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Ladies and Gentlemen! Dear shareholders!

For Austrian Post, the 2008 financial year was full of challenges, which we ultimately managed quite well. At the beginning of 2008, we already had to deal with the loss of two major mail order customers in the Austrian parcels segment, which led to a correspondingly strong reduction of parcel volumes transported on our domestic market.

We reacted with determination, and initiated are dimensioning and repositioning of the Parcel & Logistics Division. These measures included the reduction of headcount as well as the number of logistics centres in Austria. At the same time, we intensified our efforts to expand our share of the B2B market in Austria.

The strong increase in fuel and transport costs in the middle of the year posed a further challenge, and last but not last, the international financial crisis represented a major cyclical burden for many of our customers in all the regions in which we operate.

However, our financial indicators for 2008 show that our efforts were successful in maintaining stability and preserving shareholder value. Group revenue rose by 5.4%, and earnings before interest and tax (EBIT) improved by 4.1%.

The capital market continued to value the business model of Austrian Post highly, as its fairly stable share price demonstrates. The mix of a successful business development, sound balance sheet and attractive dividend policy forms the basis for the impressive development of the Post share in 2008. The Post share was the only share in the Austrian benchmark index ATX which managed to slightly rise in value on a year-on-year comparison despite a markedly turbulent capital market environment.

Integration of new subsidiaries
We once again expanded our geographical outreach in 2008 with new acquisitions in Belgium (parcels), Hungary (unaddressed direct mail items) and Bosnia and Herzegovina (parcels). We are now in the midst of a consolidation phase, in which the top priority is to integrate the newly acquired subsidiaries instead of carrying out further acquisitions. Integration primarily involves logistics processes, which must be
precisely coordinated to ensure the greatest possible level of efficiency, in the interests of our customers but also for our own good.

In the meantime, Austrian Post generates 31% of its revenues outside Austria, and is now represented with subsidiaries in 11 countries.

Solid development in the Letter Mail business area
Despite the continuing trend towards electronic substitution, the Letter Mail business area remained virtually constant, only posting a 0.3% decrease in revenues, which represents an excellent performance in European comparison. The ongoing substitution of letters through electronic communications is offset by positive effects in other segments (e. g. absentee ballots, higher mail volume on the part of Austria’s
social insurance companies).

The increase in the Infomail business area is mainly related to the consolidation of the meiller direct companies acquired in the preceding year, but also includes organic growth of 2.9%. Growth was posted by both addressed and unaddressed direct mail items. The Media Post business area also expanded revenues, which is based on the good development of regional media and the positive effects of regional
and national elections in Austria.

Intensely competitive business environment for the Parcel & Logistics Division
The Austrian parcels market in 2008 was characterised by the market entry of a competitive postal provider, which primarily operates in the B2C (businessto-consumer) segment. Austrian Post responded to the loss of two important mail order customers by promoting its business in the B2B (business-to-business) parcels market. We came closer to achieving our aim of increasing our market share in the B2B segment to 20% by the year 2011. Internet shopping lends added impetus to the parcels market, serving as a growth driver for increasing transport volumes.

Der Vorstand

We also showed a good volume development in the Western European niche market of speciality logistics (health care/pharmaceuticals), which is based on the trend towards integrated logistics solutions. Stable growth rates were achieved in the markets of South Eastern and Eastern Europe, which is related to the upward trend in per capita parcels volumes in these countries in comparison to Western Europe.

Increased fi nancial services
External sales of the Branch Network Division rose slightly in 2008 from the previous year. A decline in sales of retail products, particularly in the field of mobile telephony, was compensated by an increase in financial services and branch network products. Despite the current financial market crisis, we actually achieved a growth in our financial services, characterised by an increased customer preference for
standard investment products.

Systematic preparations for 2011
Stability and preservation of shareholder value continue to be key goals of Austrian Post. Moreover, we aim to increase our competitiveness and ensure the nationwide provision of postal services throughout Austria.

Together with the Supervisory Board, we have defined our goals in a manner enabling us to optimally prepare for the complete liberalisation of the letter mail market as of January 1, 2011. The three cornerstones of our forward-looking strategy are:
1. A growth strategy in Austria and abroad, based on expanding the portfolio of services offered along the value chain of our customers
2. The expansion of alternative operating models in the branch network, particularly ensuring a marketoriented branch network structure based on an expansion of postal partner offices
3. Stronger integration of external service providers in the logistics processes of Austrian Post

The efficient structuring of all corporate processes and the systematic expansion of the company’s customer orientation comprise the main elements of Austrian Post’s efforts to achieve these strategic goals.

Anton Wais resigned from his position on the Management Board of Austrian Post for health reasons, effective March 31, 2009. The Management Board regrets his decision but wishes him all the best for his recovery. As of April 1, 2009, his duties and responsibilities
will be assumed by Rudolf Jettmar, Deputy Chairman of the Management Board, on an interim basis. The top priorities in 2009 will continue to be all measures designed to ensure a profitable future for Austrian Post, and the new Austrian Postal Act. Austrian Post, which is committed to providing nationwide services throughout Austria and to maintaining the high quality of its services, presented its ideas and demands for a reorganisation of the Austrian postal sector to political decision makers. Within the framework of a round-table discussion held in the
Ministry of Finance on November 19, 2008, the new Austrian government pledged to draft a new reform law by mid 2009, creating a new legal framework for the postal sector.

Outlook 2009
The current uncertain international business environment reduces the ability of Austrian Post to develop precise forecasts for upcoming reporting periods. The outlook for 2009 assumes that the overall market environment for Austrian Post and consumer demand will not deteriorate further than expected. On balance, Austrian Post anticipates total revenue in 2009 to be at the same level as in the previous
financial year, and will strive to achieve an EBIT which also matches the results achieved in 2008. A slight decline in revenues and EBIT can not be excluded if the recessionary tendencies intensify. The planned earnings before interest and tax (EBIT) are likely to match the 2008 level. Against the backdrop of the prevailing business environment, the management of Austrian Post will do everything possible on a shortterm
and mid-term basis to increase the fl exibility and effi ciency of the company and thus ensure that its business targets are achieved and shareholder value is preserved.