Slide 1: Austrian Post Investor Presentation FY 2017
AUSTRIAN POST INVESTOR PRESENTATION FY 2017 Walter Oblin/CFO Vienna, March 15, 2018
Slide 2: Highlights and Overview
1. HIGHLIGHTS AND OVERVIEW 2. Strategy Implementation 3. Group Results 2017 4. Outlook 2018 INVESTOR PRESENTATION | Investor Relations | Vienna, March 15, 2018 2
Slide 3: Highlights 2017
HIGHLIGHTS 2017 Market: Basic trends continue: 5% drop p.a. in addressed letter mail volumes, dynamic double-digit parcel growth, strong competition Revenue: 2017 Group revenue increase by 2.3% (excl. trans-o-flex), drop in letter mail (-2.1%) more than compensated by parcel growth (+17.7%) Earnings
Slide 4: Revenue increase driven by dynamic parcel growth
REVENUE INCREASE DRIVEN BY DYNAMIC PARCEL GROWTH REVENUE DEVELOPMENT EUR m +2.3% 2,030.5 1,938.9 134.8 1,895.6 GROUP: +2.3% (Q4: +2.7%) • Revenue increase due to strong parcel growth 421.1 +17.7% 495.6 • Two working days less year-on-year PARCEL & LOGISTICS: +17.7% (Q4: +17.9%) • Basic trend in Aust
Slide 5: Improved operating earnings (EBIT)
IMPROVED OPERATING EARNINGS (EBIT) EBIT DEVELOPMENT EUR m +2.7% MAIL & BRANCH NETWORK: • EBIT up by EUR 4.6m in 2017 (+ EUR 2.2m in Q4) • Earnings contribution from positive price/mix effect 202.3 207.8 and increased delivery of packets +4.6 +24.3 -23.4 PARCEL & LOGISTICS: Q4 Q4 67.9 • EBIT increase
Slide 6: Strategy Implementation
1. Highlights and Overview 2. STRATEGY IMPLEMENTATION 3. Group Results 2017 4. Outlook 2018 INVESTOR PRESENTATION | Investor Relations | Vienna, March 15, 2018 6
Slide 7: Clear strategic priorities
CLEAR STRATEGIC PRIORITIES DEFENDING MARKET LEADERSHIP IN PROFITABLE GROWTH IN SELECTED 1. THE CORE BUSINESS 2. MARKETS Safeguarding market position in a competitive Focusing and performance enhancement environment ENHANCING EFFICIENCY AND CUSTOMER ORIENTATION AND 3. OPTIMISING THE COST STRUCTURE 4.
Slide 8: Mail volume development in Austria
1 MAIL VOLUME DEVELOPMENT IN AUSTRIA LETTER MAIL (millions of items) DIRECT MAIL/MEDIA POST (millions of items) • Basic trend of electronic substitution continues • Good business climate supports advertising • Positive volume effect from the launch of new, attractive postage pricing models Ø -4% Ø -
Slide 9: International trend: priority and non-priority postage rates in Europe
INTERNATIONAL TREND: PRIORITY AND 1 NON-PRIORITY POSTAGE RATES IN EUROPE Iceland 1.45 4.80 Denmark 1.21 3.63 Spain 0.55 3.51 Italy 0.95 2.80 Norway 1.46 Finland 1.40 Ireland 1.00 France 0.80 0.95 Sweden 0.92 Croatia 0.42 0.87 Standard letter <20g Belgium 0.87 Switzerland 0.73 0.86 Non-Priority Nethe
Slide 10: Austrian parcel market environment
1 AUSTRIAN PARCEL MARKET ENVIRONMENT VOLUME DEVELOPMENT OF THE ENTIRE MARKET SHARES BY VOLUME 2017 AUSTRIAN MARKET (millions of parcels) IN AUSTRIA Ø +6% Total market 32% +15% (209m parcels) Business parcels (93m B2B) 209 182 149 151 157 148 148 93 47% 89 87 88 B2B 92 88 88 Private customer 116 parc
Slide 11: Parcel & Logistics business in Austria
1 PARCEL & LOGISTICS BUSINESS IN AUSTRIA PARCEL VOLUMES OF AUSTRIAN POST LOGISTICS WITH THE BEST AND MOST (millions of parcels) EFFICIENT SERVICE LETTERS Ø +9% PACKETS +20% PARCELS 97 80 81 70 74 65 59 52% of parcels delivered by letter mail logistics 2011 2012 2013 2014 2015 2016 2017 Joint deliver
Slide 12: Branch network business: realignment of financial services
BRANCH NETWORK BUSINESS: 2 REALIGNMENT OF FINANCIAL SERVICES THREE PRODUCT GROUPS WILL CONTINUE TO BE A 1,800 POSTAL SERVICE POINTS FIXED PART OF THE PRODUCT OFFERING • 38m CUSTOMER CONTACTS p.a. • Acceptance of parcels and letters in the branch office POST PRODUCTS • Comprehensive consulting offeri
