EANS-News: Austrian Post Q1-3 2020 / Parcel Growth offsets decline in Letter Mail and Direct Mail CNE

11/13/2020, 7:30 AM (Source: euro adhoc)
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Quarterly Report

Vienna, 13 November 2020 -

2020 impacted by COVID-19 - but improved trends in the third quarter

* Improvement in the Letter Mail and Direct Mail business compared to Q2;
  however, volatility and uncertainty lead to decline above long-term trend
* Parcel growth driven by strong online business, increases in Eastern Europe
  and through full consolidation of Turkish company Aras Kargo

Revenue increased

* Group revenue Q1-3 2020 up by 2.4 % to EUR 1,497.9m (+7.3 % to EUR 516.0m in
  Q3 2020)
* Good parcel growth (+31.9 %) offsets decline in Letter Mail and Direct Mail (-
  9.0 %)
* Initial revenue contribution of Aras Kargo equalling EUR 23.9m included

Earnings with COVID-19 effect and start-up costs for bank99

* EBIT of the logistics business (excl. Retail & Bank Division) Q1-3 2020 of EUR
  118.7m (-10.0 %)

o Earnings of the Mail Division down by EUR 22.2m (-17.2 %)
  o Parcel & Logistics Division showed earnings rise of EUR 11.3m (+52.9 %)

* Group EBIT Q1-3 2020 down by -37.4 % to EUR 81.4m (+48.5 % to EUR 33.2m in Q3
  2020)

o Loss of EUR 37.3m in the Retail & Bank Division due to start-up costs for
    bank99

Cash flow and balance sheet

* Operating free cash flow of EUR 94.6m below the prior-year level (-38.3 %)
* Increased balance sheet total of EUR 2,427.4m (+18.8 %) due to launch of
  bank99 and full consolidation of Aras Kargo

Outlook 2020

* Revenue rise in FY 2020 of >3 % (incl. subsidiary Aras Kargo) expected
* EBIT of the logistics business (excl. Retail & Bank Division) in FY 2020 of
  about EUR 170m following full consolidation of Aras Kargo; Group EBIT
  negatively affected by launch of bank99
* Earnings in 2021: Targeted EBIT growth in all divisions

The year 2020 presents major challenges to many companies across the globe,
including Austrian Post. In particular, the second quarter of 2020 led to major
economic challenges on the back of government-imposed lockdown measures and
restrictions. The market conditions have noticeably improved in the third
quarter, although the uncertainty and volatility in some segments remained high.
The nationwide supply of mail, parcel and financial services was secured, even
if this was accompanied by additional costs for logistics and crisis measures.
"We succeeded in maintaining the safety and health of our employees as well as
the performance of our company", says CEO Georg Pölzl. "Regarding the current
circumstances, we are satisfied with our third quarter results", Georg Pölzl
continues. In the first nine months of 2020, the Group revenue of Austrian Post
has increased by 2.4 % to EUR 1,497.9m. Growth in the parcel business, supported
by the full consolidation of the Turkish company Aras Kargo, compensated for the
decline in the Mail and Retail & Bank Divisions.

Business development of the Mail Division improved after reaching its lowest
point in the second quarter. On balance, revenue fell by 9.0 % to EUR 883.3m in
the first nine months 2020. Following the lockdown-related loss in Letter Mail
and Direct Mail items mostly in April 2020, the volatility and uncertainty have
increased in the third quarter, with the volume of addressed mail items
remaining below the long-term trend in particular.

The Parcel & Logistics Division reported a revenue increase of 31.9 % to EUR
576.6m in the first nine months of 2020. This is a result of high organic parcel
growth, especially under COVID-19 conditions, which is also supported by higher
volumes due to the cooperation with Deutsche Post DHL Group since August 2019.
The full consolidation of the Turkish company Aras Kargo as at 25 August 2020
has also contributed EUR 23.9m to the good revenue development of the division.

