Earnings call transcript: Austrian Post misses EPS forecast, stock falls

Austrian Post’s latest earnings call for Q2 2025 revealed mixed financial results, with the company missing earnings per share (EPS) expectations but surpassing revenue forecasts. The EPS came in at 0.43, below the forecast of 0.4743, resulting in a 9.34% negative surprise. Despite the revenue beat, with actual revenue of 725 million euros surpassing the forecast of 669.88 million euros, the stock saw a pre-market decline of 6.01%, closing at 28.95 euros from a previous 30.8 euros. According to InvestingPro data, the company maintains a GOOD financial health score of 2.82, with a market capitalization of $6.02 billion.

Key Takeaways

• EPS missed expectations by 9.34%, impacting investor sentiment.
• Revenue exceeded forecasts by 8.23%, showing strong sales performance.
• The stock dropped 6.01% in pre-market trading following the earnings release.
• Challenging market conditions persist in Austria and Eastern Europe.

Company Performance

Austrian Post reported a 1.1% decrease in group revenues compared to the previous year, though there was a 15.8% increase when compared to 2023. The company’s earnings before interest and taxes (EBIT) fell by 11% year-on-year. Mail revenues took a hit, declining by 5.9%, while the Parcel and Logistics division in Austria saw a growth of 5.2%. The Retail and Bank division contributed positively with an EBIT of 5 million euros.

Financial Highlights

• Revenue: 725 million euros, up 8.23% from forecast
• EPS: 0.43, down 9.34% from forecast
• Net debt to EBITDA ratio: 0.5x (1.5x with IFRS 16)
• Operating free cash flow increased by 9% year-over-year

Earnings vs. Forecast

Austrian Post’s EPS of 0.43 was below the expected 0.4743, marking a 9.34% miss. This contrasts with the revenue performance, which exceeded expectations by 8.23%, indicating strong sales despite the earnings miss.

Market Reaction

The stock price of Austrian Post fell by 6.01% in pre-market trading, reflecting investor disappointment over the EPS miss. The stock’s performance is currently near its 52-week low of 28 euros, showing a significant decline from its high of 33.3 euros.

Outlook & Guidance

The company maintains a cautiously optimistic outlook, targeting stable revenues for 2025 and anticipating an EBIT of around 200 million euros. Capital expenditures are projected to be between 150 and 160 million euros, with a continued decline in mail volume expected at around 7%.

Executive Commentary

CEO Walter Blinnen stated, "Our ambition is to become a leading logistics and services group," emphasizing the company’s strategic direction. He also noted the positive performance of Bank99, which showed a positive result for the first half of the year.

Risks and Challenges

• Economic recession in Austria impacting consumer demand
• High inflation in Eastern Europe and Turkey
• Digitization leading to reduced mail volumes
• Competitive pressures from global e-commerce platforms

Q&A

During the earnings call, analysts inquired about the volatility of Chinese e-commerce volumes and the company’s strategy to manage salary increases. The potential impact of European regulations on Chinese platforms was also discussed, highlighting concerns about market dynamics.

Full transcript - Oesterreichische Post AG (POST) Q2 2025:

Conference Moderator: Good afternoon, ladies and gentlemen, and welcome to the Usterreichesche Post First Half twenty twenty five Results. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host Harald Hagenauer, Head of Investor Relations. Please go ahead.

Harald Hagenauer, Head of Investor Relations, Austrian Post: Good afternoon, ladies and gentlemen, to this conference call of Austrian Post, where we would like to discuss the trends and results of the first half of the last years last month, pardon. And here with me is our CEO, Walter Blinnen, our CFO, Barbara Bortis Geibensteiner. And I would directly like to hand over to Walter. Please go on, sir.

Walter Blinnen, CEO, Austrian Post: Good afternoon, ladies and gentlemen. It’s a pleasure to, welcome you to our, to our half year results. As a summary upfront, the environment continues to remain challenging. However, I think we’ve shown resilience and, can present solid results today. Moving to page two, a few sentences on the environment.

