Business environment H1 2022
- Difficult market environment due to inflation and energy supply uncertainty
- Marginal decline of parcel volumes behind last year’s lockdown-related strong volumes
- Improved second-quarter trend with respect to volume development, revenue and earnings
H1 2022 volumes impacted by special and catch-up effects
- Austrian letter mail volumes down by 3 % on an operational level but 1 % up if special effects included
- Parcel volumes after strong previous year in Austria –5 %; Turkey –20 %; CEE + %
H1 2022 revenue down by 4 % from the high 2021 level ( Q2: –0.8 % )
- Mail: –1.4 % to EUR 599.5m ( Q2: +1.1 % )
- Parcel & Logistics: –8.9 % to EUR 572.0m or –0.8 % excl. Parcel Turkey
- ( Q2: –5.1 % or +2.0 % excl. Parcel Turkey )
- Retail & Bank: +I.3 % to EUR 54.2m ( Q2: +I.3 % )
H1 2022 earnings below previous year with Q2 improvement
- EBITDA –2.7 % to EUR 179.4m ( Q2: +.9 % )
- EBIT –12.0 % to EUR 91.0m ( Q2: +.7 % )
Outlook 2022 unchanged
- Uncertainties remain (delivery bottlenecks, energy market)
- Revenue targeted as close as possible to prior-year performance (basis 2021 revenue: EUR 2.5bn)
- EBIT still expected in the range between 2021 (EUR 205m) and 2020 (EUR 161m)
The first half of 2022 for Austrian Post was shaped by very challenging conditions. Interruptions in international value chains have put an upward pressure on costs intensified by the war in Ukraine. This backdrop and the extraordinarily high parcel volumes in the prior-year quarters make it for a challenging start into 2022. However, volume development on the Austrian parcel market showed an improved trend, with only a 1 % decline in the second quarter compared with a 9 % in the first one. “Our focus on delivery quality and many customer acquisition initiatives are proving successful. This gives us cause for optimism in the second half of the year,” says CEO Georg Pölzl.
Group revenue in the first half-year 2022 totalled EUR 1,211.8m (–4.0 %), whereas second-quarter revenue showed an improved trend, with revenue down by only 0.8 %. In particular, the parcel business in Turkey was strongly impacted due to inflation and currency effects compared with an extraordinarily successful year in 2021. When excluding Parcel Turkey, however, Group revenue increased by 0.1 % in the first half of 2022. The Mail Division reported a revenue decrease of 1.4 % in the first six months of the year and Parcel & Logistics revenue fell by 8.9 % in total but only by 0.8 % excluding Parcel Turkey. In contrast, the Retail & Bank Division developed positively, generating a 49.3 % revenue increase to EUR 54.2m in the first six months of 2022.
The key earnings figures in the first half of 2022 were also considerably below the prior-year level, although there was an improvement in the second quarter. EBITDA of the first half-year fell by 2.7 % to EUR 179.4m, whereas earnings before interest and tax (EBIT) declined by 12.0 % year-on-year from EUR 103.4m to EUR 91.0m. The Mail Division generated EBIT of EUR 82.9m compared to EUR 82.4m in the prior-year period. The good revenue development supported by special effects from one-off mailings created a positive momentum. The Parcel & Logistics Division reported an EBIT of EUR 45.5m in the first half of 2022, down from EUR 59.7m in the first half of 2021. This decline is mainly attributable to the difficult environment in the Turkish market. The Retail & Bank Division showed an EBIT of minus EUR 20.4m in the first half of 2022, implying an earnings improvement of 24.4 % compared to minus EUR 27.0m in the previous year. The ramp-up of the financial services business due to the acquisition of the retail business of ING at the end of 2021 had a positive impact, while higher integration-related and IT expenses produced a negative impact.
The difficult business environment is expected to continue into the second half of the year. There is also the risk that the energy market will remain unpredictable and that the gas supply in parts of Europe is not secure. Austrian Post aims to address these unfavourable conditions in terms of both revenue and costs. For this reason, price adjustments are just as necessary as efficiency improvements in internal processes. Assuming a continuation of sufficient energy and gas supply in Europe, the company continues its efforts to generate revenue in 2022 as close to the level of 2021 as possible. From today’s perspective, Group earnings (EBIT) in 2022 should be in the range of the results reported in the last two years (2021 EBIT: EUR 205m; 2020 EBIT: EUR 161m). The ambition of the company remains to get as close as possible to the 2021 level. The underlying prerequisite is predictability of gas and energy supply in Austrian Post’s markets.
The planned investment programme to expand the logistics infrastructure and to ensure a sustainable vehicle fleet will be fundamentally maintained. Individual investments are being reviewed to ensure adherence to all profitability targets. “By putting the expanded capacities of the parcel logistics centre in Upper Austria into operation in September 2022, our sorting capacities on this site can be significantly expanded. This means a total capacity of 131,000 parcels per hour sorted in our logistics centres throughout Austria,” states CEO Georg Pölzl. “We want to make our capacities just as fit for 2030 and equally the conversion of our vehicle fleet to CO2-free delivery,” Georg Pölzl concludes.
Source: Austrian Post