Slide 1: Austrian Post Investor Presentation FY 2018
AUSTRIAN POST Investor Presentation FY 2018 Walter Oblin, CFO Vienna, March 14, 2019
Slide 2: Highlights and Overview
1. HIGHLIGHTS AND OVERVIEW 2. Strategy Implementation 3. Group Results 2018 4. Outlook 2019 2
Slide 3: Austrian Post at a Glance
AUSTRIAN POST AT A GLANCE Mail & Branch Parcel & Logistics Revenue Mix 2018 Network – Letter mail – Parcels – Direct mail – Express mail items Financial Services Branch Services – Newspapers/magazines – Fulfilment & cash transport Parcel CEE – Branch/financial services – E-commerce services 3% 2% 6%
Slide 4: Challenging Market Environment in 2018
CHALLENGING MARKET ENVIRONMENT IN 2018 Mail market Direct mail market Parcel market – Mail volumes continuously under – Advertising market dependent on – Boom in e-commerce leads to pressure (only moderate decline in the economic situation and steady market growth 2018) respective industry trends –
Slide 5: An Outstanding Year for Austrian Post in 2018
AN OUTSTANDING YEAR FOR AUSTRIAN POST IN 2018 Outlook 2019 – Targeted ongoing stability in revenue and Investment programme operating earnings 2018-2021 – First new parcel Earnings distribution centre – EBIT increase by 1.5% already under to EUR 210.9m as a construction Revenue result of solid reven
Slide 6: Clear Capital Market Positioning
CLEAR CAPITAL MARKET POSITIONING Solid and profitable business model Strong balance sheet and solid cash flow 183 172 135 161 171 162 523 531 557 527 505 500 498 Revenue 156 151 154 159 157 Operating free trans-o-flex cash flow 3 1,834 1,820 1,791 1,839 1,862 1,864 1,904 1,896 1,939 1,958 EUR m EUR
Slide 7: Slight Revenue Improvement Thanks to Robust Mail Business and Parcel Growth
SLIGHT REVENUE IMPROVEMENT THANKS TO ROBUST MAIL BUSINESS AND PARCEL GROWTH Revenue development Group: +1.0% (Q4: +1.5%) EUR m – Slight revenue increase due to moderate mail decline +1.0% and strong parcel growth 1,938.9 1,958.5 Parcel & Logistics: +11.5% (Q4: +11.5%) Parcel & – Basic revenue trend
Slide 8: Improved Operating Earnings (EBIT)
IMPROVED OPERATING EARNINGS (EBIT) Mail & Branch Network: EBIT development – Slight EBIT increase to EUR 0.2m in 2018 EUR m (+ EUR 1.2m in Q4) +1.5% – Already from Q1 2018: Provisions for redimensioning 207.8 210.9 of financial services (- EUR 21.5m) largely compensated by one-off payment (+ EUR 20.
Slide 9: Strategy Implementation
1. Highlights and Overview 2. STRATEGY IMPLEMENTATION 3. Group Results 2018 4. Outlook 2019 9
Slide 10: Clear Strategic Priorities
CLEAR STRATEGIC PRIORITIES 01 Defending market leadership in the 02 Profitable growth in selected markets 03 Enhancing efficiency and flexibilisation of 04 Customer orientation and core business the cost structure innovation Safeguarding market Focusing and performance Expansion of logistics Promoti
Slide 11: Development of Mail Volumes in Austria
01 DEVELOPMENT OF MAIL VOLUMES IN AUSTRIA Letter Mail/Addressed Media Post (millions of items) Direct Mail/Unaddressed Media Post (millions of items) – Basic trend of electronic substitution continues; – Direct mail volumes back to 2016 level after positive positive special effects/mailings in 2018
Slide 12: Letter Mail & Direct Mail in Austria
01 LETTER MAIL & DIRECT MAIL IN AUSTRIA Current Letter Mail trends Current Direct Mail/Media Post trends – New product structure as of July 1, 2018 was well received – 2018 volumes back to 2016 level after – 50:50 volume split between PRIO (next-day delivery) vs. discontinuation of special sales cam
Slide 13: Market Environment on the Austrian Parcel Market
01 MARKET ENVIRONMENT ON THE AUSTRIAN PARCEL MARKET Austrian parcel market Austrian Post parcel volumes (millions of parcels) (millions of parcels) Ø +6% Ø +9% +9% +11% 228 108 209 97 182 80 81 151 157 95 74 148 148 149 93 70 65 89 57 59 50 87 88 92 88 88 133 116 93 56 59 61 64 69 2011 2012 2013 201
Slide 14: Market Environment on the Austrian Parcel Market
