Quarterly Report • May 7, 2015
Quarterly Report
Open in ViewerOpens in native device viewer
Interim report for the first quarter of 2015 | Austrian Post
| Q1 2014 | Q1 2015 | Change % | ||
|---|---|---|---|---|
| Income statement | ||||
| Revenue | EUR m | 598.4 | 601.9 | 0.6% |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | EUR m | 78.8 | 75.1 | –4.6% |
| EBITDA margin1 | % | 13.2% | 12.5% | – |
| Earnings before interest and tax (EBIT) | EUR m | 58.2 | 53.9 | –7.4% |
| EBIT margin1 | % | 9.7% | 9.0% | – |
| Earnings before tax (EBT) | EUR m | 57.4 | 57.4 | –0.2% |
| Profit for the period | EUR m | 43.7 | 43.8 | 0.2% |
| Earnings per share2 | EUR | 0.64 | 0.65 | 0.4% |
| Employees (average for the period, full-time equivalents) | 23,732 | 23,330 | –1.7% | |
| Cash flow | ||||
| Gross cash flow | EUR m | 75.4 | 82.8 | 9.8% |
| Cash flow from operating activities | EUR m | 50.6 | 59.6 | 17.8% |
| Investment in property, plant and equipment (CAPEX) | EUR m | –11.2 | –15.8 | –41.8% |
| Cash flow from acquisition/divestments | EUR m | –0.2 | –0.1 | 62.0% |
| Free cash flow before acquisitions/securities | EUR m | 38.0 | 104.6 | >100% |
| Balance sheet | Dec. 31, 2014 | March 31, 2015 | Change % | |
| Total assets | EUR m | 1,671.0 | 1,708.2 | 2.2% |
| Equity | EUR m | 702.7 | 745.7 | 6.1% |
| Non-current assets3 | EUR m | 1,026.0 | 1,020.4 | –0.5% |
| Current assets | EUR m | 645.0 | 687.8 | 6.6% |
| Net debt | EUR m | –99.7 | 2.4 | >100% |
| Equity ratio | % | 42.1% | 43.7% | – |
| Capital employed | EUR m | 733.8 | 673.6 | –8.2% |
EBIT and EBITDA in relation to Group revenue
Undiluted earnings per share in relation to 67,552,638 shares
Includes assets held for sale to the amount of EUR 0.6m as at December 31, 2014
In the first quarter of 2015, revenue of the Austrian Post Group at EUR 601.9m was slightly above the prior-year level. Revenue growth of 2.2% in the parcel segment completely offset the slight decline of 0.3% in the mail business, which continues to be affected by the ongoing electronic substitution of traditional letter mail. In addition, branch network revenue decreased whereas revenue from direct mail items developed solidly, a development which is also related to the good business generated before Easter. Also the upward adjustment of postal rates as of March 1, 2015 had a positive effect on overall revenue development. The trend towards increased e-commerce is continuing in the parcel segment, leading to further growth of parcel volumes. This not only has a positive influence on the Austrian parcel business, but also on Austrian Post's parcel subsidiaries in South East and Eastern Europe which generated high growth during the reporting period. However, the competitive environment in the parcel market is getting more challenging; this also applies to Germany where Austrian Post's parcel subsidiary trans-o-flex operates. As a result, revenue in Germany declined in the first quarter of the year due to the tough competition and high price pressure.
Earnings before interest and tax (EBIT) at EUR 53.9m were down by EUR 4.3m from the previous year. This decline also includes expenses resulting from increased staff-related provisions due to the ongoing low interest rate environment. On an operational basis, measures to further optimise costs and enhance efficiency were continued. Moreover, we also pressed ahead with investments at the customer interface during the reporting period, and continued to expand our self-service offering. Austrian Post customers now have about 270 self-service zones and 150 pick-up stations at their disposal throughout Austria. In spite of our extensive investment programme, cash flow is above the prior-year level, securing the company's ability to finance investments and dividends.
As a result, Austrian Post was able to distribute a dividend of EUR 1.95 per share on April 29, 2015 for the past financial year. Thus, Austrian Post once again underlines its clear capital market positioning as a reliable dividend stock. The focus of our strategic activities is on reliability and stability for the owners and other stakeholders of our company, and this approach will be continued in the future. Looking ahead to the full year, we confirm the previously communicated outlook for 2015. We expect a Group revenue increase in the range of 1–2%. At the same time, we target an EBITDA margin of around 12% and a further improvement in EBIT.
Vienna, April 29, 2015
The Management Board
Georg Pölzl Walter Oblin Chairman of the Management Board Member of the Management Board Chief Executive Officer Chief Financial Officer
Mail & Branch Network Division Parcel & Logistics Division
Walter Hitziger Peter Umundum Member of the Management Board Member of the Management Board
Global economic growth remains moderate at present. The International Monetary Fund (IMF) expects an economic growth rate of 3.5% in 2015 in contrast to 3.4% in each of the past two years. The larger economies performed better than in the recent past, whereas economic momentum slowed down somewhat in the emerging and developing markets. According to the IMF, the eurozone will have to adjust to a longer-term period of weak economic growth. However, the eurozone economy slightly picked up recently. For this reason, the IMF expects growth of 1.5% in 2015 and 1.6% in 2016, compared to an economic expansion of only 0.9% in 2014. Like other economic regions, the eurozone is also profiting from the low oil price, and both the bond buying programme and interest rate reductions of the European Central Bank also had a positive effect. The export industry also benefited from the significant rise in value of the US dollar (IMF, April 2015).
Austria is lagging behind other eurozone economies. Following marginal growth in 2014, the Austrian economy is expected to expand only very gradually in 2015. According to forecasts of the Austrian Institute of Economic Research (WIFO), Austrian GDP will rise by 0.5% in 2015 and 1.3% in 2016. The combination of an unfavourable order situation, the decline in domestic and foreign consumer demand as well as the bleak business outlook leads to a general reluctance to commit to new investments. However, the markets in South East and Eastern Europe, which are important to the Austrian economy, are developing more favourably (WIFO, March 2015). The IMF expects economic growth of 2.9% in the CEE region in 2015. Turkey (+3.1%), Romania (+2.7%) and Hungary (+2.7%) are all anticipated to post growth rates of around the 3% threshold in 2015. The German economy is forecast to grow by 1.6% in 2015 (IMF, April 2015).
In addition to the overall economic environment, the business development of Austrian Post is influenced by other international trends which pose risks but also open up opportunities.
The electronic substitution of traditional letter mail is continuing and is essentially irreversible. The baseline scenario assumes a drop of 3–5% annually in addressed mail volumes. In contrast, interactive physical media are an indispensable part of the advertising strategy of many Austrian companies. Unaddressed direct mail items also rank among the most popular communications channels. In turn, the volume of direct mail items strongly depends on the intensity of advertising activities by companies.
Parcel volumes in the private customer segment continue to increase due to the growing importance of online shopping against the backdrop of intensified competition. The development of the B2B market is still being shaped by the clouded economic situation. The development of the international parcel and freight business is just as dependent on general economic trends, international trade flows and related price developments. Competitive intensity and price pressure remain high in this area. Trade flows and the required logistics services are becoming increasingly globalised.
The legal framework for Austrian Post's business operations is mainly based on the Austrian Postal Market Act, which took full effect on January 1, 2011. The cornerstones of this law are as follows:
An adjustment in postal rates was approved by the relevant regulatory authorities – the Post Control Commission and the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) – on September 15, 2014. An inflation-related price increase for mail took place on March 1, 2015 following the last product and price reform in 2011.