As a summary, the environment remains challenging, both in Austria where, we are in the third year of of a recession, as well as in Eastern Europe and in Turkey where we continue to see high inflation. In Austria, there is cost pressure on the public sector. The government tries to consolidate the budget. The stationary retail is in a continued crisis mode. All of these is putting pressure on mail volumes.

And on the parcel side, the international trade conflicts, create uncertainty and subdued customer demand, which overall leads to subdued growth in parcel volumes. Against this context, I think we, as I said, have shown resilience and can show to you quite solid results for the first half year. We’ve shown here, the two year development as I think, the development from ’23 to ’24, puts the ’25 figures in the right context. Compared to last year, we report a revenue decline of 1.1%. This, however, after a growth of 17.2%, where in absolute terms, roughly 100,000,000 came from Turkey, where it was mostly an effect of high inflation combined with a stable currency, an effect which has not been present this year.

This year, Turkey has been almost flat despite some some volume growth in in euro terms. And for the rest of the portfolio, the decline in mail volumes was larger than the growth in parcels leading to a decline of 1.8% for all volumes or all revenues outside Turkey. Again, this after an unusually high growth last year of 10.3%, where also one off volumes resulting from two, countrywide elections in Austria, provided a special boost. On the profitability, both EBITDA as well as EBIT below last year, 5.7% EBITDA, 11% EBIT, but pretty much on the level of a good year 2023. And a lot of the decline in EBIT can be explained by the absence of elections and positive one offs in mail, as well as as well as by the development in the Turkish currency.

However, also the outlook remains challenging, in terms of the overall environment. So we have, implemented additional, initiatives both on the revenue side as well as on the cost side, different growth initiatives. We try to stronger penetrate, large, international ecommerce platforms by offering them the, Austrian Post portfolio of companies as one region, out of one sales interface, with ideally, one product and one IT interface. We continue to invest in out of home offering, through a strong initiative on the local side both in Eastern Europe as well as in Austria. We have, indirectly acquired, a small competitor who exited the market in Slovakia, and we continued our international expansion out of Turkey into Azerbaijan, and made first cautious steps into Georgia and, Uzbekistan.

On the cost side, we have taken several measures to adjust, the staffing, both in operations as well as on the retail network side on somewhat lower volumes. We have doubled down on, moving mail volumes to a slower economy product, which in the meantime is the standard product in the Austrian market, both for national as well as international volumes. We tried to leverage synergies across the group, have integrated various affiliates into the parent company, and we have initiated group wide cost optimization in administrative areas, which already have started to show effect in q two. Page five summarizes the strategy update we communicated in May. Our ambition is to become a leading logistics and services group, reaching more than 150,000,000 people in Austria, Eastern Europe, Turkey, and beyond with three core business pillars.

Number one, we want to be a strong post in Austria, but more than that, post and beyond in Austria, we called it. In particular, this means that beyond defending our market leadership in Austria on the postal side, We want to grow Bank ninety nine, and also offer a post owned telecommunication offering as of next year. Pillar number two, growth in international ecommerce. This is our obvious growth opportunity. We cover here a region with 150,000,000 people, with growth momentum, and we continue to invest in this region.

Pillar number three, one group operationally excellent. We think there is more to gain from a stronger, integration across the group, on the sales side, on the operation side, on, core functions, and technology and efficiency, has become part of our DNA, and we to con continue, to invest in leading edge technology to drive efficiency. Let me now use this framework to give you an update, on business development, and strategy implementation along those four three core business pillars, starting with our Austrian mail business. Letter mail continues to decline in Austria. We’re now in the seventeenth year of mail decline.

Mail decline versus last year, roughly 7%. Last year, a strong election year, with in the first six months, two countrywide elections. This year, pretty much apart from Vienna municipal election in in the first quarter, no more elections coming. So we see the pure, volume reduction, on the direct mail side, similar trend. Here, the consolidation on the non food stationary retailers, is ongoing.

