Austrian Post Q1-3: Double-digit revenue growth – despite the economic headwind

Austrian Post has published its Q1-3 results revealing revenue of the Group rose by 13.6%.

Revenue in Q1–3 2024

• Revenue +13.6% to EUR 2,237.6m (+10.7% excl. Parcel Türkiye)
• Positive underlying conditions: effects from elections and exchange rate of the Turkish Lira
• Mail +5.1% to EUR 911.0m
• Parcel & Logistics +19.1% to EUR 1,201.4m (+14.2% excl. Parcel Türkiye)
• Retail & Bank +23.1% to EUR 146.0m

Earnings Q1–3 2024

• EBITDA +7.9% to EUR 304.9m
• EBIT +10.7% to EUR 144.7m
• Earnings per share from EUR 1.30 to EUR 1.48

Cash flow and balance sheet

• Operating free cash flow Q1–3 2024 of EUR 229.3m
• Equity of EUR 710.7m as at 30 September 2024

Outlook

• Revenue forecast of EUR 3bn for the entire year 2024
• 2024 EBIT increase of at least 5%; this is expected to be slightly over EUR 200m
• Forecast for 2025: revenue anticipation of EUR 3bn and the aim to generate again EUR 200m of earnings (EBIT)

The first nine months of 2024 have developed very well for Austrian Post. This is against the backdrop of a challenging economic environment. The weak economy is reflected in both lower investment conditions among companies and subdued consumer behaviour in private households. The increasing use of postal voting in Austria – particularly in major elections such as the European Parliament elections or the Austrian parliamentary elections – but also rising parcel volumes in Austria as well as in Southeast and Eastern Europe due to sustained e-commerce, provided positive impetus in 2024.

“Double-digit revenue growth – despite the economic headwind – shows that we have been able to make good use of the opportunities in our markets,” says Austrian Post’s new CEO Walter Oblin, who took over as Chairman of the Management Board on 1 October 2024. “In addition to quality leadership, we also aspire to be an innovation leader with new services such as the expansion of our self-service infrastructure or the delivery of parcels on Sunday,” Walter Oblin continues.

Revenue of the Austrian Post Group rose by 13.6% to EUR 2,237.6m in the first three quarters of 2024. Excluding revenue in Türkiye, where business was characterized by higher quarterly volatility relating to the exchange rate development of the Turkish Lira, revenue still increased by 10.7%. Higher revenue was reported in all divisions in the first nine months of the year. Mail Division revenue was up 5.1% to EUR 911.0m and is negatively affected by the structural decline of addressed letter mail volumes caused by electronic substitution. In contrast, the postage rate adjustments in the previous year and elections in the first three quarters of 2024 had a positive impact. Furthermore, a restrained advertising business is perceptible, which is related to the weak development of individual retail segments. The Parcel & Logistics Division generated a 19.1% rise in revenue to EUR 1,201.4m in the reporting period. The parcel business developed very positively in all regions. Strong revenue was particularly recorded in Türkiye, impacted by high inflation and the exchange rate of the Turkish Lira. Excluding the parcel business in Türkiye, revenue was up 14.2%. The Retail & Bank Division achieved revenue of EUR 146.0m in the first three quarters of 2024 (+23.1%). The ramp up of customers at bank99 as well as the interest rate developments in recent months positively contributed to divisional revenue.

In terms of earnings, Austrian Post also reported very good results in the first three quarters of 2024. EBITDA climbed 7.9% to EUR 304.9m and earnings before interest and taxes (EBIT) rose by 10.7% to EUR 144.7m. Mail Division EBIT was EUR 115.2m in the first three quarters of EUR, up from EUR 102.1m in the previous year (+12.8%). This improvement is attributable to adjustments to the product and pricing structure as well as elections in the first three quarters of 2024. The Parcel & Logistics Division’s EBIT totalled EUR 64.7m compared to EUR 60.7m in the prior-year period (+6.7%). The parcel business in Türkiye made a major contribution to this earnings growth. Business performance in Türkiye continues to be strongly affected by inflation and currency translation. A valuation effect of EUR 9.6m in the third quarter for the option liability relating to the remaining 20% stake in Aras Kargo negatively impacted earnings. EBIT of the Retail & Bank Division equalled minus EUR 7.4m in the first three quarters of 2024, down from minus EUR 5.6m in the previous year. This decline is mainly attributable to special IT expenses related to the migration of the core banking systems of bank99. The profit for the period of the Austrian Post Group equalled EUR 106.1m (+16.9%) in the first three quarters of 2024. Accordingly, earnings per share equalled EUR 1.48 from EUR 1.30 in the prior year period (+14.0%).

The international mail and parcel markets will show diverging trends going forward. In many European countries, weak economic growth and the related restrained investment climate impact the purchasing power of companies and private consumers. In turn, this leads to a decrease in letter mail and direct mail items, whereas parcel volumes are increasing due to the ongoing growth of online retailing. Business results in the first nine months of the year 2024 were supported by positive overall conditions. In line with current developments and depending on the exchange rate of the Turkish Lira at the end of the year, revenue in 2024 is forecast to rise to EUR 3bn. Revenue growth combined with cost discipline and efficiency are necessary to ensure the targeted stability for Austrian Post. Austrian Post anticipates an earnings improvement in 2024. Assuming a continuing stable macroeconomic environment in the company’s markets, EBIT is expected to rise by at least 5%, thus an expected EBIT of slightly over EUR 200m.