Austrian Post sold its stake in the German printing services company MEILLERGHP effective February 20, 2015. Austrian Post previously owned a 65% shareholding and Swiss Post 35% of the company. On February 7, 2014, MEILLERGHP submitted an application for judicial reorganisation insolvency proceedings, which were terminated on February 15, 2015.
Effective March 31, 2015, Austrian Post disposed of its 100% stake in feibra Magyarország Kft., which specialises in distributing unaddressed and addressed direct mail items as well as newspapers and magazines in Hungary. As of December 31, 2014, the assets and liabilities of the company had been classified as a disposal group and correspondingly recognised and disclosed seperately in the consolidated balance sheet.
In the first quarter of 2015, Group revenue of Austrian Post rose slightly by 0.6% compared to the prior-year level to EUR 601.9m. The parcel business showed further revenue growth during the reporting period, thus offsetting the slight revenue decline in the Mail & Branch Network Division.
| EUR m | Q1 20141 | Q1 2015 | Change | |
|---|---|---|---|---|
| % | EUR m | |||
| Revenue | 598.4 | 601.9 | 0.6% | 3.5 |
| Mail & Branch Network | 378.7 | 377.5 | –0.3% | –1.2 |
| Parcel & Logistics | 219.5 | 224.4 | 2.2% | 4.9 |
| Corporate | 0.2 | 0.0 | –84.7% | –0.2 |
| Calendar working days in Austria | 62 | 62 | – | – |
1 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).
The Mail & Branch Network Division accounted for the largest share or 62.7% of total Group revenue in the first three months of 2015. On balance, revenue of the division was down 0.3% in the reporting period to EUR 377.5m. This decline is due to the ongoing electronic substitution of letters as well as decreasing revenue in the branch network. In contrast, the upward adjustment of postal rates as of March 1, 2015 positively impacted the division's revenue development.
The Parcel & Logistics Division generated 37.3% of total Group revenue during the reporting period. Divisional revenue rose 2.2% to EUR 224.4m in the first quarter of 2015. From a regional perspective, both the Austrian market and the South East and Eastern European region showed considerable growth, whereas revenue declined in Germany due to the ongoing strong competition and price pressure.
With respect to its geographical segments, Austrian Post generated 73.0% of its Group revenue in Austria, 22.0% in Germany and 5.0% in South East and Eastern Europe.
| EUR m | Q1 20141 | Q1 2015 | Change | |
|---|---|---|---|---|
| % | EUR m | |||
| Revenue with third parties (external) | 378.7 | 377.5 | –0.3% | –1.2 |
| Letter Mail & Mail Solutions | 207.0 | 206.4 | –0.3% | –0.6 |
| Direct Mail | 105.7 | 109.1 | 3.3% | 3.5 |
| Media Post | 35.3 | 33.6 | –4.7% | –1.7 |
| Branch Services | 30.8 | 28.4 | –7.8% | –2.4 |
| Revenue with other segments (intra-Group) | 19.1 | 20.4 | 6.7% | 1.3 |
| Total revenue | 397.8 | 397.9 | 0.0% | 0.1 |
1 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).
Revenue of the Mail & Branch Network Division totalled EUR 377.5m in the first quarter of 2015. Of this amount, 54.7% can be attributed to the Letter Mail & Mail Solutions business, whereas Direct Mail accounts for 28.9% of total divisional revenue and the field of Media Post, i.e. the delivery of newspapers and magazines has a 8.9% share. Branch Services accounts for 7.5% of divisional revenue. Generally speaking, revenue development is strongly influenced by election effects. Positive revenue effects in the current reporting period were at a similar level to the first quarter of 2014.
Letter Mail & Mail Solutions revenue at EUR 206.4m declined slightly from the previous year as expected. The basic trend towards declining mail volumes resulting from the substitution of letters by electronic forms of communication continues. Moreover, the absence of one-time mailings by certain customers in the telecommunications, finance and insurance sectors negatively
impacted revenue development. In contrast, the positive revenue effect arising from the rise in postal rates as of March 1, 2015 should be noted.
Revenue in the Direct Mail business rose 3.3% to EUR 109.1m in the first three months of 2015. The Direct Mail business is generally influenced by the level of customer advertising expenditure and thus also by the economic environment, amongst other factors. The individual customer segments in the Direct Mail business were subject to differing volume trends during the period under review. Whereas the pressure exerted by online business on traditional mail order companies and retail stores led to reduced advertising spending by several customers, in particular unaddressed direct mail items distributed on behalf of local suppliers increased. Moreover, various advertising campaigns promoting special offers shortly before Easter generated additional revenue in the reporting period.
Media Post revenue was down 4.7% in a year-on-year comparison to EUR 33.6m. Business with event-driven media and member newspapers was stable, whereas business with newspapers and magazines declined. At the same time, Branch Services revenue was down 7.8% or EUR 2.4m to EUR 28.4m. A changed product
and price positioning on the part of Austrian Post's contractual telecommunications partner led to a drop of revenue from mobile telephony products. Revenue in the field of financial services for the company's banking partner BAWAG P.S.K. also declined.
| EUR m | Q1 20141 | Q1 2015 | Change | |
|---|---|---|---|---|
| % | EUR m | |||
| Revenue with third parties (external) | 219.5 | 224.4 | 2.2% | 4.9 |
| Premium Parcels | 164.9 | 167.2 | 1.4% | 2.3 |
| Standard Parcels | 45.9 | 48.4 | 5.5% | 2.5 |
| Other Parcel Services | 8.7 | 8.8 | 0.9% | 0.1 |
| Revenue with other segments (intra-Group) | 2.3 | 2.0 | –13.8% | –0.3 |
| Total revenue | 221.8 | 226.4 | 2.1% | 4.6 |
1 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).
Total revenue of the Parcel & Logistics Division rose by 2.2% in the first quarter of 2015 to EUR 224.4m. The Premium Parcels business (parcel delivery within 24 hours) contributes the largest share of this division at 74.5% of revenue. Premium Parcels generate revenue of EUR 167.2m in the first three months of 2015, comprising a rise of 1.4%. In addition to the good development of business parcels in Austria, higher growth was also achieved in higher value parcels for private customers. Generally, a high level of competitive intensity prevails in the business customer segment, which, combined with weak economic growth, results in high price pressure.
Standard Parcels, which mainly involve shipments to private customers in Austria, posted revenue of EUR 48.4m, an increase of 5.5%. The basis for this growth is the ongoing online shopping trend resulting in growing parcel volumes of online retailers to private customers. In particular, parcel volumes rose in March 2015, which is partly due to earlier Easter sales compared to the
previous year. Other Parcel Services, which includes various additional logistics services such as fulfillment, warehousing and cash logistics, generated revenue of EUR 8.8m in the reporting period, a year-on-year rise of EUR 0.1m.