At the same time, food retailers, continue to work with postal, advertising, mail, direct mail, both unaddressed as well as addressed as their main, promotion, as their main promotion form. We continue to, be in the lower third of European, tariffs. Here in a European comparison, our strategy is to offer high quality services at affordable rates, both for private customers, but even more importantly for business customers. We have successfully implemented a product reform, as of May 1, where, we made the economy product to the standard product. So the standard product in Austria across all customer segments now is has a run time of, three days.

Premium, continues to be offered, as a, as an additional service, and as a result, around 85% of the mail volume in Austria, is already in the standard product, and this product we can bundle every other day, in the last mile delivery. Moving to our bank on page eight, I’m, very happy to, be able to tell you that, bank ninety nine, showed a positive result for the first six months, for the first time in its history in its fifth, full year now, since the launch of the bank in April 0, 2020. As I always say, out of the home office into a full lockdown, The bank has a balance sheet of around 4,000,000,000, roughly 300,000 customers. We think that the business model to use the ecosystem of Austrian Post was a trusted brand, a dense retail network consisting of postal branches and postal partners, and, all that combined with strong and impactful digital channels that this business models is working. We continue to attract easily customer deposits, and also loan production is going quite well in a challenging Austrian credit market.

So very positive first six months for banks ninety nine. Very important milestone was also the the successful migration of core banking system of the former ING retail business to the outsourced core banking system of Bank ninety nine. We are also proud that Bank ninety nine is increasingly showing up on on the top spots in different customer service. Here, you see some awards that Bank ninety nine has received over the last month for us is signed that, after five year after five years, Bank ninety nine, has a strong awareness, among Austrian consumers, and not only awareness, but also a positive, innovative, service focused reputation, and this makes us optimistic for the near future. In our Austrian marketplace, back to the postal core business, we continue to implement a comprehensive self-service initiative.

Last year, 32,400,000, shipments were handled through self-service facilities by Austrian consumers. This number has grown 12% in the first six months, and we continue to roll out self-service facilities. By the end of the year, we expect around 3,000 postal network points. Here, we’re coming from 1,900, two years ago, and the addition is, pretty much only self-service. These facilities are adopted very well by consumers in larger cities such as Vienna.

We are also rolling out full self-service branches. You see some pictures here, which again are very well accepted by the Austrian market. Moving to page 11, we, last quarter, communicated that as of next year, we will lift the cooperation with a one on a new level. We will launch a mobile virtual network operator under a, post owned brand, as of q two next year. The preparations for this offering are well underway, and we are very optimistic about this new service offering.

Page 12, moving to our parcel market, starting with Austria. Austria has seen growth continued in 2025 after a very strong growth, last year, in particular in the first half year, 3% volume growth, 5% revenue growth despite this despite, subdued consumer demand. In Eastern Europe, we had a rather challenging first quarter. Although also to put this, in context, last year, we grew 27% mostly through the influx of quite quite volatile Chinese volumes. Against the strong growth, we are down 70%, compared to last year, which means that we’re still up roughly 20%, compared to 2023.

And q two showed a quite positive, approach towards last year’s volumes. In q two, we were, almost reaching, last year’s volumes And similar trend in Turkey where q two was better than, q one. In q two, four percent volume growth. We continue our expansion towards Azerbaijan, which is running quite well and made first steps, into Georgia and Uzbekistan. The business model is always, similar.

We are following Turkish ecommerce platforms in their expansion into these markets. We’re working with partners in those respective markets with a very risk conscious approach. And in Azerbaijan, we have already we are already at a high single million digit revenue number with a point positive earnings contribution. Also in Eastern Europe, we are expanding our out of home network. Our target is to, in the group, to have more than 20,000 out of home points by the end of next year.

Currently, we stand at around 1,600. We are in the midst of a very strong push in Eastern Europe, which is running according to plan. We continue to invest. We continue to invest in infrastructure and capacities both in Austria as well as international. We yesterday in the supervisory board made the decision to start the implementation of the last outstanding logistics center renewal and expansion in the city of Salzburg on the existing site.

