from operating 250.4 232.2 -7.3% -18.3 78.7 67.6
activities
Investments in property, plant -96.4 -82.6 -14.3% 13.8 -33.0 -29.6
and equipment (CAPEX)
Free cash flow before 153.9 151.7 -1.4% -2.2 44.7 43.2
acquisitions/securities

* The presentation of revenue was adjusted so that cross-segment business
relationships among subsidiaries or between subsidiaries and Austrian Post are
no longer included in the revenue with third parties (formerly external sales).

** Undiluted earnings per share in relation to 67.552.638 shares

The Financial Report 2014 is available on the Internet at
www.post.at/ir --> Publications --> Financial Reports.

Further inquiry note:
Austrian Post
Ingeborg Gratzer
Head of Press Relations & Internal Communications
Tel.: +43 (0) 57767-24730
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