From a regional perspective, 55% of total revenue in the Parcel & Logistics Division was generated in Germany, 36% in Austria and 9% by the subsidiaries in South East and Eastern Europe. Revenue in Germany fell by 2.5% in the first three months of 2015. The challenging competitive situation and price pressure in this market continue. In contrast, revenue in Austria rose by 8.1%, driven by the above-mentioned trend towards online shopping and impetus provided by Easter sales against the backdrop of intensive competition. The subsidiaries in South East and Eastern Europe posted a revenue increase of 11.0% on the basis of significant volume increases.
| EUR m | Q1 2014 | Q1 2015 | Change | |
|---|---|---|---|---|
| % | EUR m | |||
| Revenue | 598.4 | 601.9 | 0.6% | 3.5 |
| Other operating income | 16.5 | 16.4 | –1.1% | –0.2 |
| Raw materials, consumables and services used | –183.8 | –184.5 | 0.4% | 0.7 |
| Staff costs | –280.6 | –281.7 | 0.4% | 1.2 |
| Other operating expenses | –71.4 | –76.3 | 6.9% | 4.9 |
| Results from financial assets accounted for using the equity method | –0.4 | –0.6 | –71.2% | –0.3 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 78.8 | 75.1 | –4.6% | –3.6 |
| Depreciation, amortisation and impairments | –20.6 | –21.2 | 3.2% | 0.7 |
| Earnings before interest and tax (EBIT) | 58.2 | 53.9 | –7.4% | –4.3 |
| Other financial result | –0.8 | 3.4 | >100% | 4.2 |
| Earnings before tax (EBT) | 57.4 | 57.4 | –0.2% | –0.1 |
| Income tax | –13.8 | –13.6 | –1.4% | –0.2 |
| Profit for the period | 43.7 | 43.8 | 0.2% | 0.1 |
| Earnings per share (EUR)1 | 0.64 | 0.65 | 0.4% | 0.0 |
1 Undiluted earnings per share in relation to 67,552,638 shares
Raw materials, consumables and services used rose by 0.4% during the period under review to EUR 184.5m, which is primarily due to higher expenditures for distributors of direct mail items. Costs for external transport services increased due to the higher parcel volumes in Austria and South East and Eastern Europe. However, this was largely offset by the decrease in costs for external transport services in Germany. In 2014, the trans-o-flex Group acquired several distribution companies, through which previously outsourced delivery services are now being handled internally.
Austrian Post's staff costs amounted to EUR 281.7m in the first quarter of 2015, comprising a rise of 0.4% or EUR 1.2m. Staff costs in the comparable period of 2014 included wage-related contributions from previous periods totalling about EUR 6m, the current reporting period includes parameter adjustments for interest-bearing staff-related provisions. The discount rate for various staffrelated provisions was reduced in the light of internationally low interest rates, which in turn resulted in a negative earnings effect to the amount of EUR 4.8m.
Operational staff costs for salaries and wages adjusted to take account of the effect of the integration of the distribution companies in Germany remained at almost the same level as in the previous year. On balance, the integration of these companies led to additional staff costs of EUR 1.5m (including levies and employer contributions), in contrast to the decline in costs for services used. The stable development of salaries and wages shows that the continuing staff structure efficiency and improvement measures succeeded in almost fully compensating for the inflation-related
cost increases. On balance, the average number of employees (full-time equivalents) working for the Austrian Post Group amounted to 23,330 people in the first quarter of 2015, compared to 23,372 employees in the first quarter of 2014.
In addition to the ongoing operational staff costs, there are also various non-operational staff costs such as termination benefits and various changes in provisions, which are primarily related to the specific employment situation of civil servants at Austrian Post. Costs for termination benefits amounted to EUR 4.8m in the reporting period, somewhat below the prior-year figure of EUR 5.6m. Costs for provisions for employee under-utilisation increased in the reporting period, which is mainly due to the above-mentioned discount rate adjustment.
Other operating income at EUR 16.4m in the first quarter of 2015 was at the same level as in the previous year. Other operating expenses climbed 6.9% during the reporting period to EUR 76.3m, which can be attributed to various IT projects, amongst other factors, as well as to a negative effect of EUR 0.4m related to the sale of the Hungarian subsidiary feibra Magyarország Kft.
The results of the financial assets accounted for using the equity method amounted to minus EUR 0.6m in the first three months of 2015, compared to minus EUR 0.4m in the first quarter of 2014. This includes the positive earnings contribution of the Turkish company Aras Kargo a.s. along with the negative earnings contribution of the German company AEP GmbH. The results from financial assets accounted for using the equity method also
encompass a negative effect resulting from the reclassification of the currency translation reserves in connection with the sale of the joint venture company MEILLERGHP of EUR 0.5m. The company was divested effective from February 20, 2015.
Earnings before interest, tax, depreciation and amortisation (EBITDA) of Austrian Post fell by 4.6%, or EUR 3.6m, in the first quarter of 2015 to EUR 75.1m. The corresponding EBITDA margin was 12.5%. One earnings effect in the reporting period was the previously mentioned discount rate adjustment for staff-related provisions.
On balance, depreciation, amortisation and impairment losses totalled EUR 21.2m during the reporting period, slightly down by EUR 0.7m in a year-on-year comparison. Accordingly, earnings before interest and tax (EBIT) in the first three months of 2015
reached a level of EUR 53.9m, a decrease of 7.4% or EUR 4.3m from the previous year. The EBIT margin was 9.0%.
The other financial result improved from minus EUR 0.8m to EUR 3.4m, which is mainly attributable to interest income arising from the early termination of a cross-border leasing transaction in March 2015. The present value benefit of EUR 3.3m reported under deferred income was fully recognised in the income statement. Accordingly, earnings before tax (EBT) in the first three months of 2015 were EUR 57.4m, the same as the first quarter of 2014. The tax charge of EUR 13.6m was slightly below the comparable figure of EUR 13.8m in the previous year. After deducting income tax, the Group's profit for the period (profit after tax) at EUR 43.8m was at the prior-year level (+0.2%). This corresponds to undiluted earnings per share of EUR 0.65 for the first three months of 2015.
| EUR m | Q1 2014 | Q1 2015 | % | Change EUR m |
Margin1 Q1 2015 |
|---|---|---|---|---|---|
| Total EBITDA | 78.8 | 75.1 | –4.6% | –3.6 | 12.5% |
| Mail & Branch Network | 85.4 | 84.5 | –1.1% | –0.9 | 21.2% |
| Parcel & Logistics | 10.7 | 12.3 | 15.6% | 1.7 | 5.4% |
| Corporate/Consolidation | –17.3 | –21.7 | –25.3% | –4.4 | – |
| Total EBIT | 58.2 | 53.9 | –7.4% | -4.3 | 9.0% |
| Mail & Branch Network | 77.9 | 76.6 | –1.7% | –1.3 | 19.3% |
| Parcel & Logistics | 5.5 | 7.2 | 30.9% | 1.7 | 3.2% |
| Corporate/Consolidation | –25.2 | –29.9 | –18.6% | –4.7 | – |
1 Margin of the division in relation to total revenue (incl. revenue with other segments)
From a divisional perspective, the Mail & Branch Network Division generated an EBITDA of EUR 84.5m in the first quarter of 2015, a drop of 1.1%. EBIT of the division at EUR 76.6m was down 1.7% or EUR 1.3m from the previous year. In addition to decline in revenue, this development can also be attributed, amongst other factors, to the minor negative effects arising as a result of the sale of the subsidiary feibra Magyarország Kft. and the joint venture company MEILLERGHP.
EBITDA of the Parcel & Logistics Division amounted to EUR 12.3m in the first three months of 2015, compared to EUR 10.7m in the previous year. EBIT in the reporting period totalled EUR 7.2m, comprising an improvement of EUR 1.7m from the prior-year figure of EUR 5.5m, which, however, included higher negative
effects such as write-downs and structural measures. The earnings situation in Austria and South East and Eastern Europe was positive, whereas structural changes continue to be carried out in Germany.