The diverging development in the Mail and Parcel business had a negative effect
on earnings due to the high level of fixed costs in the mail business. Earnings
of the Mail Division fell by EUR 22m in contrast to the EUR 11m increase in the
Parcel & Logistics Division in the first three quarters of 2020. In total, EBIT
of the logistics business (excl. Retail & Bank Division) was down by 10.0 % to
EUR 118.7m in the first three quarters of 2020.

The launch of bank99 is an important milestone and, thus, also a major special
effect financially in the year 2020. The new bank99 has been operating on the
market since April 2020 and is developing a focused offering of financial
services. The bank has already succeeded in attracting more than 54,000
customers until the end of October 2020 and generated initial financial services
revenues. The objective is to expand the financial services business in the
upcoming quarterly periods by adding new products and generate positive earnings
contributions by 2023. The Retail & Bank Division achieved a negative result of
EUR 37.3m due to the start-up costs of bank99 and the impact related to COVID-
19. Accordingly, the reported Group EBIT fell from EUR 130.0m in the first three
quarters of 2019 to EUR 81.4m in the period under review. EBIT of the third-
quarter 2020 improved from EUR 22.3m to EUR 33.2m, whereas negative special
effects were included in the previous year. Earnings per share equalled EUR 1.03
in the first three quarters of 2020 compared to EUR 1.48 in the previous year.

The earnings situation of Austrian Post in the full year 2020 will depend on the
further development of the COVID-19 pandemic. Assuming that current trends
continue over the next few months and wide-ranging business impeding lockdown
can be avoided, Group revenue growth is expected to exceed 3 %. The contribution
of the Turkish company Aras Kargo is partly responsible for this. In the
baseline scenario of avoiding lockdown situations in the retail sector, EBIT of
the logistics business (excl. Retail & Bank Division) in 2020 should be around
EUR 170m, including the expected positive contribution of the Turkish company
Aras Kargo. This is in contrast to other scenarios which could lead to negative
earnings effects as a result of regional or industry-specific lockdowns.

Reported Group earnings (EBIT) for the full year 2020 will include a negative
contribution of the Retail & Bank Division. The key component of this are costs
of the launch of bank99. The earnings position of Austrian Post's new bank
should improve year by year and is expected reach the break-even point in 2023.

Austrian Post will continue to intensively pursue investments and measurements
that lead to an extension of capacities and to sustainable efficiency
enhancement. "We are determined to effectively handle the expected parcel
volumes based on the expansion of our logistics centres and the organisational
preparations for the fourth quarter", Georg Pölzl concludes. Targeted
investments and measures should contribute to an earnings improvement in all
divisions and will therefore increase the Group earnings in 2021.

KEY FIGURES

                                                  Change
EUR m                         Q1-3 2019 Q1-3 2020 %       EUR m Q3 20191 Q3 2020
Revenue                       1,462.2   1,497.9   2.4 %   35.7  481.1    516.0
Mail1                         970.2     883.3     -9.0 %  -86.9 310.0    292.7
Parcel & Logistics1           437.2     576.6     31.9 %  139.4 154.2    208.7
Retail & Bank1                63.4      45.7      -27.8 % -17.6 19.6     17.1
Corporate/Consolidation1      -8.6      -7.8      9.3 %   0.8   -2.7     -2.5
Other operating income        113.9     44.0      -61.3 % -69.8 71.7     15.6
Raw materials, consumables    -333.6    -378.3    -13.4 % -44.7 -114.8   -130.8
and services used
Staff costs                   -744.7    -746.2    -0.2 %  -1.5  -237.4   -251.6
Other operating expenses      -281.6    -238.8    15.2 %  42.8  -146.9   -82.5
Results from financial assets
accounted for using the       -0.3      1.4       >100 %  1.7   0.2      0.9
equity method
EBITDA                        215.9     179.9     -16.7 % -36.0 53.7     67.6
Depreciation, amortisation    -85.9     -98.5     -14.7 % -12.6 -31.4    -34.5
and impairment losses
EBIT                          130.0     81.4      -37.4 % -48.6 22.3     33.2
Mail1                         129.0     106.7     -17.2 % -22.2 25.5     33.5
Parcel & Logistics1           21.4      32.6      52.9 %  11.3  6.5      14.5
Retail & Bank1                -1.8      -37.3     <-100 % -35.5 -3.5     -8.6
Corporate/Consolidation1      -18.4     -20.7     -12.0 % -2.2  -6.1     -6.2
Other financial result        13.6      3.9       -71.3 % -9.7  12.8     -1.2
Profit before tax             143.6     85.3      -40.6 % -58.3 35.1     32.0
Income tax                    -43.6     -20.8     52.2 %  22.7  -14.4    -6.6
Profit for the period         100.1     64.5      -35.6 % -35.6 20.7     25.4
Earnings per share (EUR)2     1.48      1.03      -30.2 % -0.45 0.31     0.37

