Risk Management System

Austrian Post operates a comprehensive riskmanagement system integrating all business units and subsidiaries. This risk management system complies with the COSO standard “Enterprise Risk Management – Integrated Framework” in the version dated June 2017. The objective of risk management is to identify risks at an early stage and to analyse and evaluate them before going on to take appropriate measures designed to ensure that the company meets its business targets. Risks are identified, evaluated, monitored and documented in their overall context by a Group-wide risk management system in accordance with uniform principles. The Management Board defines the risk strategy and policy of the companyand sets out a framework for the risk management system.

Austrian Post’s risk policy focuses on safeguarding and sustainably increasing enterprise value and is incorporated into the corporate and sustainability strategy. Austrian Post is exposed to numerous risks. As a result, Austrian Post is prepared to take risks provided that the resulting portfolio of opportunities and risks is well-balanced and that they remain commensurate with the company’s legal circumstances and fundamental ethical values. The goals of safe-guarding and achieving a sustainable increase in enterprise value must not be jeopardised. For those risks that cannot be avoided, controlling measures are taken to safeguard the company’s assets and achieve a sustainable increase in shareholder value.
 
The most important steps in the risk management process are presented below:

 

Risk Management Process

Austrian Post’s risks and opportunities result from the overall risk environment and from trends that the company is exposed and changes it faces.

  1. Environmental, Social and Governance (ESG) Risks
  2. Mail Market
  3. Turkey / Aras Kargo
  4. Parcel Market
  5. Staff Costs and Structure of Employment Contracts
  6. Logistics and Infrastructure Costs
  7. bank99
  8. Financial Risks
  9. Technical and Cyber Risks
  10. Regulatory and Legal Risks

Further details about Significant Risks faced by Austrian Post can be found in the current Annual Report.

The risk management system aims to identify, analyse and evaluate opportunities as well as risks early on, and to exploit the corresponding opportunities by taking appropriate measures. The identification, evaluation, management and reporting of opportunities takes place in line with the previously mentioned process. Significant opportunities for Austrian Post are presented below. They are allocated to specific strategic areas based on the new integrated corporate and sustainability strategy, which was updated in 2020. The strategy consists of three cornerstones: “Defending Market Leadership and Profitability in the Core Business”, “Profitable Growth in Near Markets” and “Development of Retail and Digital Offerings for Private Customers and SMEs”. Sustainability is at the core of the new integrated corporate and sustainability strategy, flanked by the three cornerstones referred to above.

In the first strategic pillar – Defending Market Leadership and Profitability in the Core Business – the expansion and adaptation of Austrian Post’s product portfolio in the Mail and Parcel Divisions in accordance with customer requirements is considered to be an opportunity. Various value-added physical and electronic services are continuously expanding the range of services offered by Austrian Post. Ongoing e-substitution has already been taken into account within Austrian Post’s planning, in which case the more moderate decline in mail volumes in Austria compared to original expectations is seen as an opportunity. Opportunities predominantly arise as a result of the growth of e-commerce. In this respect, Austrian Post stands out due to its new, quick and lean solutions for online orders. Austrian Post has clear competitive advantages with respect to its quality and cost structure. Furthermore, measures to optimise staff and logistics costs could provide positive impetus.

In the second strategic pillar – Profitable Growth in Near Markets – opportunities arise primarily from Austrian Post’s equity investment portfolio. The foreign investees operate primarily in the parcel sector and are also reaping the benefits of increasing e-commerce. The subsidiary Aras Kargo offers particularly substantial potential due to the size and development potential of the Turkish market.

In the third strategic pillar – Development of Retail and Digital Offerings for Private Customers and SMEs – potential lies, by way of example, in the development of online and self-service offerings as well as in new business models in the area of e-commerce; in particular, Austrian Post has an opportunity to participate in the dynamic online retail trend through its subsidiary Post E-Commerce. In addition, bank99 also opens up opportunities, particularly thanks to the takeover of ING’s retail banking business in Austria. The emerging trend towards rising interest rates could contribute to the bank’s positive development over the next few years.

For information on ESG-related opportunities, please also refer to the Non-financial Report.

The company continuously monitors the above described risks and opportunities. In response, appropriate measures are carried out and initiatives launched. Overall, the pandemic is expected to result in increased uncertainty in both a positive and a negative sense. A look at the company’s main opportunities and risks shows that, while the issues that Austrian Post is facing are changing and shifting, the company’s opportunities and risks are stable overall. As a result, there is no threat to the company’s existence from today’s perspective.