The Corporate Division (including Consolidation) covers central costs as well as staff-related provisions. EBIT of the Corporate Division fell by EUR 4.7m to minus EUR 29.9m. This decline is mainly due to the previously mentioned interest rate effects for staff-related provisions. On balance, the reduction of the discount rate for various staff-related provisions led to additional for provisions of EUR 4.8m, which negatively impacted earnings mainly in the Corporate Division.
| EUR m | Dec. 31, 2014 | March 31, 2015 | Structure March 31, 2015 |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 597.7 | 591.0 | 34.6% |
| Intangible assets and goodwill | 172.1 | 170.0 | 10.0% |
| Investment property | 51.8 | 53.3 | 3.1% |
| Financial assets accounted for using the equity method | 53.3 | 55.9 | 3.3% |
| Inventories, trade and other receivables | 464.2 | 405.1 | 23.7% |
| Other financial assets | 67.1 | 76.6 | 4.5% |
| thereof securities | 53.1 | 62.7 | 3.7% |
| Cash and cash equivalents | 264.1 | 356.3 | 20.9% |
| Assets held for sale | 0.6 | 0.0 | 0.0% |
| 1,671.0 | 1,708.2 | 100% | |
| Equity and liabilities | |||
| Equity | 702.7 | 745.7 | 43.7% |
| Provisions | 540.5 | 551.8 | 32.3% |
| Other financial liabilities | 17.7 | 16.8 | 1.0% |
| Trade and other payables | 409.5 | 393.9 | 23.1% |
| Liabilities classified as held for sale | 0.6 | 0.0 | 0.0% |
| 1,671.0 | 1,708.2 | 100% |
Austrian Post pursues a conservative balance sheet and financing structure. This is demonstrated by the high equity ratio, low financial liabilities and the solid level of cash and cash equivalents invested with the least possible risk.
The balance sheet total of Austrian Post amounted to EUR 1,708.2m as of March 31, 2015. On the assets side, property, plant and equipment comprise the largest single balance sheet item at EUR 591.0m, whereas intangible assets amounted to EUR 57.5m. The goodwill reported for acquisitions totalled EUR 112.5m at the end of the first quarter of 2015. Receivables of EUR 293.4m comprise one of the largest single balance sheet items in current assets. In addition, Austrian Post boasts a high level of cash and cash equivalents amounting to EUR 356.3m. On the basis of these high liquid resources, the dividend pay-out of Austrian Post totalling EUR 131.7m for the 2014 financial year took place on April 29, 2015.
On the equity and liabilities side, the balance sheet of Austrian Post features a high equity ratio, which equalled 43.7% as at March 31, 2015, with equity of EUR 745.7m. Non-current liabilities totalled EUR 434.4m at the end of the reporting period, and current liabilities were at EUR 528.1m. The non-current and current provisions amounted to EUR 551.8m at the end of March 2015, including EUR 195.0m in provisions for employee underutilisation. Trade payables of EUR 189.5m were reported as of March 31, 2015.
An analysis of the financial position of the company shows a high level of current and non-current financial resources of EUR 419.1m, including cash and cash equivalents of EUR 356.3m as well as financial investments in securities of EUR 62.7m. These financial resources contrast with financial liabilities of only EUR 16.8m.
| EUR m Q1 2014 |
Q1 2015 |
|---|---|
| Gross cash flow1 75.4 |
82.8 |
| Cash flow from operating activities 50.6 |
59.6 |
| Cash flow from investing activities –7.8 |
33.7 |
| thereof CAPEX –11.2 |
–15.8 |
| thereof cash flow from acquisitions/divestments –0.2 |
–1.2 |
| thereof acquisition/disposal of securities 5.0 |
–10.0 |
| thereof other cash flow from investing activities –1.4 |
60.8 |
| Free cash flow 42.8 |
93.3 |
| Free cash flow before acquisitions/securities 38.0 |
104.6 |
| Cash flow from financing activities 1.9 |
–1.1 |
| Change in cash and cash equivalents 44.7 |
92.2 |
1 From now on, non-cash changes in provisions which are considered as non-current as well as restructuring provisions are adjusted in the gross cash flow. The cash flow statement for Q1 2014 was correspondingly adjusted.
The gross cash flow totalled EUR 82.8m in the first quarter of 2015, compared to EUR 75.4m in the previous year. The cash flow from operating activities of EUR 59.6m surpassed the comparative figure in the previous year by EUR 9.0m. This increase was due to the lower income tax payments in a year-on-year comparison as well as lower payments for liabilities related to international invoicing, among other things.
The cash flow from investing activities in the first three months of 2015 was positive at EUR 33.7m. This mainly related to the sale of Austrian Post's former corporate headquarters in Vienna's first district, for which the outstanding balance of the purchase price of EUR 60.0m was paid in the first quarter of 2015. There were hardly any payments made in the reporting period or in the first quarter of 2014 in connection with acquisitions. Cash outflows for the acquisition of property, plant and equipment (CAPEX) amounted to EUR 15.8m in the first quarter of 2015, somewhat higher than the comparable level of EUR 11.2m in the previous year. CAPEX also includes payments of about EUR 3m related to construction of Austrian Post's new corporate headquarters. Moreover, a cash
flow-reducing effect was reported due to financial investments in securities to the amount of EUR 10.0m, whereas securities valued at EUR 5.0m were sold in the prior-year quarter.
In aggregate, the free cash flow during the reporting period was EUR 93.3m, up from EUR 42.8m in the previous year. The free cash flow before acquisitions/securities reached EUR 104.6m. Even taking the special effect related to the sale of the former corporate headquarters into consideration, the free cash flow was still somewhat above the prior-year figure of EUR 38.0m.
In the first three months of 2015, the additions to property, plant and equipment and intangible assets amounted to EUR 13.7m, higher than the comparable prior-year figure of EUR 13.2m. This included investments of EUR 13.5m in property, plant and equipment and EUR 0.2m in intangible assets. In addition to the modernisation of the vehicle fleet, the focus of investments during the reporting period was on new sorting technologies in the mail and parcel distribution facilities. However, investments were also made in construction of the company's new corporate headquarters.
The average number of employees (full-time equivalents) at the Austrian Post Group totalled 23,330 people during the first three
months of 2015, comprising a reduction of 402 employees from the prior-year period. Most of Austrian Post's staff or a total of 17,913 full-time equivalents is employed by the parent company Österreichische Post AG.
| Annual average, full-time equivalents |
Q1 2014 | Q1 2015 | Share % |
|---|---|---|---|
| Mail & Branch Network | 17,186 | 16,727 | 71.7% |
| Parcel & Logistics | 4,531 | 4,732 | 20.3% |
| Corporate | 2,015 | 1,870 | 8.0% |
| Total | 23,732 | 23,330 | 100.0% |
The Annual General Meeting held on April 15, 2015 authorised the Management Board to create new authorised capital. With the formal approval of the Supervisory Board, the company's share capital can be increased by up to EUR 33,766,190.00 over the next five-year period, or until April 14, 2020, by issuing up to 6,755,264 non-par value bearer shares. Furthermore, the Annual General Meeting resolved upon the conditional increase of the company's share capital by up to EUR 16,888,160.00 by issuing up to 3,377,632 non-par value bearer shares to (i) creditors of financial instruments or (ii) for the purpose of granting stock options to employees and senior executives of Austrian Post or an associated company. The entry of the corresponding changes in the Articles of Association in the Commercial Register has not yet been concluded.
Furthermore, the Management Board was authorised over a period of 30 months starting on April 15, 2015 to acquire treasury shares comprising up to 10% of the company's share capital.