Cash flow from operating      228.6     518.5     >100 %  289.9 105.0    211.6
activities
Investment in property, plant -100.1    -61.6     38.4 %  38.5  -30.2    -23.9
and equipment (CAPEX)
Free cash flow                49.8      581.0     >100 %  531.1 23.6     165.0
Operating free cash flow3     153.2     94.6      -38.3 % -58.6 72.0     49.2


1 Adjusted to the new segment structure since 1 January 2020
2 Undiluted earnings per share in relation to 67,552,638 shares
3 Free cash flow before acquisitions/securities/money market investments, Growth
CAPEX and core banking assets; Q1-3 2019: EUR 153.2m exclusive cash inflow from
the real estate development project Neutorgasse of EUR 30.3m (Q3 2019: EUR
11.9m)

EXCERPTS FROM THE MANAGEMENT REPORT

REVENUE DEVELOPMENT IN DETAIL

In the first three quarters of 2020, Group revenue of Austrian Post improved by
2.4 % year-on-year to EUR 1,497.9m. The dynamically growing parcel business has
managed to offset the revenue declines in the Mail and Retail & Bank Divisions.

The Mail Division accounted for 58.7 % of the Group revenue. As a result of the
expected declines, the revenue of the division was down by 9.0 %. On the one
hand, this is attributable to the accelerated decrease in Letter Mail volumes
from the substitution of letters by electronic forms of communication as well as
due to the lockdown of many public authorities and companies. On the other hand,
the revenue decline is due to the reduction in Direct Mail items as a direct
consequence of government-imposed store closures in the second quarter in
response to COVID-19.
The Parcel & Logistics Division generated 38.3 % of the total Group revenue in
the reporting period against the backdrop of an ongoing upward trend. The 31.9 %
revenue increase was primarily driven by the organic volume growth from online
orders as well as by higher volumes arising due to cooperation with Deutsche
Post DHL Group since August 2019. Further revenue growth was generated by the
full consolidation of the Turkish company Aras Kargo as at 25 August 2020.
The Retail & Bank Division accounted for 3.0 % of the total Group revenue in the
first nine months of 2020. The revenue decline of 27.8 % in the newly created
Retail & Bank Division can be attributed to the fact that bank99 was launched in
the market on 1 April 2020, whereas the first three quarters of 2019 still
included EUR 25.4m service fees from the former banking partner.

