EANS-Adhoc: Österreichische Post AG / AUSTRIAN POST Q1-3 2012: Revenue growth and earnings improvement in the first nine months of 2012; Outlook for 2012 confirmed

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9-month report

16.11.2012

- Increased revenue - Revenue up 0.8% in the first three quarters
of 2012 (+1.7% excl. Benelux) - Current economic environment leads
to increased volatility - Operational measures - Austria: delivery
optimisation, agreement on new working time model - Germany: focus
on cost efficiency of distribution logistics - Further earnings
growth - EBIT rise of 14.7% to EUR 125.6m in Q1-3 - Improved
operating results in both divisions - Strong cash flow and solid
balance sheet - Free cash flow before acquisitions/divestments up
18.5% to EUR 131.1m - Solid balance sheet featuring equity ratio of
41.8% - Outlook for 2012 confirmed - Slightly rising revenue -
EBITDA margin at the upper end of the targeted range of 10-12%

OVERVIEW OF AUSTRIAN POST The domestic and international business
environment of Austrian Post and its customers continued to be
impacted by economic uncertainty. Against the backdrop of this
dampened economic situation, Group revenue developed in line with
expectations, rising by 0.8% in the first three quarters of 2012.
Adjusted to take account of the Benelux subsidiaries disposed of in
the first half of the year, a revenue increase of 1.7% was achieved.
From a divisional perspective, the Mail & Branch Network Division was
subject to structural changes, in particular the ongoing substitution
of traditional letter mail by electronic forms of communication.
Moreover, advertising expenditures proved to be rather volatile as a
response to the prevailing economic environment. In spite of these
difficult conditions, revenue of the Mail & Branch Network Division
could be maintained at a stable level. In contrast, the Parcel &
Logistics Division profited from the trend towards online shopping,
which resulted in increased parcel volumes. Accordingly, division
revenue climbed by 5.1% (excl. the Benelux subsidiaries). The solid
development of both divisions is reflected in the Group's earnings
before interest and tax (EBIT), which increased by 14.7% from the
previous year to EUR 125.6m. The Mail & Branch Network Division as
well as the Parcel & Logistics Division made a positive earnings
contribution on an operational level. Whereas the Mail & Branch
Network Division succeeded in defending its market position and
profitability, even in the light of a difficult business environment,
the Parcel & Logistics Division improved its EBIT to EUR 16.4m
compared to the negative operating results posted in the previous
year. "For the company's future business development it is important
to further develop Austrian Post in line with its strategic
cornerstones", says CEO Georg Pölzl. In this regard, Austrian Post
succeeded in expanding its market leadership in the core business and
taking important steps to enhance efficiency. Growth drivers were
strengthened based on expansion measures in Poland, Bulgaria and
Romania, whereas profitability was improved by the disposal of the
Benelux subsidiaries. Greater emphasis was continuously placed on
customer orientation by the offering of self-service solutions. From
a financial perspective, Austrian Post will continue to prudently and
purposefully make use of the generated operating cash flow in order
to finance sustainable efficiency improvements, structural measures
as well as future-oriented investments. At the same time, the company
is determinedly working to ensure a more enhanced customer focus on
the part of its business activities. Accordingly, online and
self-service solutions were strongly promoted during the first nine
months of the current financial year, and the service and product
portfolio along the customers' value chain was further developed.
"Against the backdrop of an ongoing uncertain economic environment,
we expect a slightly positive revenue development in the entire year
2012. We will continue to attach great importance to the
profitability of the services offered, so that we expect an EBITDA
margin at the upper end of the targeted range of 10-12% for the
entire year 2012", CEO Pölzl adds.

