Austrian Post builds up European parcels network
Austrian Post is poised to make four more acquisitions as it builds up its parcels subsidiary trans-o-flex and the Eurodis international network, adds services and expands logistics infrastructure.
The listed company is currently conducting due diligence on four relatively small parcels and mail companies, three of them in Eastern Europe and one in Western Europe, chairman Anton Wais said at a media briefing in Frankfurt earlier this week.
Austrian Post, which already bought ten companies in 2007, has a budget of EUR 150 million for acquisitions over the next 18 months. During this period, it also expects to purchase the remaining 25pct in German subsidiary trans-o-flex out of this budget for a previously agreed price, Wais added. But it is not interested in acquisitions in Poland or Turkey due to strong competition between major players in those countries, he noted.
The group already has subsidiaries in Slovakia, Czech Republic, Hungary, Croatia, Serbia, Germany, Netherlands and Belgium. The subsidiaries’ established brands will be maintained in the short term, and Austrian Post will start to review group-wide branding in mid-2009, Wais added in response to questions.
Austrian Post currently generates 27pct of group turnover outside Austria. The parcels and logistics division generates 73pct of its EUR 739 million revenues outside Austria, with the bulk coming from Germany. The division’s EBIT margin, which dropped to 1.7pct last year as B2C customers in Austria switched to new entrant Hermes, is targeted to improve to 2-3pct this year and to 5pct in 2009/2010.
Carl-Gerold Mende, who will take up the position as board member responsible for parcels and logistics in June, told journalists his top priorities would be to improve the division’s profitability, build up the new Austrian B2B parcel service, and continue the European expansion.
Klaus Heinz, trans-o-flex managing director, said the German-based company, which generates about 55pct of its EUR 500 million revenues from healthcare/pharmaceuticals distribution, aimed to grow to about EUR 1 billion turnover as a niche specialist in the combi-freight (parcels and pallets) market, and continued to see good potential in the healthcare sector.
The European parcels network will be built around Eurodis, the trans-o-flex partner network covering 21 countries. This currently offers common products and has an integrated IT system, but a linehaul network will not be created, Wais said.
Eurodis GmbH, the network management company, is being opened up to the European partners to take financial stakes in order to strengthen its basis and reinforce mutual ties. Spanish partner Redur Lozano has acquired a 20pct stake in the company, leaving trans-o-flex and Austrian Post each with 40pct of the stock. Both are prepared to halve their holdings to take other partners on board.
While other international networks are usually managed and controlled from a single national perspective, Eurodis can become the first truly international alliance thanks to the equitable shareholding structure, according to Heinz. "Our target is to offer Spanish solutions in Spain, English ones in England and French solutions in France," he commented.
Eurodis GmbH, headed by managing director Marc Hackländer, will also take on more managerial and operational responsibilities. In future it will manage the alliance and handle financial clearing between partners. It will also coordinate European tenders, maintain its own customer relationships, oversee the creation of international products and marketing, set and monitor uniform quality standards and be responsible for the European network's IT infrastructure, including track-and-trace.
"Increasing international integration and interdependence will cause much faster growth in international flows of goods in the EU than in domestic flows," declared Heinz. "The new Eurodis means we can make best possible use of the new opportunities which are resulting."
At a product level, the newly-founded trans-o-flex Austria subsidiary will launch a domestic next-day delivery service under the “Prime Paket” name in September, targeting the Austrian B2B market where Austrian Post aims to grow its market share from 5pct to 20pct by 2011. Trans-o-flex will also introduce its temperature-controlled and healthcare distribution service in Austria and parts of Eastern Europe.
Austrian Post is also expanding its operations in Central and Eastern Europe (CEE). It is investing in a 70,000 sqm distribution centre at Zilina, Slovakia, in connection with a contract with Kia Motors to distribute spare parts from the latter’s factory there throughout the CEE region. Zilina will also be used as a gateway to Poland and the Czech Republic, while Kosice, further east, will be a gateway to Ukraine. “Slovakia is playing a key role in our expansion,” commented Wais. In addition, a new logistics centre will be built in Zagreb in 2009.
In the mail market, Austrian Post aims to expand its direct marketing company Meiller Direkt and information logistics firm Scanpoint with more added-value services such as data management, archiving and in-house post, Wais said. But Austrian Post had turned down the opportunity to buy Germany’s troubled privately-owned mail operator PIN Group, he noted. Wais commented that he expects Deutsche Post to enter the Austrian domestic postal market upon full liberalisation in 2011.