01 MARKET ENVIRONMENT ON THE AUSTRIAN PARCEL MARKET Market statistics for Austria in 2018 Market shares by volume 2018 – Total market volume up by 9.0% in Austria Business parcels – Private parcel market +14.6% to 132.7m parcels – Business parcel market +2.1% to 95.0m parcels Other 13% – Upper singl
Slide 15: Austrian Post Will Serve as Delivery Partner of Deutsche Post DHL Group
01 AUSTRIAN POST WILL SERVE AS A DELIVERY PARTNER OF DEUTSCHE POST DHL GROUP IN AUSTRIA – Austrian Post will become a delivery partner of Deutsche Post Takeover of employees and facilities DHL Group in Austria 10 delivery bases (rented) 3 parcel sorting centres (rented) + takeover of sorting technol
Slide 16: Parcel & Logistics Business in Austria
01 PARCEL & LOGISTICS BUSINESS IN AUSTRIA Parcel volume development Success factors in the parcel business – Doubling of volumes over the last nine years – Capacity expansion in 2018-2021 to double sorting Integrated delivery of letters and parcels results in 1 capacity, likelihood of achieving medi
Slide 17: Growth in Selected Markets
02 GROWTH IN SELECTED MARKETS Growth focus on Parcel & Logistics GERMANY CEE/SEE Austrian Post International Focus on profitable parcel growth – Growth in international mail business, – Ongoing positive organic volume development revenue up by 7% in 2018 – Strong competition and price pressure AEP (
Slide 18: Start-ups: AEP & ACL Advanced Commerce Labs
02 START-UPS: AEP & ACL ADVANCED COMMERCE LABS AEP – Pharmaceutical wholesale in Germany since 2013 ACL – E-Commerce Enabler – Complete, efficient and customer-oriented offering – Comprehensive e-commerce software solutions, from from one location for all of Germany consulting to implementation – 25
Slide 19: Nationwide Branch Network
02 NATIONWIDE BRANCH NETWORK: Service offering consists of three product groups 1. Postal Products 2. Telecommunications & retail products 3. Financial services – Termination of the cooperation with BAWAG P.S.K. by the end of 2020 – Redimensioning of banking consulting already initiated, counter tra
Slide 20: Group Real Estate
02 GROUP REAL ESTATE Value appreciation through optimised asset management Value appreciation of investment property pursuant to IAS 40 through active, yield-oriented portfolio management, incl. development – Carrying amount IAS 40 EUR 78m – Market value IAS 40 EUR 263m Linz, “Post City Linz“ 35,000
Slide 21: Capacity and Quality Drive
03 CAPACITY AND QUALITY DRIVE Expansion of parcel logistics in Austria – Maintenance CAPEX 2018 of EUR 81.3m, mainly new investments in the vehicle fleet – Growth CAPEX 2018 of EUR 58.1 primarily for Hagenbrunn, Lower Austria and Vienna-South – 2019: Maintenance CAPEX of about EUR 70m and growth CAP
Slide 22: Staff Structure in Austria
03 STAFF STRUCTURE IN AUSTRIA Full-time equivalents in the Austrian core business (average for the period) 21,926 21,003 490 20,217 20,064 +181 FTE Change 2017/2018 19,417 -741 Civil servants 1,891 18,790 18,233 2,490 17,692 17,463 17,644 -292 Employees old CWA 3,350 3,858 +1,214 Employees new CWA 9
Slide 23: Self-Service Solutions Remain Important
04 SELF-SERVICE SOLUTIONS REMAIN IMPORTANT Steady increase in usage 34,100 pick-up boxes 50,070 boxes at pick-up stations 413 drop-off boxes 2018: >2.4m items 2018: >3.1m items 2018: >5.0m items Jun.12 Dec.18 Nov.13 Dec. 18 Jan.12 Dec. 18 Number of solutions Items/month INVESTOR PRESENTATION Investo
Slide 24: New Offerings for Enhanced Customer Service
04 NEW OFFERINGS FOR ENHANCED CUSTOMER SERVICE New service: “AllesPost“ Customer places an order, 1 specifies his “AllesPost address“ Delivery by any delivery service to the “AllesPost address“ at the 2 Austrian Post logistics centre “AllesPost“ rates Price “Last mile“ delivery by Austrian 3 Post 3
Slide 25: Group Results 2018
1. Highlights and Overview 2. Strategy Implementation 3. GROUP RESULTS 2018 4. Outlook 2019 25
Slide 26: Financial Indicators at a Glance
FINANCIAL INDICATORS AT A GLANCE 2014 2015 2016 2017 2018 Revenue1 (EUR m) 1,863.52 1,903.9 1,895.6 1,938.9 1,958.5 Revenue slightly above previous year (+1.0%) EBIT (EUR m) 196.9 198.03 202.3 207.8 210.9 Improved operating earnings EBITDA margin (%) 14.1 12.6 13.6 15.2 15.6 Slightly higher EBITDA m