REVENUE DEVELOPMENT IN DETAIL In the first three quarters of 2012,
Austrian Post succeeded in raising its total revenue by 0.8%, to EUR
1,722.9m. Adjusted to take account of the disposed and deconsolidated
subsidiaries in the Benelux region, the year-on-year revenue increase
actually totaled 1.7%. Excluding the Benelux, revenue fell by 2.1% in
the third quarter, which featured one working day less than in Q3
2011. Group revenue developed in line with expectations against the
backdrop of an uncertain economic situation. Revenue in the Mail &
Branch Network Division remained stable at EUR 1,091.2m. On the one
hand, the volume development was impacted by the structurally-related
decline in letter mail caused by electronic substitution. On the
other hand, it was characterised by enhanced volatility in the
monthly development of revenue from direct mail items. In turn, this
was based on the impact of cyclical uncertainty on the advertising
industry. At the same time, there was a volume shift from direct mail
items to higher quality letter mail products. In addition, online
shopping shipments are increasingly being sent as letter mail items
instead of parcels. Moreover, the change in the product portfolio of
Austrian Post as of May 1, 2011 led to positive effects in the first
four months of the 2012 financial year. The former Branch Network
Division is now encompassed in the business area "Branch Services" in
the Mail & Branch Network Division. Revenue and costs of this new
management structure declined during the period under review. On
balance, Austrian Post featured a total of 1,900 postal service
points as at September 30, 2012, of which 1,308 are third-party
operated postal partner offices. Revenue of the Parcel & Logistics
Division rose by 2.3% in the first three quarters of 2012 to EUR
632.0m. The revenue of the disposed Benelux subsidiaries is still
partially included in the income statement. The Dutch company was
deconsolidated as at March 15, 2012, whereas the Belgian subsidiary
was deconsolidated effective May 31, 2012. Adjusted for these
companies, revenue in the first nine months of 2012 climbed by 5.1%.
From a regional perspective, the Austrian parcel market generated the
highest growth.

REVENUE BY DIVISION*

EUR m Q1-3 Q1-3 Change Q3 Q3
2011 2012 in % 2011 2012
Total revenue 1,709.9 1,722.9 0.8% 572.0 549.8
Revenue excl.
Benelux
subsidiaries** 1,676.8 1,705.7 1.7% 561.4 549.8
Mail &
Branch Network*** 1,091.0 1,091.2 0.0% 364.5 349.6
Parcel & Logistics 618.1 632.0 2.3% 207.2 201.1
Parcel & Logistics
excl. Benelux
subsidiaries** 584.9 614.7 5.1% 196.5 201.1
Calendar working
days in Austria 189 188 - 65 64

* External sales of the divisions

** The closing of the disposal of trans-o-flex Nederland B.V. took
place as at March 15, 2012, for trans-o-flex Belgium B.V.B.A as at
May 31, 2012 *** Reporting according to the new segment structure as
of January 1, 2012; figures for 2011: pro-forma consolidation