Revenue of the Mail Division totalled EUR 883.3m, of which 64.1 % can be
attributed to the Letter Mail & Mail Solutions business. Direct Mail accounted
for 26.4 % of the total divisional revenue, and Media Post had a 9.5 % share. In
the first three quarters of 2020, Letter Mail & Mail Solutions revenue amounted
to EUR 566.2m, down by 6.3 % from the prior-year period. The declining volume
trend resulting from the substitution of letters by electronic forms of
communication continued. In particular, the revenue declined in the second
quarter of 2020 as a consequence of the lockdown measures and economic
restrictions affecting government offices and companies. The volume decline was
less pronounced in the third quarter of the year but continues to be negatively
affected by the current difficult conditions. Volume development of classical
Letter Mail in Austria in the upcoming quarterly periods is expected to exceed
the historical trend of -5 %. The year under review and the previous year were
both positively impacted by election effects. International Letter Mail was
positively influenced by the German subsidiary AUSTRIAN POST International
Deutschland GmbH. The Mail Solutions business area reported a slight revenue
decline compared to the prior-year period. Direct Mail revenue fell by 14.4 % to
EUR 232.8m in the first three quarters of 2020. The government-imposed store
closures in response to COVID-19 had particularly strong effects on the
advertising business in the second quarter of 2020. Current visibility is
limited. A volatile advertising business can be observed due to the economic
development of revenues. Revenue from Media Post, i.e. the delivery of
newspapers and magazines, fell by 10.3 % year-on-year to EUR 84.3m. This
decrease can also be predominantly attributed to the COVID-19 pandemic.

Revenue of the Parcel & Logistics Division improved by 31.9 % in the first three
quarters of 2020 to EUR 576.6m from EUR 437.2m in the previous year. High growth
in the parcel business is based, among other things, on the positive development
resulting from the ongoing e-commerce trend in Austria. Austrian Post also
succeeded in participating in market growth during this reporting period despite
the own delivery by a major customer in the eastern part of Austria. Intense
competition and high price pressure continue to prevail. Accordingly, parcel
volumes in Austria showed growth of close to 30 % in the first three quarters of
2020. The prevailing uncertainty and restrictions continue to keep e-commerce at
a high level. In addition, the cooperation with Deutsche Post DHL Group launched
in August 2019 has made a significant contribution to the current growth.
Furthermore, revenue of EUR 23.9m generated by the Turkish company Aras Kargo,
recognised as a fully consolidated company in the consolidated financial
statements of Austrian Post since 25 August 2020, is also included. The
development towards faster delivery of parcels can be observed as a clear trend.
In total, 59.5 % of the division's revenue in the first nine months of 2020 was
generated in the Premium Parcels business (delivery on the first working day
after posting). This corresponds to an increase of 43.3 % to EUR 343.1m in the
first three quarters of 2020. The Standard Parcels business area accounted for
31.6 % of the divisional revenue and produced a revenue increase of 18.0 % to
EUR 182.5m in the first three quarters of 2020. Other Parcel Services, which
encompasses various additional logistics services, generated 8.9 % of the
divisional revenue totalling EUR 51.1m in the first nine months of 2020. This
corresponds to an increase of 18.6 %. An analysis by region shows that 78.3 % of
the revenue in the Parcel & Logistics Division was generated in Austria in the
first nine months of 2020. The Austrian parcel business produced revenue growth
of 28.2 % compared to the prior-year period. 21.7 % of divisional revenue can be
attributed to subsidiaries in South East and Eastern Europe and Turkey. The
revenue increase in this highly competitive region driven by higher parcel
volumes as a result of the COVID-19 pandemic equalled 47.3 % in the first three
quarters of 2020.

Revenue of the Retail & Bank Division reached a level of EUR 45.7m in the first
three quarters of 2020, down from EUR 63.4m in the prior-year period. Financial
services in the previous year included service fees from the former banking
partner totalling EUR 25.4m. In the current reporting period, Branch Services
revenue (retail goods and branch products) amounted to EUR 33.3m, positively
impacted in the areas of packaging materials and writing utensils by the COVID-
19 pandemic. Income from financial services in the first three quarters of 2020
amounting to EUR 12.4m also included cash payments for third parties (e.g.
pensions). bank99 was launched on 1 April 2020 and had already over 54,000
customers at the beginning of November.

EARNINGS DEVELOPMENT

The largest expense items in relation to Austrian Post's Group revenue are staff
costs (49.8 %), raw materials, consumables and services used (25.3 %) and other
operating expenses (15.9 %). 6.6 % can be attributed to depreciation,
amortisation and impairment losses.