As an international postal and logistics services provider, Austrian Post is subject to a variety of operational risks in carrying out its business operations. Austrian Post deals responsibly with these risks. The focus on its core business activities, along with decades of experience in the business, have enabled Austrian Post to identify these risks at an early stage, evaluate them and quickly take appropriate precautionary measures.
The main risks and uncertainties which Austrian Post faces, such as the structure of employment contracts, technical, regulatory and legal risks, financial as well as market and competitive risks and information on the internal controlling system and risk management with regard to the accounting process are described in detail in the Annual Report 2014 of Austrian Post (see the Annual Report; Part 2 "Financial Report", pages 46–53 and 116–120).
On the basis of the defined risks, there are also uncertainties for the remaining nine months of the current financial year. Projected shipment volumes in the Mail & Branch Network Division and in the Parcel & Logistics Division are subject to seasonal fluctuations and depend on the economic development of the respective customer segments. Experience has shown that unfavourable economic conditions faced by customers of Austrian Post have negative effects on the development of letter mail, direct mail and parcel volumes. Furthermore, a subdued economic situation could also have an impact on the Group's competitive position and thus the achievable prices for postal services. Traditional mail items are being replaced by electronic forms of communication, and intensified competition is perceptible on the parcels market. The product portfolios and pricing policies of various retail goods such as telecommunication products and financial services are determined by Austrian Post's system partners. In turn, this influences the revenue development of the respective product groups. All the above-mentioned risks could lead to significant volume decreases and, thus, to a corresponding drop in earnings or valuation adjustments. Risks above and beyond normal business operations primarily relate to structural measures and restructuring expenses as well as impairment losses.
The expected basic trends in the mail and logistics business were also reflected in first quarter 2015 results, allowing Austrian Post to confirm its previously communicated outlook for the entire year 2015. With respect to revenue development, the business model of Austrian Post is oriented to compensate for the decline in the mail segment by generating increases in the parcel business. On this basis, average revenue growth should total 1–2% p.a. The rise in Group revenue in 2015 is expected to be of similar magnitude.
Revenue in the mail segment continues to be impacted by the ongoing volume decline for addressed mail items as a result of 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 are under pressure from the increasing
activities of online businesses, whereas other segments e.g. local suppliers show a positive development. Moreover, the decline in branch network revenue, especially for telecommunications products and financial services, is expected to continue during 2015. Taking account of these factors as well as the positive price effects of the increase in postal rates in March 2015, the Mail & Branch Network Division should report an overall stable or slightly positive revenue development in 2015.
The private and business parcel segments of the Parcel & Logistics Division are impacted by various trends. Annual growth of 3–6% driven by the ongoing expansion of e-commerce is anticipated in the private customer parcel segment, depending on the region. The positive development of the business parcel segment depends on a stable economy and competitive situation. However, the subdued economic situation is unlikely to provide any impetus to parcel growth. For this reason, strong competition is leading to enhanced pressure on prices and market shares.
Structures and processes in both mail and parcel logistics are being consistently optimised in order to further enhance the efficiency of the services provided. Profitability is the top priority, especially in the company's international business operations. One focal point is the continuation of the efficiency enhancement programme of the trans-of-flex Group, entailing a reorganisation of process, distribution and staff structures. Austrian Post remains committed to its target of achieving a sustainable EBITDA margin of around 12%. The company is also pursuing this objective for the 2015 financial year, along with the goal of achieving an ongoing improvement in 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. As a result, total operational capital expenditures (CAPEX) of EUR 80–90m are planned, and will focus on sorting technologies, logistics and customer solutions. Furthermore, Austrian Post recently began construction of its new corporate headquarters in Vienna's third district, with the project expected to be completed in 2017.
Vienna, April 29, 2015
The Management Board
Chairman of the Management Board Member of the Management Board Chief Executive Officer Chief Financial Officer
Mail & Branch Network Division Parcel & Logistics Division
Georg Pölzl Walter Oblin
Walter Hitziger Peter Umundum Member of the Management Board Member of the Management Board
| EUR m Q1 2014 |
Q1 2015 |
|---|---|
| Revenue 598.4 |
601.9 |
| Other operating income 16.5 |
16.4 |
| Total operating income 615.0 |
618.3 |
| Raw materials, consumables and services used –183.8 |
–184.5 |
| Staff costs –280.6 |
–281.7 |
| Depreciation, amortisation and impairment losses –20.6 |
–21.2 |
| Other operating expenses –71.4 |
–76.3 |
| Total operating expenses –556.4 |
–563.7 |
| Profit from operations 58.6 |
54.6 |
| Results from financial assets accounted for using the equity method –0.4 |
–0.6 |
| Financial income 1.3 |
4.6 |
| Financial expenses –2.1 |
–1.2 |
| Other financial result –0.8 |
3.4 |
| Total financial result –1.1 |
2.8 |
| Profit before tax 57.4 |
57.4 |
| Income tax –13.8 |
–13.6 |
| Profit for the period 43.7 |
43.8 |
| Attributable to: | |
| Equity holders of the parent company 43.5 |
43.7 |
| Non-controlling interests 0.2 |
0.1 |
| EUR | Q1 2014 | Q1 2015 |
|---|---|---|
| Basic earnings per share | 0.64 | 0.65 |
| Diluted earnings per share | 0.64 | 0.65 |
| Q1 2014 EUR m |
Q1 2015 |
|---|---|
| Profit for the period 43.7 |
43.8 |
| Items that may be reclassified subsequently to the income statement: | |
| Currency translation differences – investments in foreign businesses –0.3 |
0.7 |
| Currency translation differences – reclassification in profit or loss 0.0 |
0.6 |
| Changes in the fair value of financial assets available for sale 0.8 |
–0.4 |
| Tax effects of changes in the fair value –0.2 |
0.1 |
| Financial assets accounted for using the equity method – share of other comprehensive income –0.1 |
0.3 |
| Financial assets accounted for using the equity method – reclassification in profit or loss 0.0 |
0.5 |
| Total items that may be reclassified 0.1 |
1.8 |
| Items that will not be reclassified subsequently to the income statement: | |
| Revaluation of defined benefit obligations 0.0 |
–3.5 |
| Tax effect of revaluation 0.0 |
0.9 |
| Total items that will not be reclassified 0.0 |
–2.6 |