Slide 13: Growth in selected markets
2 GROWTH IN SELECTED MARKETS GROWTH FOCUS ON PARCEL & LOGISTICS GERMANY CEE/SEE Focus on profitable parcel growth Austrian Post International: • Growth in the international letter mail • Ongoing positive organic volume development business with revenue of EUR 51m (+8.8%) and strong export growth (+1
Slide 14: Capacity and quality drive
3 CAPACITY AND QUALITY DRIVE PLANNED EXPANSION OF PARCEL LOGISTICS IN AUSTRIA TARGET BY 2021: Growth investments of > EUR 50m in 2018 • Doubling of sorting capacity to 100,000 parcels/hour CAPEX (EUR m)1 • Volume development from 97m parcels in 2017 to 150m parcels, even in the case of partial own d
Slide 15: New parcel distribution centres and expansion of existing facilities
3 CAPACITY AND QUALITY DRIVE NEW PARCEL DISTRIBUTION CENTRES AND MODIFICATION OR EXPANSION OF EXISTING FACILITIES Existing facilities Planned (construction begin summer 2018) HAGENBRUNN ALLHAMING INZERSDORF WALS WOLFURT KALSDORF HALL WERNBERG INVESTOR PRESENTATION | Investor Relations | Vienna, Marc
Slide 16: Staff structure in Austria
3 STAFF STRUCTURE IN AUSTRIA FULL TIME EQUIVALENTS IN THE AUSTRIAN CORE BUSINESS (average for period) 21,926 Change 21,003 -229 FTE 2016/2017: 490 20,217 20,064 1,891 19,417 –586 Civil servants 18,790 2,490 18,233 17,692 3,350 17,436 –398 Employees old CWA 3,858 9,397 4,374 +754 Employees new CWA 4,
Slide 17: Further expansion of self-service customer solutions
FURTHER EXPANSION OF SELF-SERVICE 4 CUSTOMER SOLUTIONS 23,662 PICK-UP BOXES 308 PICK-UP STATIONS 376 DROP-OFF BOXES 2017: >1.6m items 2017: >2.2m items 2017: >3.9m items Number of solutions Items/ month Jun.12 Dec.17 Nov.13 Dec.17 Nov.13 Dec.17 MEDIUM-TERM DOUBLING OF NUMBER OF SELF-SERVICE SOLUTION
Slide 18: New offerings for more customer service
4 NEW OFFERINGS FOR MORE CUSTOMER SERVICE SERVICE EVALUATION AND DAMAGE PICK-UP SERVICE REPORT WITH THE POST APP • Pick-up of postpaid parcels by delivery staff • 4-step evaluation system in the Post App; automatic • In person or from any desired location feedback channel after delivery, direct forw
Slide 19: Investments and project development in 2017
INVESTMENTS AND PROJECT DEVELOPMENT IN 2017 NEW CORPORATE HEADQUARTERS, COTTON RESIDENCE, VIENNA VIENNA • Relocation completed at the end of 2017 • Development/expansion of a historic property in Vienna until April 2019 (www.cotton-residence.at) • Implementation “in time & budget“ • More than 60% of
Slide 20: Group Results 2017
1. Highlights and Overview 2. Strategy Implementation 3. GROUP RESULTS 2017 4. Outlook 2018 INVESTOR PRESENTATION | Investor Relations | Vienna, March 15, 2018 20
Slide 21: 2017 financial highlights
2017 FINANCIAL HIGHLIGHTS 2016 2017 Revenue below 2016 due to deconsolidation of Revenue (EUR m) 2,030.5 1,938.9 trans-o-flex Revenue excl. 1,895.6 1,938.9 Revenue up 2.3% on like-for-like basis trans-o-flex (EUR m) EBITDA margin 13.6% 15.2% Improved EBITDA margin of 15.2% EBIT margin 10.0% 10.7% In
Slide 22: Main accounting and earnings effects
MAIN ACCOUNTING AND EARNINGS EFFECTS 2017 Earnings effect CLAIMS RELATED TO Positive net effect from claims related to non-wage + EUR 21.0m NON-WAGE COSTS costs paid in previous periods IMPAIRMENT LOSSES Various impairment losses in CEE/SEE and for real - EUR 14.1m estate STAFF COSTS Higher staff co
Slide 23: Key income statement indicators
KEY INCOME STATEMENT INDICATORS Q4 Q4 EUR m 20161 2017 % ∆ 20161 2017 Revenue +2.3% driven Revenue excl. trans-o-flex 1,895.6 1,938.9 2.3% 43.3 520.1 534.3 by parcel growth Revenue 2,030.5 1,938.9 -4.5% -91.6 520.1 534.3 Positive net effect from Other operating income 70.1 112.7 60.7% 42.6 20.0 69.5
