The Investor Story of Austrian Post

Reliability and predictability are the foundation stone of Austrian Post’s investment story. This reliability and predictability are reflected in the form of dividends. Austrian Post has been publicly traded on the Vienna Stock Exchange since May 2006 and has shown an impressive track record. Even in challenging times, the company has always delivered on the promise of its investment story.

Solid Business Model

  • Increase in revenue with leading market position in Austria

  • Sustainable profitability due to an efficient cost structure


Attractive Dividend Policy

  • Further development of dividends based on profitability and generated cash flow

  • Annual dividend distribution of at least 75% of the Group net profit planned


Promised – Delivered

  • Prudent and realistic guidance with clearly-defined objectives

  • Clear commitment to achieve communicated targetsit planned


Decarbonisation of Logistic

  • Group-wide reduction in fossil energy sources

  • Massive reduction in carbon emissions in Austria by 2030

Austrian Post is operating in a market environment that is subject to constant dynamic change. This was already the case before the outbreak of the COVID-19 pandemic and, to some extent, this trend has become even more pronounced as a result of the crisis. This is why we always have to critically question our own business model and adapt it if need be. For years now, digitalisation has been the driving force of change in the postal and logistics market, a trend that is both a challenge and a considerable opportunity and has been accelerated by COVID-19, at least in the short term. The challenge lies in the ongoing trend towards e-substitution and the associated drop in the letter mail business. At the same time, the strong increase in e-commerce is driving growth in the parcel business. Globalisation, consolidation and competition are further trends that are having an impact on Austrian Post’s business model. The issue of sustainability has become fundamentally more important in recent years. This has been a serious issue for some time, and addressing it will be essential for any modern postal company in the future – employees, customers and stakeholders expect sustainable action. In order to take account of these trends and at the same time make greater use of the opportunities and challenges arising in our corporate environment, Austrian Post’s previously implemented strategy was updated in 2020.

The strategy rests on three cornerstones that share a common core, with sustainability, diversity and customer orientation as the overarching guidelines: 

  1. Defending Market Leadership and Profitability in the Core Business
    Austrian Post is the market leader in the domestic letter mail, direct mail and parcel business. Its business strategy is designed to enable the company to maintain this strong position and expand its leadership, particularly with respect to parcel delivery. In addition to ensuring the profitability of its services, Austrian Post keeps its focus on high-quality service.

  2. Profitable Growth in Near Markets
    In addition to its core business, Austrian Post is pursuing a growth strategy that focuses on “near” markets. The term “near” is to be understood both regionally and in terms of the business model. Growth opportunities that are classed as being “near” in geographical terms, for example, include the Southeast and Eastern European regions, with a particular emphasis on the parcel business.

  3. Development of Retail and Digital Offerings for Private Customers and SMEs
    Austrian Post is striving to use its nationwide branch network, along with its strength among private customers and SMEs, to expand and develop new physical and digital business models. Within the branch network, physical services are increasingly being digitalised or supplemented. bank99, Austrian Post’s new bank, is the logical next step in the development of Austrian Post’s traditional range of financial services. shöpping sees itself as “the” Austrian marketplace for Austrian retailers and – also driven by the COVID-19 pandemic – was able to almost treble its retail sales in 2020. 

 

Market environment

  • 2021 will continue to be influenced by the pandemic and government measures
  • Assumption of slow economic recovery in the course of the year
  • Development in the Letter Mail, Direct Mail and Parcel  market with high volatility and reduced visibility


Revenue

  • Revenue growth of 8% to 10% expected in 2020
    • Stability to modest decline in Mail Division possible
    • Strong increase of approx. 20% in the Parcel & Logistics Division, supported by the integration of Aras Kargo
    • Ongoing revenue growth in the Retail & Bank Division

Investments/CAPEX

  • Ongoing implementation of 2018-2022 investment programme in Austria: planned capacity expansion by 30% by 2022
  • CAPEX Austria in 2021: growth CAPEX of more than EUR 60m in addition to maintenance CAPEX of about EUR 70m. Furthermore, property acquisitions of approx. EUR 20m are possible.
  • CAPEX International in 2021: planned investments of about EUR 20m in CEE/SEE and Turkey

Earnings/Dividend

  • Group EBIT increase in 2021 of at least +10% targeted in spite of uncertain conditions (EBIT 2020: EUR 161m)
    • Expected stable or slightly lower development in the Mail Division
    • Approx. 20% earnings rise in the Parcel & Logistics Division
    • Improved earnings in the Retail & Bank Division
    • Uncertainty remains relating to development of pandemic/lockdown measures
  • Continuation of attractive dividend policy: dividend proposal of EUR 1.60 per share for 2020 (payout ratio of 94% of net profit)