| Other comprehensive income 0.1 |
–0.8 |
| Total comprehensive income 43.8 |
43.0 |
| Attributable to: | |
| Equity holders of the parent company 43.6 |
42.9 |
| Non-controlling interests 0.2 |
0.1 |
| EUR m Dec. 31, 2014 |
March 31, 2015 |
|---|---|
| Assets | |
| Non-current assets | |
| Goodwill 112.2 |
112.5 |
| Intangible assets 59.9 |
57.5 |
| Property, plant and equipment 597.7 |
591.0 |
| Investment property 51.8 |
53.3 |
| Financial assets accounted for using the equity method 53.3 |
55.9 |
| Other financial assets 60.7 |
60.3 |
| Trade and other receivables 21.0 |
20.2 |
| Deferred tax assets 68.6 |
69.7 |
| 1,025.4 | 1,020.4 |
| Current assets | |
| Other financial assets 6.4 |
16.3 |
| Inventories 16.7 |
16.0 |
| Trade and other receivables 352.0 |
293.4 |
| Current tax assets 5.8 |
5.8 |
| Cash and cash equivalents 264.1 |
356.3 |
| 645.0 | 687.8 |
| Assets held for sale 0.6 |
0.0 |
| 1,671.0 | 1,708.2 |
| Equity and liabilities | |
| Equity | |
| Share capital 337.8 |
337.8 |
| Capital reserves 130.5 |
130.5 |
| Revenue reserves 260.3 |
303.1 |
| Other reserves –26.6 |
–26.4 |
| Equity attributable to the shareholders of the parent company 702.0 |
745.0 |
| Equity attributable to non-controlling interests 0.7 |
0.7 |
| 702.7 | 745.7 |
| Non-current liabilities | |
| Provisions 387.7 |
394.1 |
| Other financial liabilities 14.6 |
14.3 |
| Trade and other payables 20.8 |
17.8 |
| Deferred tax liabilities 8.3 |
8.2 |
| 431.4 | 434.4 |
| Current liabilities | |
| Provisions 152.8 |
157.7 |
| Current tax liabilities 19.3 |
24.4 |
| Other financial liabilities 3.1 |
2.5 |
| Trade and other payables 361.2 |
343.5 |
| 536.3 | 528.1 |
| Liabilities classified as held for sale 0.6 |
0.0 |
| 1,671.0 | 1,708.2 |
| EUR m | Q1 2014 adjusted1 |
Q1 2015 |
|---|---|---|
| Operating activities | ||
| Profit before tax | 57.4 | 57.4 |
| Depreciation, amortisation and impairment losses | 20.6 | 21.2 |
| Results from financial assets accounted for using the equity method | 0.4 | 0.6 |
| Provisions non-cash | 9.0 | 18.9 |
| Taxes paid | –12.2 | –8.9 |
| Other non-cash transactions | 0.2 | –6.4 |
| Gross cash flow | 75.4 | 82.8 |
| Trade and other receivables | 2.4 | –1.5 |
| Inventories | –0.7 | 0.8 |
| Provisions | 2.4 | –5.3 |
| Trade and other payables | –28.8 | –17.2 |
| Cash flow from operating activities | 50.6 | 59.6 |
| Investing activities | ||
| Purchase of intangible assets | –4.9 | –1.0 |
| Purchase of property, plant and equipment/investment property | –11.2 | –15.8 |
| Cash receipts from disposal of assets | 3.4 | 62.0 |
| Acquisition of subsidiaries | –0.2 | –0.1 |
| Acquisition of financial assets accounted for using the equity method | 0.0 | –1.2 |
| Acquisition of financial investments in securities | 0.0 | –10.0 |
| Cash receipts from the disposal of financial investments in securities | 5.0 | 0.0 |
| Loans granted | –1.0 | –0.6 |
| Dividends from financial assets accounted for using the equity method | 0.7 | 0.0 |
| Interest received | 0.4 | 0.4 |
| Cash flow from investing activities | –7.8 | 33.7 |
| Free cash flow | 42.8 | 93.3 |
| Financing activities | ||
| Changes of other financial liabilities | 2.1 | –0.9 |
| Interest paid | –0.3 | –0.2 |
| Cash flow from financing activities | 1.9 | –1.1 |
| Change in cash and cash equivalents | 44.7 | 92.2 |
| Cash and cash equivalents at January 1 | 240.2 | 264.1 |
| Cash and cash equivalents at March 31 | 284.9 | 356.3 |
1 Adjustments: refer to Note 2.2.2 Presentation of the consolidated cash flow statement
| Q1 2014 | Share | Capital | Revenue | Other reserves | Equity | Non | Total equity | ||
|---|---|---|---|---|---|---|---|---|---|
| EUR m adjusted1 |
capital | reserves | reserves | Revalu- ation reserves |
Market valuation reserves |
Currency translation reserves |
attributable to shareholders of the parent company |
con trolling inter ests |
|
| Balance at January 1, 2014 |
337.8 | 130.5 | 245.5 | –5.5 | –1.3 | –9.9 | 697.1 | 2.3 | 699.4 |
| Profit for the period | 0.0 | 0.0 | 43.5 | 0.0 | 0.0 | 0.0 | 43.5 | 0.2 | 43.7 |
| Currency translation differences – investments in foreign businesses |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | –0.3 | –0.3 | 0.0 | –0.3 |
| Changes in the fair value of financial assets available for sale |
0.0 | 0.0 | 0.0 | 0.0 | 0.8 | 0.0 | 0.8 | 0.0 | 0.8 |
| Financial assets accounted for using the equity method – share of other comprehen sive income |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | –0.1 | –0.1 | 0.0 | –0.1 |
| Tax effect | 0.0 | 0.0 | 0.0 | 0.0 | –0.2 | 0.0 | –0.2 | 0.0 | –0.2 |
| Other comprehensive income |
0.0 | 0.0 | 0.0 | 0.0 | 0.6 | –0.5 | 0.1 | 0.0 | 0.1 |
| Total comprehensive income |
0.0 | 0.0 | 43.5 | 0.0 | 0.6 | –0.5 | 43.6 | 0.2 | 43.8 |
| Balance at March 31, 2014 |
337.8 | 130.5 | 289.0 | –5.5 | –0.8 | –10.4 | 740.7 | 2.4 | 743.2 |
1 Adjustments: refer to Note 2.2.1 Changes in the presentation of the consolidated financial statements
| Q1 2015 EUR m |
Share capital |
Capital reserves |
Revenue reserves |
Revalu- ation reserves |
Other reserves Market valuation reserves |
Currency translation reserves |
Equity attributable to shareholders of the parent company |
Non con trolling inter ests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance at January 1, 2015 |
337.8 | 130.5 | 260.3 | –17.3 | –0.5 | –8.8 | 702.0 | 0.7 | 702.7 |
| Disposal of financial assets accounted for using the equity method |
0.0 | 0.0 | –0.9 | 0.9 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Profit for the period | 0.0 | 0.0 | 43.7 | 0.0 | 0.0 | 0.0 | 43.7 | 0.1 | 43.8 |
| Currency translation differences – investments in foreign businesses |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.7 | 0.7 | 0.0 | 0.7 |
| Currency translation differences – reclassification in profit or loss |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.6 | 0.6 | 0.0 | 0.6 |
| Changes in the fair value of financial assets available for sale |
0.0 | 0.0 | 0.0 | 0.0 | –0.4 | 0.0 | –0.4 | 0.0 | –0.4 |
| Revaluation of defined benefit obligations |
0.0 | 0.0 | 0.0 | –3.5 | 0.0 | 0.0 | –3.5 | 0.0 | –3.5 |
| Financial assets accounted for using the equity method – share of other comprehen sive income |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.3 | 0.3 | 0.0 | 0.3 |
| Financial assets accounted for using the equity method – reclassification in profit or loss |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.5 | 0.5 | 0.0 | 0.5 |
| Tax effect | 0.0 | 0.0 | 0.0 | 0.9 | 0.1 | 0.0 | 1.0 | 0.0 | 1.0 |
| Other comprehensive income |
0.0 | 0.0 | 0.0 | –2.6 | –0.3 | 2.2 | –0.8 | 0.0 | –0.8 |
| Total comprehensive income |
0.0 | 0.0 | 43.7 | –2.6 | –0.3 | 2.2 | 42.9 | 0.1 | 43.0 |
| Balance at March 31, 2015 |
337.8 | 130.5 | 303.1 | –19.1 | –0.8 | –6.6 | 745.0 | 0.7 | 745.7 |
The consolidated interim financial statements of Austrian Post as at March 31, 2015 have been prepared in accordance with the International Financial Reporting Standards (IFRS) valid at March 31, 2015, as issued by the International Accounting Standards Board and adopted by the European Union and the additional requirements of Section 245a UGB. The accounting and valuation methods as well as the explanations and notes to the financial statements are fundamentally based on the same accounting and valuation methods underlying the consolidated financial statements for the 2014 financial year.
