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2001

Österreichische Post AG's Financial Year 2000

Pressemeldung from 21.05.2001

Victorious on the way to modernisation

Balanced operational results as targeted outperformed

Österreichische Post AG was successful in its financial year 2000, and shows positive results largely exceeding expectations as concerns operations. Mr. Wais, C.E.O. and President of the Management Board stated in his presentation of annual accounts held at the Vienna Imperial Palace on May 21, 2001: "Our results do not only surpass plans, we also got on with our modernisation strategy which already shows first effects."

"Complete liberalisation of postal markets in the European Union will still take some time, this does, however, not mean that we can simply relax. Post has already many a competitor in different sectors and this tendency will certainly continue. Our aim is not to yield to external pressure and structural changes, but to continuously enhance operational results by high one time expenses," said Mr. Wais.


Results: Targets outperformed
Figures for 2000 do not include postal bus service, as this has been transferred to the new Österreichische Postbus AG, and transferred to ÖIAG on March 1st, 2001. Figures given in the 2000 report can, therefore, not be compared as such with those of the previous year still including postal bus service.

Österreichische Post AG's financial year 2000 shows a consolidated turnover of ATS 21.22 billion (EUR 1.54 billion). Operational figures were as follows: letter post (44%, i.e. ATS 9.89 billion or EUR 718.8 million), info-mail (20%, i.e. ATS 4.45 billion or EUR 323.3 million), postal parcels (8%, i.e. ATS 1.93 billion or EUR 140.2 million), newspapers (8%, i.e. ATS 1.9 billion or EUR 137.88 million), and counter services (7%, i.e. ATS 1.48 billion or EUR 107.38 million).

Reduced revenue from newspaper service as compared to 1999, where it was ATS 2.85 billion or EUR 207.06 million, may be explained by reduced compensation for services rendered in the common interest.

Österreichische Post AG's ordinary business activity resulted in ATS 532 million (EUR 38.6 million). Earnings before interests and taxes (E.B.I.T.): ATS 239 million or EUR 17.4 million.

"Target for the year 2000 originally was to reach balanced operational results. The clearly positive balance of the last financial year proves success of measures taken by Österreichische Post AG," said Rudolf Jettmar, Management Board Member in charge of finances.


1.5 billion Austrian Schillings for modernization
Some ATS 1.5 billion (EUR 109 million) have been spent during the last financial year to improve Österreichische Post AG's competitive capacity. Last year's investments concentrated on creation of logistics centres and modernisation and networking of post offices.

Rate of capital owned by Österreichische Post AG increased by some four percent to 56.6%, but will be somewhat reduced, as owner insists upon a special dividend of ATS 4.6 billion (EUR 334.3 million) for financial year 2000. Special dividend is due in addition to annual dividend amounting to ATS 400 million (EUR 29.1 million).


Speed programme to reduce costs
"Speed programme" introduced in March, 2000, to reduce costs and optimise processes proved very successful during the last financial year. Costs for overtime were reduced by ATS 127 million (EUR 9.2 million).

Measures implemented in 2000 include introduction of a new shift system, ongoing automation optimisation in logistics, and enhancement of services in the counter sector in order to reduce staff costs. Personnel costs amount, for the time being, to 64% of total expenses.

Österreichische Post AG's plans concerning staffing are fulfilled in principle up to now, positive tendency in this sector to be continued in 2001.


Performance oriented remuneration of staff
Mean staffing at Österreichische Post AG was 33 644 in 2000, i.e. 31 775 full time staff (35 493 full time staff in 1999). Some 60% are civil servants. Staff reductions are due partly to transformation of the former "postal bus service" into the new Österreichische Postbus AG and its separation from the group.

A performance oriented remuneration system has been developed, and scheme for staff participation in company gains introduced.


Branch network, marketing, and sales:

New orientation of branch network
New post offices strategy introduced in 1999 has been extended country-wide in 2000. Post offices have been re-organised into service, nodal, and basic post offices, nodal offices controlling the basic offices.

A new operation types scheme developed to enhance turnover and business opportunities of branches experienced in a pilot study will now be introduced in 2001.


"Postamt Neu" ("New Post Office") equipped with most up to date IT systems
ATS 2 billion (EUR 145 million) have been invested to modernise and renovate post offices in the framework of "Postamt Neu" project introduced in 1998. Number of completely renovated post offices increased to 380 during the year under review. 423 post offices have, furthermore, been renewed inside, and over 400 have seen their façade refurbished.