This project will go into construction next year. And with that project, we will conclude the, rebuild and expansion of the Austrian logistic center networks. By then, we will pretty much have touched every, logistics center and substantially expanded capacity, improved speed, for the Austrian market. But also internationally, we are investing in growth. We are in the midst of a project in Budapest, which should open next year, a new hub in Budapest, which has, been a core center of of the growth in Eastern Europe with a lot of Chinese volume, coming to Europe via Budapest.

And then also also in Istanbul, we are in the planning phase for a large logistic center north of Istanbul. We also invest, heavily into technology, both in hardware, software, robotics, and, automation systems. Here are some examples. We equipped all Austrian, mail and and postman with new handhelds. Last year, we are successfully piloting robotic technology in our sorting centers, and in our ecommerce fulfillment business called systems logistics, we are successfully operating in auto store location and highly automized three d, storage and order picking system where we are serving Austrian large e commerce players in e commerce fulfillment.

Concluding this strategy update with an update on sustainability, we communicated a few weeks ago that by the end of the year, we will have fully switched the city of Vienna to C O Two free last mile. We are rolling out electric mobility across Vienna, and to our understanding, will be the first, largest city in Austria, where a whole postal network is completely c o two free. Only pedestrians, e bikes, and electric mobility. We are already across Austria standing at more than 50% electric fleet, and the plan, the road map towards 30 towards c o two free delivery across Austria in 2030 is defined. This train is running, and electric mobility, in the meantime, has positive total cost of ownership compared to combustion engines.

With that said with that said, I hand over to Barbara who will give us more detail on the financials.

Barbara Bortis Geibensteiner, CFO, Austrian Post: Thank you, Walter, and very warm welcome also from my side. Let me start with the financial highlights. For the 2025, when we set revenue and operating profit into the context of the previous two years, this reporting period compares well with the 2023 and was even close to the top line of the result of 2024 despite all the special effects last year. The other observation I would like to make is that we continue to have a strong balance sheet with a low level of debt and on the other hand, also a strong cash generation compared to last year. But let me go into further details of revenue development on the next slide.

If you take top line growth over the last reporting periods, group revenues were down by 1.1% compared to the 2024, but up to up by 15.8% between the 2023 and the same period in 2025, with mail down by 2.6%, parcel and logistics increasing by 30%, and retail and bank up by 23.4%. At the divisional level, Walt already mentioned the special effects from elections in May 2024 of about 20,000,000. In Parcel and Logistics, we had a positive FX effect last year in Turkey of about €65,000,000 In addition, a reporting chain in logistics solutions should be mentioned in the 2025, but this accounted for only one percentage point difference in revenue growth on the Parcel side. Parcel Austria showed a revenue growth of 5.2%, whereas Parcel in Southeast And Eastern Europe is volatile due to the volume shifts from Asia clients, with a big increase in volumes in Q1 twenty twenty four of 44% and in Q2 twenty twenty four of thirteen percent because of the volume push of the parcel consolidate. This year, the volume development in this region was in Q1, minus 13% and in Q2, only minus 1%.

In turn, Basel Turkey was up by 2.6% over the same period last year, but a significant 80% if compared with the 2023. This puts our long term ambition in this market into better perspective despite the volatility in exchange rates and continuing high inflation. Turning the page and applying the same divisional analysis for earnings, EBIT was down by 11% compared to the prior year, but only slightly below EBIT in the 2023. On a comparative basis to the same period last year, the main moving parts were the volume decline and lack of special effects in mail and lower profitability in Turkey and CEE. I’m particularly pleased to report positive earnings for our Retail and Banks division with an EBIT of close to EUR 5,000,000 in the first six months 2025.

This is based on positive contributions from Bank ninety nine as well as a good earnings development of the branch network. Next page, we present the group income statement for both quarterly and half year periods, and we’ll just add the following observation from my perspective. We talked about revenue development already. And on the cost side, we make our best effort to keep them under control. Staff costs, for example, despite various salary increases through collective labor agreements from last year and also from July 2025 onwards, we managed to keep staff costs quite stable year on year.