INCOME STATEMENT The revenue development of Austrian Post in the
first nine months of 2012 also affected operating expenses for raw
materials, consumables and services used, which rose by EUR 14.3m to
EUR 562.9m. In particular, cost increases were due to higher
purchases of external transport services to handle rising parcel
volumes, as well as higher commissions for postal partner offices as
a consequence of the structural transformation of the branch network.
In contrast, staff costs declined by 2.0% year-on-year, or EUR 16.7m,
to EUR 800.3m. The main part of this figure consists of operational
staff costs, which increased by 1.5% compared to the first three
quarters of 2011. The average number of employees in the Group fell
by 226 from the prior-year period, declining to 23,260 employees
(full-time equivalents). Staff costs also encompass non-operational
staff costs of EUR 39.3m in the first three quarters of 2012,
including all investments designed to achieve a sustainable
improvement in the cost structure such as restructuring measures and
severance payments. Furthermore, due to internationally low interest
rate levels, it was already necessary in the first quarter and, once
again, in the third quarter to reduce the discount interest rate for
existing, interest-bearing provisions of Austrian Post by 0.25
percentage points in each case. The lower discount factor led to
increased provisioning requirements totalling EUR 17.7m. Allocations
were also made to various provisions relating to employee
under-utilisation or employees transferring to the federal public
service during the reporting period. All in all, the provisions for
employee under-utilisation reported on the balance sheet of Austrian
Post, currently at EUR 239.4m, have remained constant for the most
part since the beginning of 2012. The cash-related use of these
provisions amounted to EUR 19.9m in the first nine months. The result
of the investments consolidated at equity totalling minus EUR 12.1m
is mainly due to the impairment loss of EUR 9.6m recognised for
Austrian Post's 65% stake in its subsidiary MEILLERGHP. In the first
nine months of 2012, earnings before interest, tax, depreciation and
amortisation (EBITDA) of the Austrian Post Group improved by 6.9%, to
EUR 187.7m. Accordingly, the EBITDA margin was 10.9%. Earnings before
interest and tax (EBIT) rose by 14.7% to EUR 125.6m, corresponding to
an EBIT margin of 7.3%. Third-quarter EBIT rose 18.3% to EUR 33.3m.
From a divisional perspective, both business divisions improved their
operating results during the period under review. The EBIT of EUR
189.0m reported in the Mail & Branch Network Division in Q1-3 2012
included an impairment loss of EUR 9.6m. For its part, the Parcel &
Logistics Division also showed higher earnings, with EBIT improving
to EUR 16.4m in the first nine months of 2012, following a negative
EBIT of EUR 5.7m reported in the first three quarters of 2011. On the
back of the disposal of the subsidiaries in Belgium and the
Netherlands and the related negative impact on the company's balance
sheet in 2011, Austrian Post has laid a sound foundation for the
further positive development of the division. EBIT of the Corporate
segment improved from minus EUR 81.8m to minus EUR 79.2m. Earnings
before tax of the Austrian Post Group rose 16.6% to EUR 123.4m. After
deducting income taxes totalling EUR 28.6m, the Group net profit
(profit after tax for the period) amounted to EUR 94.9m. This
corresponds to earnings of EUR 1.40 per share for the first nine
months of 2012 (+20.2%) or EUR 0.36 per share for the third quarter,
up from EUR 0.25 per share in the prior-year period.

EBIT BY DIVISION

EUR m Q1-3 Q1-3 Change Q3 Q3
2011 2012 in % 2011 2012
Total EBIT 109.5 125.6 14.7% 28.2 33.3
Mail &
Branch Network* 196.9 189.0 -4.0% 74.2 53.9
Parcel & Logistics -5.7 16.4 >100% -15.9 5.0
Corporate -81.8 -79.2 3.1% -30.1 -25.0
Earnings per share 1.17 1.40 20.2% 0.25 0.36

* Reporting according to the new segment structure as of January 1,
2012; figures for 2011: pro-forma consolidation

CASH FLOW Operating cash flow before changes in working capital
amounted to EUR 156.4m in the first nine months of 2012, or EUR 10.5m
above the comparable prior-year period. During the period under
review, the cash flow from changes in net working capital amounted to
an inflow of EUR 15.5m. This resulted mainly from a shift in the
payment dates of the salaries of civil servants, which led to a lower
cash flow burden. The cash flow from investing activities of minus
EUR 78.9m includes cash outflows for the purchase of property, plant
and equipment (CAPEX) totalling minus EUR 52.8m. The free cash flow
before acquisitions/divestments amounted to EUR 131.1m, or EUR 20.4m
above the first three quarters of 2011. All in all, a total of EUR
38.0m in expenditures related to acquisitions and the disposal of
Austrian Post's subsidiaries in the Benelux.

EMPLOYEES The average number of full-time employees at the Austrian
Post Group totalled 23,260 people in the first three quarters of
2012, corresponding to a decline in the workforce by 226 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
19,691 full-time equivalents).

OUTLOOK FOR 2012 Austrian Post expects a slightly positive revenue
development for the entire year 2012 without the disposed
subsidiaries in the Benelux. The market environment in the mail and
parcels business will continue to be impacted by the subdued economic
environment as well as structural changes in the postal and logistics
sector. A further decline in addressed letter mail volumes is
expected as a result of electronic substitution, whereas increasing
e-commerce should result in parcel volume growth. The ongoing
economic uncertainties could continue to result in a volatile
development of the advertising industry. One focal point of the Group
is clearly 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
EBITDA margin for the entire year 2012 is expected to be at the upper
end of this targeted range. The operating cash flow generated by
Austrian Post is prudently and purposefully used to finance
sustainable efficiency improvements, structural measures and
future-oriented investments, and also serves as the basis for an
attractive dividend policy. Total capital expenditure (CAPEX) in 2012
is expected to reach a level of about EUR 90m. This will primarily
focus on replacement investments in existing facilities as well as on
investments to further improve mail and parcel logistics operations.
Selective acquisitions will focus on growth markets as well as on
strengthening and further developing the company's core business in
Austria.