Staff costs in the first three quarters of 2020 totalled EUR 746.2m,
representing a slight increase of 0.2 % or EUR 1.5m. Despite the full
consolidation of the Turkish company Aras Kargo as at 25 August 2020, operating
staff costs increased only slightly year-on-year. The Austrian Post Group
employed an average of 21,407 people (full-time equivalents) in the first nine
months of 2020 compared to the average of 20,367 employees in the prior-year
period (+5.1 %). In addition to operational staff costs, staff costs of Austrian
Post also include various non-operating staff-related expenses such as severance
payments and changes in provisions, which are primarily related to the specific
employment situation of civil servant employees at Austrian Post. Non-
operational staff costs in the first three quarters of 2020 included lower
expenses compared to the prior-year period.

Raw materials, consumables and services used increased by 13.4 % to EUR 378.3m,
which is primarily due to higher transport expenses as a result of increased
parcel volumes.

Other operating income was down by 61.3 % to EUR 44.0m. The prior-year period
showed a substantial increase in both other operating income and other opera-
ting expenses. Other operating income in the first three quarters of 2019
included claims relating to non-wage labour costs paid in previous periods.
Adjusted by compensation payments reported under other operating expenses in the
previous year, these claims totalled EUR 4.9m. Other operating expenses fell by
15.2 % to EUR 238.8m. The reporting period was burdened by higher costs for
leased staff to handle increased parcel volumes and also included initial costs
to develop the infrastructure of the new bank99.

EBITDA at EUR 179.9m has declined by 16.7 % from the prior-year figure of EUR
215.9m. It was impacted by negative effects relating to the COVID-19 pandemic.
The EBITDA margin was 12.0 %. Depreciation, amortisation and impairment losses
equalled EUR 98.5m, up by EUR 12.6m from the previous year. The increase is
mainly due to the new logistics sites for the parcel logistics infrastructure.
Reported Group EBIT fell to EUR 81.4m in the first three quarters of 2020, down
from EUR 130.0m in the previous year. The EBIT margin amounted to 5.4 %. EBIT of
the logistics business (excl. Retail & Bank Division) reached a level of EUR
118.7m in the first three quarters of 2020, corresponding to an EBIT margin of
8.2 %.

The Group's other financial result of EUR 3.9m was EUR 9.7m below the first
three quarters of 2019. This development is primarily a consequence of the
recognition of interest income in the first three quarters of 2019 from claims
relating to non-wage labour costs paid in previous periods. After deducting the
income tax of EUR 20.8m, the profit for the period equalled EUR 64.5m (-35.6 %).
Undiluted earnings per share amounted to EUR 1.03, compared to EUR 1.48 in the
prior-year period.

The EBIT of EUR 81.4m (-37.4 %) generated in the first three quarters of 2020
was negatively influenced by the COVID-19 pandemic and the launch of the new
bank99. The good parcel business and the full consolidation of the Turkish
company Aras Kargo had a positive effect. Third quarter EBIT was EUR 33.2m. This
is an increase to the EBIT of the previous year of EUR 22.3m, which was
influenced by a data protection provision. EBIT of the logistics business (excl.
Retail & Bank Division) fell by 10.0 % from the prior-year period to EUR 118.7m.

From a divisional perspective, the Mail Division achieved an EBIT of EUR 106.7m
in the first nine months of 2020. The year-on-year decline of 17.2 % can be
attributed to the loss of revenue from Letter and Direct Mail business as a
consequence of the COVID-19 pandemic. The revenue decline has a strong impact on
earnings due to the high level of fixed costs in the Letter Mail business. In
turn, a data protection provision was recognised in the third quarter of the
previous year.

The Parcel & Logistics Division achieved revenue growth against the backdrop of
intense competition and margin pressure, generating an EBIT of EUR 32.6m in the
first three quarters of 2020. This represents an increase of 52.9 % from the
previous year. The full consolidation of the Turkish company Aras Kargo since 25
August 2020made a positive contribution to earnings.