Other operating income includes proceeds from property sales of about EUR 5,000,000 and indexation of rent and leases. Also other operating costs show a slight increase mainly due to higher IT expenses. Bottom line, EBIT was 11% down year on year due to lower profitability, but still on the level of 2023. Going through the income statement for each division and starting with Mail, the revenue decline of minus 5.9% year on year or minus 2.6% compared to 2023 was based on two main developments: ongoing digitization efforts by major customer groups like banking insurance or telecoms as well as the cost pressure in the public sector and the lack of the Euro 20,000,000 special effects from elections in Austria last year. Ultimately, the strong volume decline and top line pressure resulting in lower profitability.

Looking at the income statement of Parcel and Logistics, we are pleased with revenue growth in Austrian traffic, but see somewhat filling the region of Southeast And Eastern Europe. This had to do with a push of volumes last year from the parcel consolidator as already mentioned. Revenues in Turkey rose by 2.6%, which had positive effects over the same period last year. Despite the positive top line development in parts and logistics, reduced profitability in Turkey and CE resulted in lower earnings. Finally, Retail and Bank was slightly below the revenues of previous year due to lower interest rates, but achieved a significant 23.4% increase if compared with the same period in 2023.

Having mentioned to turn around the bank by fully integrated IT system of ING Bank Austria and further improving the cost structure of our branch network, we are pleased about the first earnings contribution of Bank ninety nine and are now focusing on further developing our banking operation. Still further development of Bank ninety nine will remain challenging with interest rates coming down from 4% in June to 2% now. On the next slide, we present the debt factor, and I would highlight here not only the continuing low debt, with net debt to EBITDA of only 0.5x or 1.5x, if IFRS 16 on lease contracts is included. This provides us with optionality for both organic and inorganic growth opportunities. Our strong operating free cash flow is certainly a very important highlight of the 2025.

As you can see from the comparisons with 2024 at the bottom of the page, the higher cash flow from operating activities, excluding core banking assets, was up compared to last year. More importantly, the operating free cash flow, which is the main metric for dividend payouts, is up 9% compared to the previous year. Maintenance CapEx as well as growth CapEx were a bit under the level of last year. This brings us to the next page, which shows CapEx development over the last five years with a range between of 140,000,000 to 160,000,000. That is a level we also expect in the future.

We are finalizing our expansion program in Austria with an extension in Salzburg next year and the year after, and we’ll focus on CE and Turkey regions in line with volume developments there. In 2025, we aim for a stable CapEx of EUR 150,000,000 to 160,000,000 despite having spent only 41,300,000.0 so far. But as you know from previous years, we tend to have higher CapEx requirements in the second half of the year. With this, I come to the end of my presentation and hand back to Walter to give the outlook.

Walter Blinnen, CEO, Austrian Post: Yeah. Thank you, Barbara. Let me conclude with the outlook for 2025 for the full year. In general, we expect the market environment to stay challenging, in all areas. However, our target to come out at stable revenues and stable earnings remains intact.

On the revenue side, currently, our target is revenue at the prior year level, of course, dependent on the development of the Turkish lira euro exchange rate. On the CapEx side, as already mentioned by Barbara, an order of magnitude of EUR 150,000,000 to 160,000,000 is what we expect to spend. And on the earnings side, our targets remains unchanged. Earnings in the order of last year’s EBIT, so an order of magnitude of around €200,000,000 And with all that we’ve seen also over the last weeks, we are quite confident that this target is achievable. Thank you for listening, and we’re now happy to take questions.

Conference Moderator: And the first question goes to Patrick Steiner of OTOBHF.

Patrick Steiner, Analyst, OTOBHF: Patrick Steiner speaking. Three questions from my side. I would take them one by one, if that’s okay for you. The first one, looking at the segment level especially, could you walk us through your assumptions of the drivers affecting the second half of the year in order to arrive at your €200,000,000 EBIT guidance? And what are the main risk factors in your view?

Walter Blinnen, CEO, Austrian Post: Well, I think in general, we do expect, to come back to, slight growth, on the partner side across our portfolio. The seasonality of last year was, in particular, a very strong q one with a special, influx of Chinese volumes, in particular, in Eastern Europe. This peak is behind us. The second half of last year was not as strong. Also, main one offs on the mail side, were in q one.