In 2000 most up to date IT equipment has been installed in 974 networked post offices. Some 1 430 post offices are now connected to Österreichische Post AG's data network, and are, thereby, fit for introduction of universal counters. Counter automation systems also ensure connection of post offices to central business management systems. Once electronic cash- and stock keeping instruments will have been introduced, Österreichische Post AG will have one of the largest counter information systems in the world.


Booming mobile telephony and internet products, new financial services
Telecommunication products may be ordered and sold at post counters thanks to extended sales agreements concluded with Telekom Austria AG, and boomed in the year under review with more than 80 000 internet access products sold, representing 27% of total sales. In the mobile communication sector, turnover aimed at has been met in the prepaid phone cards sector and has even been considerably exceed as concerns A1.

Co-operation with the Postal Savings Bank (P.S.K.) continued with its new owner, the BAWAG Bank. Remuneration for marketing and sales of P.S.K. financial products amounted to ATS 1.2 billion (EUR 87.2 million).


New subsidiary in charge of updating addresses
Creation of Postadress Austria GmbH, a subsidiary of Österreichische Post AG, increased the company's address management capacity. Österreichische Post AG is the only Austrian company having a daily updated address list of all Austrian households. The subsidiary co-operates with Schober Suppan Direktmarketing GmbH to update addresses and connected data.


Österreichische Post AG maintains its position as market leader in the parcel sector
Österreichische Post AG kept its leading position in the parcel sector, a very looked for market segment. The company has nearly 100% shares in business to consumer and consumer to consumer markets, as to business to business transactions, co-operation with DPD also ensures market leadership. Generally speaking, Österreichische Post AG has a share higher than 40% of total parcel market.


E-commerce servicing
In order to benefit from added value due to e-commerce, modules have been developed to complete forwarding and delivery, Österreichische Post AG's core business. These additional modules form a custom-made service portfolio made available to e-commerce companies. In 2000 a pilot logistic system for wine shipping was developed and tested in co-operation with a wholesale company. For this project Österreichische Post AG assumes collection, dispatching and timely delivery of products ordered via internet. Products ordered with P.S.K.'s Otto Wagner Shop are also packed, dispatched, and forwarded all over the world in warehouses for which Österreichische Post AG assumes responsibility.


Logistics and distribution:

The new logistics concept on its way to implementation
Some ATS 3.5 billion (EUR 254.35 million) are invested in logistics by Österreichische Post AG over a period of five years. The new scheme should bring about savings of some ATS 1.2 billion (EUR 87.21 million), but also serves to enhance quality of service.

Parcel sorting centre Salzburg/Wals was inaugurated in 2000, and the cornerstone was laid for the new logistics centre east of Vienna. Four out of six planned logistics centres are now under construction or will be so shortly. By 2004 all logistics centres will be ready, fully automated and updated.

Open organisation by introduction of a new work shift system
Mid-2000 a works agreement on shifts was finally concluded. Twelve hours shifts are now reduced to eight hours in order to ensure flexible organisation of work, without harming staff interests. Overtime and personnel costs have also been reduced. The financial year 2000 saw introduction of time accounts and of a system of weighing working time over a certain period in different work time schemes. Some hierarchic levels have, furthermore, been abolished. The new structure will be definitively implemented once logistics centres are put into service.

New organisation of delivery leading to reduce the number of delivery post offices to less than 500 delivery bases and to optimise route planning will be tested as pilot in 2001. In case results are positive, the scheme will be implemented all over Austria.


Outlook

Successful first quarter, continued expansion strategy, internationalisation
Österreichische Post AG is pleased with first results of financial year 2001. Turnover of the first quarter 2000 war ATS 5.35 billion (EUR 388.07 million), the first quarter 2001 brought revenues of ordinary business activities amounting to ATS 204 million (EUR 14.83 million), and an EBIT of ATS 125 million (EUR 9.08 million).

Modernisation activity will continue in order to further enhance quality and increase productivity, to keep or even extend position on the Austrian market, and to ensure balanced and smooth development.


Acquisitions in South-Eastern and Eastern Europe
In accordance with its gateway strategy, Österreichische Post AG's supervisory board agreed to acquisition of participations in Slovakia.

"Competition is not driven by deregulation, but by competitors. We, therefore, need a company structure adapted to the market," stressed Mr. Wais, and closed by saying: "Austria needs a strong postal company in order to enhance quality of competition in the interest of our customers."


Contact for further information:

Österreichische Post AG
Company Communication
Press service
Mr. Michael Homola
Tel.: +43 (1) 515 51 - 5217
E-Mail: michael.homola@post.at
Vienna,