PERFORMANCE OF DIVISIONS MAIL & BRANCH NETWORK DIVISION Since the
beginning of 2012, the previous Mail Division and the Branch Network
Division have been merged to create the new Mail & Branch Network
Division. The new segment reporting reflects the current
organisational, management and reporting structure. Divisional
revenue remained largely constant at EUR 1,091.2m in the first nine
months of 2012. In addition to structural trends, the current
financial year was also shaped by economic uncertainties. In the
Letter Mail Business Area, revenue improved by 3.4% from the
prior-year period to EUR 571.9m. The trend towards decreasing letter
mail volumes related to electronic substitution continued. However,
this structural trend was counteracted by volume shifts from direct
mail items to higher quality letter mail products as well as various
Internet orders, which are no longer sent as parcels but as letter
mail items. In addition, changes in the product portfolio of the
Letter Mail Business Area, which took effect on May 1, 2011, still
continued to deliver positive contributions to revenue effects in the
first four months of the 2012 financial year compared to the
prior-year. Revenue of the Direct Mail Business Area fell to EUR
318.9m in the first three quarters of 2012. This development is
primarily attributable to the current economic uncertainty, which has
in turn led to greater volatility in the revenue development of the
advertising industry. In particular, a decline in business from mail
order customers was noticeable. In contrast, revenue of the Media
Post Business Area improved by 4.2% in the first nine months of 2012,
to EUR 102.4m. Both revenue and costs declined in the former Branch
Network Division, which is now reported in the Branch Services
Business Area. Half of the revenue decrease is due to the
reclassification of the value logistics operations as part of the
Parcel & Logistics Division, whereas the other half is the result of
declining revenue from retail products and financial services. On
balance, EBIT of the Mail & Branch Network Division was down by EUR
7.9m in the first nine months of 2012, which is largely due to an
impairment loss of EUR 9.6m reported for Austrian Post's stake in the
at-equity consolidated company MEILLERGHP.

PARCEL & LOGISTICS DIVISION External sales of the Parcel & Logistics
Division climbed 2.3% in the first three quarters of 2012, to EUR
632.0m. Adjusted to take account of the former Benelux subsidiaries,
the division achieved revenue growth of 5.1% in a year-on-year
comparison. The deconsolidation of the Dutch company took place as at
March 15, 2012, and the disposal of Belgian subsidiary took effect on
May 31, 2012. Since the beginning of the year, the company
Post.Wertlogistik GmbH specialising in value logistics has been a new
part of the portfolio offered by the Parcel & Logistics Division,
whereas it was previously assigned to Austrian Post's former Branch
Network Division. In addition, the firm Systemlogistik Distribution
GmbH acquired as at May 31, 2012 expands the range of services
offered by the division with respect to the warehousing, picking and
packing of goods. The Premium Parcel Business Area (parcel delivery
within 24 hours), which is mainly used in the business-to-business
area, generated revenue of EUR 483.8m in the first nine months of
2012 (+2.7% excluding Benelux). The German subsidiary trans-o-flex,
which is currently focusing on implementing an efficiency enhancement
programme in its distribution logistics, accounted for about 60% of
this revenue. Parcel volumes of business customers in Austria
increased at a high rate relative to the rest of the Business Area,
whereas intensified price pressure was evident in South East and
Eastern Europe against the backdrop of a good volume development. The
Standard Parcel Business Area used mainly for shipments to private
customers also posted growth. Revenue rose by 7.7%, to EUR 126.8m.
EBIT of the Parcel & Logistics Division in the first three quarters
of 2012 amounted to EUR 16.4m, significantly above the prior-year
level, which was considerably burdened by the negative impact on the
balance sheet arising from the disposal of the Benelux subsidiaries.

The interim report for the first three quarters of 2012 is available
on 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

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