Austrian Post to push for more convenience to counter mail volume decline
Austrian Post has said it needs to direct future investments towards ensuring more customer convenience in its services, as it continues to face challenging mail volume declines. The national postal operator in Austria said it has already been keeping its annual mail volume decline down through various measures.
But, it said that while letter volumes have been dropping as a result of the switch to digital communications, a new trend is emerging where retail customers are reducing their spending on advertising as a result of the rise of e-commerce.
Austrian Post has just issued its latest quarterly financial performance data showing that growth it is achieving in parcels, largely thanks to e-commerce, is being cancelled out by the losses incurred by the letter business.
The company’s revenue has been almost the same this year — both in the third quarter and in the year-to-date — as last year.
Commenting on its future outlook, the company said it was now important for Austria Post to work on its dwindling addressed mail volumes by introducing more customer-oriented solutions.
Austria Post is planning a price increase for 1 March, 2015, and the company is also implementing an efficiency drive to reduce its operational costs, including the use of more automation technology. In the full 2014 year is it expecting to invest about EUR 90m.
Mail and post office revenue account for 62.6% of Austrian Post’s revenue, to the 37.4% generated by parcel and logistics. The mail division has been seeing its revenues dropping 2% year-on-year in the first nine months of 2014.
But while the parcel division is achieving “solid” results, 3.3% revenue growth year-on-year “almost” offsetting the decline in mail revenue, the company said it is seeing competition intensifying in the parcel market.
Austrian Post CEO Georg Pölzl said: “The main focus of our strategic activities is our consistent focus on customer needs in order to consolidate market leadership in our core business and simultaneously exploit opportunities in growth markets. Moreover, we are striving to maintain our strong focus on innovation and efficiency in all processes.
“This is the only way we can remain faithful to our basic philosophy; emphasising reliability, continuity and predictability, also when it comes to our earnings development, and generate sustainable value for the benefit of all stakeholders,” added Pölzl.
Results
Austrian Post has generated EUR 1.73bn in revenue in the first nine months of 2014, the same as in the first nine months of 2015.
Pre-tax earnings (EBIT) were 0.8% up on the same period last year, to EUR 132m.
The Mail and Branch division saw revenues down 2% year-on-year in the first nine months, to EUR 1.09bn as a result of ongoing e-substitution and decreasing direct mail volumes.
Mail volume was also impacted by the absence of elections in Austria this year, effectively reducing revenue by EUR 5m in the first nine months of 2014 compared to the same period last year.
The Parcels and Logistics division saw revenue up 3.3% year-on-year in the first nine months, to EUR 647.9m.
The division is generating 56% of its total revenue in Germany, where the company owns the trans-o-flex courier firm, with 35% generated in Austria and 9% in the South East and Eastern Europe region. Revenue grew 0.8% year-on-year in Germany, 6% in Austria and 9% in South East and Eastern Europe.