The consolidated interim financial statements have been prepared on the basis of IAS 34 Interim Financial Reporting and do not contain all information and disclosures included in the annual report. They should be read in conjunction with the consolidated financial statements for the financial year ending December 31, 2014.
The consolidated interim financial statements are presented in Euros. Unless otherwise stated, all amounts are stated in millions of Euros (EUR m). When aggregating rounded amounts and percentages, rounding differences may occur due to the use of automated calculation aids.
In the first quarter of 2015, the following new or revised standards were binding for the first time. These changes have no effect on the present consolidated interim financial statement of Austrian Post:
| Mandatory application of new standards | Effective date in the EU1 | |
|---|---|---|
| IFRIC 21 | Levies | June 17, 2014 |
| Mandatory application of revised standards | Effective date in the EU1 | |
| Diverse | Improvements to International Financial Reporting Standards 2011–2013 | Jan. 1, 2015 |
1 To be applied for the financial year beginning on or after the effective date
IFRIC 21 Levies clarifies when to recognise a liability for levies which do not fall within the scope of another IFRS. The most common case relates to the bank levy.
As a result of the changes in the presentation of the consolidated financial statements as at December 31, 2014, the following adjustments were made in the prior-year figures included in the consolidated interim financial statements as of March 31, 2015:
The reporting of the profit for the period in the item "Revenue reserves" leads to the following adjustments in the revenue reserves:
| Balance at January 1, 2014 | + EUR 146.5m |
|---|---|
| Balance at March 31, 2014 | + EUR 43.5m |
| Balance at March 31, 2015 | + EUR 43.7m |
Changes in the presentation related to non-cash changes in provisions as well as the grouping of items with immaterial amounts led to the following reclassifications in the consolidated cash flow statement:
| EUR m | Q1 2014 | Q1 2015 |
|---|---|---|
| Non-current provisions | –7.5 | –17.3 |
| Provisions non-cash | 9.0 | 18.9 |
| Result from the disposal of property, plant and equipment | 0.6 | 0.6 |
| Interest income/expense | 0.9 | 0.9 |
| Currency translation | 0.1 | –0.2 |
| Other non-cash transactions | –1.5 | –1.3 |
| Gross cash flow | 1.5 | 1.7 |
| Current provisions | –7.1 | 1.9 |
| Provisions | 5.6 | –3.5 |
| Cash flow from operating activities | 0.0 | 0.0 |
Reporting changes related to payments received in advance from purchases of stamps and credit balances from franking machines as well as deferred income for invoiced services which have not yet been rendered have the following effect on the consolidated cash flow statement:
| EUR m | Q1 2014 | Q1 2015 |
|---|---|---|
| Trade and other receivables | 3.5 | 1.2 |
| Provisions | –3.2 | –1.8 |
| Trade and other payables | –0.3 | 0.6 |
| Cash flow from operating activities | 0.0 | 0.0 |
Adjustments in segment reporting lead to the following shifts of revenue:
| Q1 2014 EUR m |
Mail & Branch Network |
Parcel & Logistics |
Corporate | Consolidation | Group |
|---|---|---|---|---|---|
| Revenue with third parties | –0.1 | –0.5 | –0.7 | 1.3 | 0.0 |
| Revenue with other segments | 0.1 | 0.5 | 0.7 | –1.3 | 0.0 |
| Total revenue | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Q1 2015 EUR m |
Mail & Branch Network |
Parcel & Logistics |
Corporate | Consolidation | Group |
|---|---|---|---|---|---|
| Revenue with third parties | –0.1 | –0.6 | 0.0 | 0.7 | 0.0 |
| Revenue with other segments | 0.1 | 0.6 | 0.0 | –0.7 | 0.0 |
| Total revenue | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
In addition to the parent company Österreichische Post AG, a total of 24 domestic subsidiaries (December 31, 2014: 24) and 30 foreign subsidiaries (December 31, 2014: 31), in which Österreichische Post AG directly or indirectly holds a majority of the voting rights, are included in the consolidated interim financial statements. Furthermore, three domestic companies (December 31, 2014: three) and three foreign companies (December 31, 2014: four) are consolidated according to the equity method.
The following changes in the consolidation scope took place in the first quarter of 2015:
| Company | Interest | Date of | Explanation | |
|---|---|---|---|---|
| from | to | transaction | ||
| Mail & Branch Network | ||||
| MEILLERGHP GmbH | 65.0% | 0.0% | Feb. 20, 2015 | Disposal |
| feibra Magyarország Kft. | 100.0% | 0.0% | March 31, 2015 | Disposal |
Austrian Post sold its stake in the joint venture MEILLERGHP effective February 20, 2015. The disposal of the shareholding in MEILLERGHP which had been accounted for using the equity method resulted in a loss of EUR 0.5m, which is recognised in the consolidated cash flow statement under results from financial assets accounted for using the equity method. The loss arose exclusively due to the reclassification of the currency translation reserves attributed to MEILLERGHP from other comprehensive income to profit or loss.
As at December 31, 2014, the assets and liabilities of the company were classified as a disposal group pursuant to IFRS 5 and correspondingly recognised in the consolidated balance sheet. 100% of the stake held by Austrian Post in feibra Magyarország Kft. was sold effective March 31, 2015. The disposal of the disposal group resulted in a loss of EUR 0.4m, which is recognised under other operating expenses.
| Q1 2014 EUR m adjusted1 |
Mail & Branch Network |
Parcel & Logistics |
Corporate | Consolidation | Group |
|---|---|---|---|---|---|
| Revenue with third parties | 378.7 | 219.5 | 0.2 | 0.0 | 598.4 |
| Revenue with other segments | 19.1 | 2.3 | 43.8 | –65.2 | 0.0 |
| Total revenue | 397.8 | 221.8 | 44.0 | –65.2 | 598.4 |
| EBITDA | 85.4 | 10.7 | –17.3 | 0.0 | 78.8 |
| EBIT | 77.9 | 5.5 | –25.3 | 0.1 | 58.2 |
| Other financial result | –0.8 | ||||
| Profit before tax | 57.4 |
| Q1 2015 EUR m |
Mail & Branch Network |
Parcel & Logistics |
Corporate | Consolidation | Group |
|---|---|---|---|---|---|
| Revenue with third parties | 377.5 | 224.4 | 0.0 | 0.0 | 601.9 |
| Revenue with other segments | 20.4 | 2.0 | 44.9 | –67.3 | 0.0 |
| Total revenue | 397.9 | 226.4 | 44.9 | –67.3 | 601.9 |
| EBITDA | 84.5 | 12.3 | –21.7 | –0.1 | 75.1 |
| EBIT | 76.6 | 7.2 | –29.9 | 0.0 | 53.9 |
| Other financial result | 3.4 | ||||
| Profit before tax | 57.4 |
1 Adjustments: refer to Note 2.2.3 Segment reporting
In the 2002 business year, Österreichische Post AG (Austrian Post) completed a cross-border lease transaction with two U.S. trusts. The company granted these trusts a 99 year right of usufruct of the mail sorting facilities in Vienna, Graz, Salzburg and Innsbruck, in return for a grant payment of USD 117m. At the same time, a lease agreement was concluded, in which the right of use to these facilities was leased back to the company for a period of 24 years.