Slide 27: Main Accounting Effects in 2018 and 2019
MAIN ACCOUNTING EFFECTS IN 2018 AND 2019 2018 EUR m BAWAG P.S.K. – Termination of the partnership Effects on the income statement in Q1 2018 – Lump-sum payment for shortening the contractual period +20.1 – Allocation to provisions for redimensioning financial services -21.5 Effects on cash flow Spec
Slide 28: Key Income Statement Indicators
KEY INCOME STATEMENT INDICATORS EUR m 2017 2018 % ∆ Q4 2017 Q4 2018 Revenue increase, moderate Revenue 1,938.9 1,958.5 1.0% 19.6 534.3 542.1 decline of mail revenue and strong parcel growth Other operating income 112.7 96.2 -14.7% -16.5 69.5 22.3 2017: positive net effect from Raw materials, consuma
Slide 29: Mail & Branch Network Division: Revenue Development in 2018
MAIL & BRANCH NETWORK DIVISION: REVENUE DEVELOPMENT IN 2018 Letter Mail & Mail Solutions (EUR m) Direct Mail/Media Post (EUR m) – Operating volume decline of about 3.5% – Operating revenue down by about 2-3% – 2018 revenue supported by one-off mailings, new – Revenue comparison impacted by positive
Slide 30: Mail & Branch Network: Income Statement
MAIL & BRANCH NETWORK: INCOME STATEMENT EUR m 2017 2018 % ∆ Q4 2017 Q4 2018 Revenue 1,447.8 1,412.3 -2.5% -35.6 392.5 384.9 Good development due to one- • Letter Mail & Mail-Solutions 782.8 804.8 2.8% 22.0 208.7 219.6 off mailings, e-commerce and new product structure • Direct Mail 413.3 382.6 -7.4%
Slide 31: Parcel & Logistics Division: Revenue Development in 2018
PARCEL & LOGISTICS DIVISION: REVENUE DEVELOPMENT IN 2018 Revenue development Parcel & Logistics Division: +11.5% (Q4: +11.5%) EUR m – Revenue growth of 8.1% excl. Weber Escal and full +11.5% consolidation of ACL 552.4 South East/Eastern Europe: +11.8% (Q4: +11.4%) 495.6 108.4 – Stable operating reve
Slide 32: Parcel & Logistics Division: Income Statement
PARCEL & LOGISTICS DIVISION: INCOME STATEMENT EUR m 2017 2018 % ∆ Q4 2017 Q4 2018 Revenue 495.6 552.4 11.5% 56.9 143.1 159.6 Overall 8.1% organic revenue growth, +10.0% in Austria • Premium 240.7 266.1 10.6% 25.5 69.3 77.8 • Standard 219.0 229.6 4.8% 10.6 63.5 66.2 • Other Parcel Services 35.9 56.6
Slide 33: Solid Balance Sheet Structure
SOLID BALANCE SHEET STRUCTURE Balance sheet as at December 31, 2018 EUR m 1,681.2 1,681.2 Financial liabilities of 10.3 Other financial liabilities only EUR 10m Cash and cash equivalents/ 365.8 Liquid financial Securities1 420.6 Liabilities/Other resources of EUR 366m Structure of provisions Financi
Slide 34: Robust Cash Flow in 2018
ROBUST CASH FLOW IN 2018 Cash flow development EUR m Free cash flow impacted by special effects: – BAWAG special payment of EUR 107.0m includes services of EUR 37.0m rendered in the reporting period and special effects of EUR 70.0m 352.9 – Increased maintenance and growth CAPEX (EUR 139.4m vs. EUR 1
Slide 35: Dividend Policy
DIVIDEND POLICY Continuation of attractive and predictable dividend policy +1.5% 2.00 2.05 2.08 1.90 1.95 1.95 1.80 1.70 1.60 1.50 – Dividend proposal to the Annual General Meeting: EUR 2.08 per share – Dividend yield as at December 31, 2018: 6.9% (share price of EUR 30.02) – Unchanged dividend poli
Slide 36: Outlook 2019
1. Highlights and Overview 2. Strategy Implementation 3. Group Results 2018 4. OUTLOOK 2019 36
Slide 37: Outlook 2019
OUTLOOK 2019 Market environment – Approx. 5% annual decline in addressed letter mail volumes – Direct mail volumes dependent on economic situation and advertising behaviour of large customers – Upper single-digit growth forecast in the parcel business, strong competition and price pressure Investmen
Slide 38: Contact
CONTACT Austrian Post Financial Calendar 2019 Investor Relations April 11, 2019 Annual General Meeting Rochusplatz 1, 1030 Vienna April 23/April 25, 2019 Ex-day/Dividend Payment Day Website: www.post.at/ir May 16, 2019 Interim Report Q1 2019 E-mail: investor@post.at August 9, 2019 Half-Year Financia