Slide 24: Mail & Branch Network division: revenue development in 2017
MAIL & BRANCH NETWORK DIVISION: REVENUE DEVELOPMENT IN 2017 LETTER MAIL & MAIL SOLUTIONS (EUR m) DIRECT MAIL/MEDIA POST (EUR m) • Drop in letter mail volume of about 5% p.a. • Ongoing positive trend for stationary retail market • Positive effect from new product structure in 2017 and (predominantly
Slide 25: Mail & Branch Network division: income statement
MAIL& BRANCH NETWORK DIVISION: INCOME STATEMENT Q4 Q4 EUR m 20161 2017 % ∆ 20161 2017 Positive election Revenue 1,478.5 1,447.8 -2.1% -30.7 399.7 392.5 effects of EUR 11.6m in 2017 • Letter Mail & Mail-Solutions 801.8 782.8 -2.4% -19.0 216.9 208.7 (2016: EUR 19.3m) • Direct Mail 416.7 413.3 -0.8% -3
Slide 26: Parcel & Logistics division: revenue development in 2017
PARCEL & LOGISTICS DIVISION: REVENUE DEVELOPMENT IN 2017 REVENUE (EUR m) 556.0 +17.7% 495.6 PARCEL & LOGISTICS DIVISION: Germany1 134.8 • Revenue in 2017 up 17.7% following sale of trans-o-flex 421.1 96.9 (+15.3% excl. segment change of M&BM Express) +24.0% CEE/SEE 78.2 CEE/SEE: +24.0% (Q4: +22.8%)
Slide 27: Parcel & Logistics division: income statement
PARCEL & LOGISTICS DIVISION: INCOME STATEMENT Q4 Q4 EUR m 20161 2017 % ∆ 20161 2017 +15.3% revenue Revenue excl. trans-o-flex 421.1 495.6 17.7% 74.4 121.4 143.1 increase excl. Revenue 556.0 495.6 -10.9% -60.4 121.4 143.1 segment change of M&BM Express • Premium 338.1 240.7 -28.8% -97.5 61.0 69.3 • S
Slide 28: Solid balance sheet structure
SOLID BALANCE SHEET STRUCTURE BALANCE SHEET AS AT DECEMBER 31, 2017 EUR m 1,674.2 1,674.2 Other financial liabilities Financial liabilities of 6.8 Cash and cash equivalents/ only EUR 7m Securities1 370.6 Liabilities/ Other 404.9 Liquid financial Financial assets/ 143.4 resources of Investment proper
Slide 29: Robust cash flow in 2017
ROBUST CASH FLOW IN 2017 CASH FLOW DEVELOPMENT EUR m Cash flow from operating activities above the prior-year 273.7 level 248.81 Improved operating free cash flow in 2017 +0.4 171.41 -77.8 146.6 -24.3 -0.61 Gross cash Cash flow from CAPEX Other Operating free CAPEX new Acquisitions/ Free cash flow f
Slide 30: Dividend policy
DIVIDEND POLICY ATTRACTIVE AND PREDICTABLE DIVIDEND POLICY • Dividend proposal to the Annual General Meeting: EUR 2.05/share 1.95 1.95 2.00 2.05 1.90 1.80 • Dividend yield as at Dec. 31, 2017: 1.70 1.60 5.5% (share price of EUR 37.42) 1.50 • Unchanged dividend policy: distribution of at least 75% of
Slide 31: Clear and predictable market positioning
CLEAR AND PREDICTABLE MARKET POSITIONING SOLID AND PROFITABLE STRONG BALANCE SHEET BUSINESS MODEL & SOLID CASH FLOW 183 172 171 498 135 Revenue of 156 154 159 161 157 523 531 557 527 505 500 151 Operating free trans-o-flex cash flow3 1,939 1,834 1,820 1,791 1,839 1,862 1,864 1,904 1,896 EUR m EUR m
Slide 32: Outlook 2018
1. Highlights and Overview 2. Strategy Implementation 3. Group Results 2017 4. OUTLOOK 2018 INVESTOR PRESENTATION | Investor Relations | Vienna, March 15, 2018 32
Slide 33: Outlook 2018
OUTLOOK 2018 • 5% volume decline p.a. of addressed letter mail due to electronic substitution Market • Stable development of direct mail thanks to economic upswing environment • Double-digit growth on the parcel market thanks to online shopping boom, intense competition • Ongoing stable revenue deve
Slide 34: Contact
CONTACT Austrian Post Financial calendar 2018 Investor Relations April 19, 2018 Annual General Meeting Rochusplatz 1, 1030 Vienna April 30/May 3, 2018 Ex-day/Dividend payment day Website: www.post.at/ir May 16, 2018 Interim Report Q1 2018 E-mail: investor@post.at August 10, 2018 Half-Year Financial