Austrian Post assigned its obligation to pay the lease instalments to two payment undertakers. For this purpose, Austrian Post made payments to the payment undertakers (USD 108.3m) and derecognised the corresponding liabilities. For their part, the payment undertakers were committed to pay the requisite amounts at the agreed upon dates on behalf of Austrian Post. Austrian Post was faced with the residual risk of a claim in the event of the insolvency of the payment undertakers.
Austrian Post prematurely terminated the cross-border leasing transaction effective March 10, 2015. The outstanding payments were made by the payment undertaker, in which case the residual risk was eliminated. At the same time, the right of usufruct was terminated. The full amount of the present value benefit resulting from the cross-border leasing transaction of Austrian Post was maintained. The remaining amount of EUR 3.3m recognised as of March 10, 2015 under deferred income was corresponding recognised in the income statement as financial income.
The decline in trade and other receivables mainly related to the cash inflow of EUR 60.0m from the disposal of the company Postgasse 8 Entwicklungs AG & Co OG in the previous year. The cash inflow is reported under cash receipts from the disposal of assets in the cash flow from investing activities in the consolidated cash flow statement.
Austrian Post adjusted the parameters applying to interest-bearing provisions against the backdrop of internationally low interest rates. The discount rate for provisions for termination benefits and jubilee benefits amounts to 1.75% (December 31, 2014: 2%). The discount rate for provisions for under-utilisation amounts to 0.75%–1.5% (December 31, 2014: 0.75%–1.5%). Different discount interest rates were applied in calculating the provisions for employee under-utilisation in spite of the unchanged range of such provisions in comparison to December 31, 2014.
On balance, the parameter adjustments led to a higher allocation to provisions to the amount of EUR 8.3m, of which EUR 3.5m was reported in other comprehensive income.
The following table shows the carrying amounts of the financial assets according to the valuation categories stipulated in IAS 39 and their classification according to the fair value hierarchy:
| December 31, 2014 EUR m |
Level | Measured at fair value through profit or loss |
Available for sale |
Total |
|---|---|---|---|---|
| Financial assets | ||||
| Measurements carried out at fair value | ||||
| Securities | 1 | 0.0 | 53.1 | 53.1 |
| Strategic stakes and other investments | 3 | 0.0 | 12.2 | 12.2 |
| Derivative financial assets | 3 | 1.7 | 0.0 | 1.7 |
| 1.7 | 65.4 | 67.1 |
| March 31, 2015 EUR m |
Level | Measured at fair value through profit or loss |
Available for sale |
Total |
|---|---|---|---|---|
| Financial assets | ||||
| Measurements carried out at fair value | ||||
| Securities | 1 | 0.0 | 62.7 | 62.7 |
| Strategic stakes and other investments | 3 | 0.0 | 12.2 | 12.2 |
| Derivative financial assets | 3 | 1.7 | 0.0 | 1.7 |
| 1.7 | 75.0 | 76.6 |
No transfers were made between Level 1, Level 2 and Level 3 during the interim reporting period, and there were no changes in the Level 3 measurements of financial assets at fair value.
The following table shows the comparison of the carrying amount and fair value of other financial liabilities:
| March 31, 2015 | |||
|---|---|---|---|
| Carrying amount |
Fair value | Carrying amount |
Fair value |
| 7.6 | 7.7 | 7.4 | 7.5 |
| 9.7 | 9.7 | 9.1 | 9.1 |
| 0.4 | 0.4 | 0.3 | 0.3 |
| 17.7 | 17.8 | 16.8 | 16.9 |
| Dec. 31, 2014 |
Due to the primarily short-term nature of trade and other receivables, cash and cash equivalents as well as trade and other payables, it is assumed that the fair values correspond to the carrying amounts.
The following table shows the valuation method and the input factors used in determining fair values:
| Level | Financial instruments | Valuation method | Input factors |
|---|---|---|---|
| 1 | Securities | Market approach | Nominal values, stock market price |
| 3 | Strategic stakes and other investments |
Market approach or net present value approach |
Book multiples of comparable publicly traded companies and, if available, business plan information |
| 3 | Derivative financial assets | Net present value approach | Planning calculations and the related probability-weighted scenarios, risk-weighted WACC |
Material sensitivities in determining the fair values of Level 3 financial instruments can arise from changes to the underlying market data of comparable companies as well as in the input factors (especially discount rates and planning data) applied in determining the net present value.
The Annual General Meeting held on April 15, 2015 resolved to distribute a dividend of EUR 1.95 per share (EUR 131.7m) for the 2014 financial year. The dividend was distributed on April 29, 2015.
The Annual General Meeting held on April 15, 2015 authorised the Management Board to create new authorised capital. With the formal approval of the Supervisory Board, the company's share capital can be increased by up to EUR 33,766,190.00 over the next five-year period until April 14, 2020, by issuing up to 6,755,264 non-par value bearer shares. Furthermore, the Annual General Meeting resolved upon the conditional increase of the company's share capital by up to EUR 16,888,160.00 by issuing up to 3,377,632 non-par value bearer shares to (i) creditors of financial instruments or (ii) for the purpose of granting stock options to employees and senior executives of Austrian Post or an associated company. The entry of the corresponding changes in the Articles of Association in the Commercial Register has not yet been concluded.
Furthermore, the Management Board was authorised over a period of 30 months starting on April 15, 2015 to acquire treasury shares comprising up to 10% of the company's share capital.
The consolidated interim report of Austrian Post for the first quarter of 2015 was neither subject to a complete audit nor subject to an auditor's review.
Vienna, April 29, 2015
The Management Board
Georg Pölzl Walter Oblin Chairman of the Management Board Member of the Management Board Chief Executive Officer Chief Financial Officer
Member of the Management Board Member of the Management Board Mail & Branch Network Division Parcel & Logistics Division
Walter Hitziger Peter Umundum
| Interim report for the first quarter of 2015, announcement: 07:30–7:40 a.m. CET | |
|---|---|
| Half-year financial report 2015, announcement: 07:30–7:40 a.m. CET | |
| Interim report for first three quarters 2015, announcement: 07:30–7:40 a.m. CET | |
Österreichische Post AG Haidingergasse 1, 1030 Vienna T: +43 (0) 577 67 0, E: [email protected] FN: 180219d, Commercial Court of Vienna Project management, design and lectorate be.public Corporate & Financial Communications, Vienna
Printing Niederösterreichisches Pressehaus, St. Pölten
We have prepared this report and checked the figures with the greatest possible care. Nevertheless, rounding, typographical and printing errors cannot be excluded. The aggregation of rounded amounts and percentages may result in rounding differences due to the use of automated computational aids. This interim report also contains forward-looking statements based on the information currently available to us. These are usually indicated by expressions such as "expect", "anticipate", "estimate", "plan" or "calculate". We wish to note that a wide variety of factors could cause actual circumstances – and hence actual results – to deviate from the forecasts contained in this report.
Statements referring to people are valid for both men and women.
This interim report is also available in German. In case of doubt, the German version takes precedence.
Editorial deadline: April 29, 2015
Investor Relations, Group Auditing & Compliance Harald Hagenauer T: +43 (0) 577 67 30401 F: +43 (0) 577 67 30409 E: [email protected] I: www.post.at/ir
Corporate Communications Manuela Bruck T: +43 (0) 577 67 24099 F: +43 (0) 577 67 28039 E: [email protected] I: www.post.at/pr
Austrian Post on the Web www.post.at www.business.post.at
Interim report for the first quarter of 2015 | Austrian Post
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.