The Retail & Bank Division showed an EBIT of minus EUR 37.3m in the first three
quarters of 2020, compared to minus EUR 1.8m in the prior-year period. The drop
in earnings can be attributed to the 27.8 % revenue decline. The new bank99 was
launched in April of this year, whereas the first three quarters of the previous
year still included service fees from the former banking partner totalling EUR
25.4m. Moreover, earnings were also negatively impacted by COVID-19 by start-up
costs of bank99.

EBIT of the Corporate Division (incl. Consolidation) fell from minus EUR 18.4m
to minus EUR 20.7m. The Corporate Division provides non-operating services which
are essential for the purpose of the administration and financial control of a
corporate group. In addition to conventional corporate governance tasks, these
services include the management and development of commercial properties not
required for company operations, the management of key financial investments,
the rendering of IT services, the development of new business models and the
administration of the Internal Labour Market of Austrian Post.

CASH FLOW AND BALANCE SHEET

The gross cash flow in the first three quarters of 2020 equalled EUR 191.8m,
compared to EUR 215.3m in the first three quarters of 2019. The decline was
related to the lower earnings before tax, amongst other reasons. The cash flow
from operating activities amounted to EUR 518.5m, up from EUR 228.6m in the
prior-year period. In this regard the core banking assets of bank99 at EUR
375.8m comprised the biggest item. The core banking assets include items
resulting from the deposit and investment business of bank99 since the beginning
of April 2020.

The cash flow from investing activities was EUR 62.5m in the first nine months
of 2020, compared to minus EUR 178.8m in the previous year. The change largely
related to securities and money market investments encompassing cash inflows of
EUR 100.2m in the reporting period (in contrast to cash outflows of EUR 59.0m in
the prior-year period). Furthermore, the first three quarters of 2020 included
cash inflows of EUR 38.0m from the disposal of Austrian Post's stake in flatex
AG. The free cash flow before securities, money market investments and core
banking assets equalled EUR 105.0m in the first three quarters of 2020. The
operating free cash flow, after deducting core banking assets, totalled EUR
94.6m in the current reporting period, compared to EUR 153.2m in the first three
quarters of the previous year. The cash flow from financing activities, which
primarily consisted of the dividend payments, amounted to minus EUR 154.5m in
the first nine months of 2020, whereas the prior-year figure was minus EUR
170.9m.

Austrian Post relies on a conservative balance sheet and financing structure.
This is demonstrated in particular by the high level of liquid financial
resources and solid investment of cash and cash equivalents at the lowest
possible risk. Austrian Post's total assets amounted to EUR 2,427.4m as at 30
September 2020. On the asset side, property, plant and equipment at EUR 1,075.1m
constitute the largest balance sheet item, including right-of-use assets from
leasing contracts of EUR 316.7m. Intangible assets totalled EUR 99.3m, whereas
goodwill reported for acquisitions equalled EUR 60.8m at the end of the first
three quarters of 2020. Receivables totalled EUR 315.5m, including current trade
receivables of EUR 304.1m. Other financial assets equalled EUR 145.6m on 30
September 2020. Financial assets from financial services at EUR 450.6m are now
reported separately. They largely relate to the deposit and investment business
of bank99 as well as to the handling of cash payments for third parties (e.g.
pensions). On the liabilities side of the balance sheet, equity of the Austrian
Post Group equalled EUR 608.4m on 30 September 2020 (equity ratio of 25.1 %).
Provisions amounted to EUR 614.5m and trade and other payables liabilities to
EUR 490.8m. Financial liabilities from financial services of EUR 387.5m are now
reported as a separate item in equity and liabilities. They mainly relate to the
deposit and investment business of bank99 as well as to the handling of cash
payments for third parties (e.g. pensions).

OUTLOOK 2020

The business development in the first nine months of 2020 was strongly affected
by the COVID-19 pandemic, the related restrictions and the resulting economic
consequences. Current developments and forecasts show that no quick return to
normality is to be expected in the next quarterly periods. A modest recovery was
perceptible in many customer segments of Austrian Post following the extremely
difficult second quarter. At the same time, this was accompanied by an increased
volatility in the company's business and a reduced ability to make accurate
predictions for the coming months. The various scenarios relating to the
development of the pandemic result in a broader risk range for revenue and
earnings.

