Austrian Post: Growth in the parcel business.. more than offset the decline in letter mail

Austria Post has released its financial figures for 2023, revealing an increase in revenue and earnings, driven by strong parcel growth and improvement in Bank99.

Revenue in 2023

• Revenue +8.7 % to EUR 2,740.8m
• Mail –2.3 % to EUR 1,190.4m
• Parcel & Logistics +16.6 % to EUR 1,416.5m
• Retail & Bank +37.6 % to EUR 168.6m

Earnings in 2023

• EBITDA +5.0 % to EUR 391.6m
• EBIT +1.0 % to EUR 190.2m
• Earnings per share +5.5 % to EUR 1.96

Cash flow, balance sheet and dividend

• Operating free cash flow of EUR 221.6m (+21.0 %)
• Equity of EUR 716.7m as at 31 December 2023
• Dividend proposal to the Annual General Meeting on 18 April 2024: EUR 1.78 per share (+1.7 %)

Outlook for 2024

• Revenue growth target in the low to mid-single digit range
• Continuation of the stable earnings development: operating earnings (EBIT) is projected to be at the same level as last year

Austrian Post faced challenging economic conditions in 2023. High inflation and the simultaneous economic decline had negatively impacted the investment behaviour of consumers and companies. On the back of this difficult market environment retail segments were particularly affected. This negative trend also influenced Austrian Post’s mail order and advertising customers. “Against the backdrop of the challenging macroeconomic environment, we are very satisfied with the performance of our company,” explains CEO Georg Pölzl. “Growth in the parcel business as well as the increase in financial services of bank99 have more than offset the decline in letter mail and direct mail items,” Pölzl adds.
 
Group revenue improved by 8.7 % to EUR 2,740.8m in 2023. In this context, the Parcel & Logistics Division showed a revenue increase of 16.6 % to EUR 1,416.5m based on volume growth in all regions of Austrian Post for the full-year 2023, parcel volumes rose by 10 % in Austria, 29 % in Southeast and Eastern Europe and 4 % in Türkiye. The business in Türkiye continues to be impacted by high inflation and a volatile exchange rate development. In 2023, the Mail Division reported a 2.3 % drop in revenue to EUR 1,190.4m, which is due to a further decline in the conventional letter mail business as well as volume decreases in direct mail. The Retail & Bank Division generated strong revenue growth of 37.6 % to EUR 168.6m on the back of an improved interest rate environment for banks. 
 
Despite the challenges from inflation and closely related price pressure for energy, materials and staff costs, Austrian Post achieved an improvement in its main earnings indicators in 2023. EBITDA increased by 5.0 % to EUR 391.6m and earnings before interest and taxes (EBIT) by 1.0 % to EUR 190.2m. The Mail Division generated EBIT of EUR 152.3m in 2023, down by 3.3 % from the previous EUR 157.6m. Declining volumes could only be partially offset by postal rate adjustments. EBIT achieved by the Parcel & Logistics Division equalled EUR 89.5m, up by 0.8 % from EUR 88.8m in the previous year. The Retail & Bank Division reported an EBIT of minus EUR 13.7m in 2023 compared to minus EUR 26.7m in 2022, thus achieving a strong earnings improvement of 48.6 %. In this respect, a significant contribution was made by the positive development of the financial services business of bank99, which can be attributed to the improved interest rate environment in Europe. The profit for the period of the Austrian Post Group rose from EUR 128.1m to EUR 138.7m in the 2023 financial year, resulting in improved earnings per share of EUR 1.96 compared to EUR 1.86 in the previous year (+5.5 %). Due to this solid performance and balance sheet position, an attractive dividend at EUR 1.78 per share will be proposed to the Annual General Meeting on 18 April 2024 (+1.7 %). This corresponds to a payout ratio of 87 % of the Group net profit and a dividend yield of 5.4 % in relation to the closing share price on 31 December 2023.
 
The markets in which Austrian Post operates continue to be negatively impacted by a high level of inflation and weak economic stimulus. These conditions adversely affect both the willingness of companies to invest and the purchasing behaviour of consumers. In order to address these challenges, it is crucial for Austrian Post to achieve a positive revenue development driven by innovative solutions, new products and services as well as price adjustments. In line with current forecasts, Austrian Post expects to generate low to mid-single digit growth in the 2024 financial year. Revenue growth and, at the same time, cost discipline and efficiency measures are required to ensure the targeted stability of Austrian Post. Assuming a positive economic development in Austrian Post’s markets, the company is therefore targeting earnings (EBIT) at the previous year’s level for the 2024 financial year.
 
The extensive investment programme implemented in previous years has been concluded and led to a tripling of sorting capacities in Austria. Over the next few years, the investment priorities will be automation, digitalisation, the expansion of international logistics and e-mobility. For example, one goal is to realise CO2-free delivery in Austria over the last mile by 2030. This is because “we want to continue being a leader in climate-friendly logistics and strengthen our service performance, efficiency and speed through continuous improvements,” states CEO Georg Pölzl. Therefore, Austrian Post plans capital expenditures of about EUR 140–150m in 2024.
 
“Our more than 27,00 employees form the foundation of our successful performance, because they are working with great commitment each and every day for our customers. They deserve our sincere gratitude for their efforts,” Georg Pölzl concludes.