Revenue in 2020 above the previous year

The economic development of large mail customers and retailers is of great
importance to Austrian Post. Assuming that current trends continue over the next
few months and wide-ranging business impeding lockdown can be avoided, Group
revenue growth is expected to exceed 3 %. This is partially due to the
contribution of the Turkish company Aras Kargo, fully consolidated since 25
August 2020.

The Parcel & Logistics Division should generate a revenue increase of more than
30 % based on the growth of subsidiaries and strengthened by organic growth as
well as the integration of parcel volumes in Austria due to the cooperation with
Deutsche Post DHL Group.

In contrast, the Mail Division will likely face an upper single-digit revenue
decline in the course of the year. The underlying trend has improved following
the strong drop in Letter Mail and Direct Mail volumes of about 13 % and about
25 %, respectively, in the second quarter of 2020 as a consequence of the
lockdown measures. The original basic assumption of a decline in Letter Mail in
the range of about 5 % p.a. due to the electronic substitution will be exceeded.
An accelerated rate of decline can be anticipated for both conventional Letter
Mail as well as Direct Mail due to the digitalisation initiatives and the worse
economic situation of many customer groups.

The new Retail & Bank Division will generate a lower revenue contribution in
2020 than in the previous year. 2019 still included the service fees of the
former banking partner amounting to EUR 29.3m. It is planned to increase
revenues from the financial services business of bank99 in the years to come on
the basis of a steadily expanding offering of in-house and third-party products.

Group Results 2020

The earnings situation of Austrian Post in 2020 will depend on the further
development of the COVID-19 pandemic. In the baseline scenario of avoiding
lockdown situations in the retail sector, EBIT of the logistics business (excl.
Retail & Bank Division) in 2020 should be around EUR 170m. This includes the
expected positive contribution of the Turkish subsidiary Aras Kargo, in contrast
to other scenarios which could lead to significant negative earnings effects as
a result of regional or industry-specific lockdowns.

Reported Group earnings (EBIT) in 2020 will include the negative earnings
contribution of the Retail & Bank Division. This is mainly attributed to start-
up costs for bank99. The earnings situation of Austrian Post's new bank launched
in April 2020 should improve year by year and reach the break-even point in
2023.

Targeted Investments

In the medium-term, the solid balance sheet of Austrian Post with a high level
of liquid financial resources will strengthen the resilience of the company.
Furthermore, Austrian Post is intensively continuing all investments and
measures designed to expand capacities and sustainably enhance efficiency.
Similar to the past two years, more than EUR 50m in growth investments (growth
CAPEX) are planned in order to be able to continue to guarantee the best-quality
network in Austria. This will complement the typical maintenance investments
(maintenance CAPEX) of about EUR 70m. Moreover, there is the possibility of
expanding or newly acquiring commercial properties for the logistics
infrastructure at a cost of about EUR 20m. Against the backdrop of rising parcel
volumes, it is imperative to further expand Austrian Post's excellent market
position in terms of quality and quantity. Targeted investments and measures
should contribute to improving earnings in all divisions, thus ensuring that
Group earnings increase once again in 2021.

Further inquiry note:
Austrian Post
Ingeborg Gratzer
Head of Press Relations & Internal Communications
Tel.: +43 (0) 57767-32010
presse@post.at

Harald Hagenauer
Head of Investor Relations, Group Auditing & Compliance
Tel.: +43 (0) 57767-30400
investor@post.at

end of announcement                         euro adhoc
--------------------------------------------------------------------------------

issuer:       Österreichische Post AG
              Rochusplatz  1
              A-1030 Wien
phone:        +43 (0)57767-0
FAX:          
mail:         investor@post.at
WWW:          www.post.at
ISIN:         AT0000APOST4
indexes:      ATX
stockmarkets: Wien
language:     English

EAX0002    2020-11-13/07:30

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