In addition, we have, the impact of the product reform, with the tariff increase on the mail side. And with that and with several initiatives on the cost side, we are optimistic and confident to reach the EBIT guidance.

Patrick Steiner, Analyst, OTOBHF: Perfect. Thank you very much. Very clear. Second one, on on page twenty twenty two in the presentation, you stated the 6.45% salary increases mandated by collective bargaining agreements as of the beginning of 2021. I’m just curious.

The number seems a bit tight to me. Could you please provide maybe a bit more color on from which regions is coming, or is this an aggregate number? I mean, any information on that would be would be helpful.

Walter Blinnen, CEO, Austrian Post: Yeah. So the the 6.45 is the collective is a result of the collective collective wage agreement of, that was negotiated in March 24, effective, July, ’24. So this is kind of, more than a year ago. The most recent, result was 2.8. So this is always has always been inflation plus point 2.3%.

And, so we’re talking about something that is that was negotiated eighteen months ago. And the the most recent change that is so we to to to what misunderstandings, we negotiate in spring, with effectiveness July 1 always. And the the latest result, as I said, was 2.8.

Patrick Steiner, Analyst, OTOBHF: Okay. Thanks. Yeah. Very, very understandable. And last question.

If I understood understood this correctly, you were stating 3% volume growth in the Austrian parcel business in the first half. Correct me if I’m wrong, please. And could you maybe give us more information, that number for Q2, if possible?

Walter Blinnen, CEO, Austrian Post: I think we are we are careful, given some of the volatility that we’ve seen, over the last months with precise percentages, but I would I would say a low to mid single percentage point number is what we expect. It’s a little bit lower than what we expected a few months ago, but we do expect full growth for the we do expect growth for the full year.

Patrick Steiner, Analyst, OTOBHF: Okay. Great. Perfect. Thank you very much. I’ll get back in line.

Conference Moderator: And the next question goes to Christoph Schulters of Erste Group. Please go ahead.

Christoph Schulters, Analyst, Erste Group: Hi. I have a couple of questions actually. The first are related to the Parcel and Logistics business. The first one would be the decline in the SCE segment, which is related to the decline in Asian volumes. You mentioned in your presentation a couple of times.

Do you think that this is, in general, that the trend is now broken? Or is this in Europe in just a weaker quarter and long term positive development? And in particular, also maybe incorporating or thinking about the trade tariff discussions. So maybe you can give us a kind of base scenario you have for the SEE segment in the next couple of years.

Walter Blinnen, CEO, Austrian Post: Yeah. So overall, we see quite aggressive growth of Asian ecommerce platforms continuing, in some areas with, quite innovative, very cost efficient business models. So I don’t think the trend is broken. I think we have to, get a get used to more volatility. I think both in terms of volume and promotional activity, these customers have more intrinsic volatility, but also their loyalty to, partners, for logistics is less than, what we are used to, for European and US clients.

So in general, we we do expect continued growth. Also, if you look at what what happens with media marketing in Austria, so the takeover by jd.com, I think a very capable Chinese ecommerce platform brings a new player to Europe. And we also have seen Timo and the likes very aggressively expanding and really going to a next level. If you follow their communication, local to local is their next horizon. So, basically, they are expanding their Chinese, shipping Chinese goods to, direct to Europe.

They’re expanding that model or complementing it by, by acquiring local producers and retailers, online retailers in Europe, to serve the European market, and thus going head to head against other, ecommerce platforms. So I think it’s it’s much too early to to write further Chinese growth off. I would rather expect them to continue to grow at the expense of European online retailers.

Christoph Schulters, Analyst, Erste Group: Okay. Great. Thank you. And then you mentioned in your presentation also that you see again some insourcing ambitions and activities of international e commerce platform. And when I think back in the last quarters, you stated several times that you see e commerce platforms rather giving back volumes to you, and you were also able to gain market shares in this in the the b two c segment.

So do you think that you can lose now market shares again?

Walter Blinnen, CEO, Austrian Post: I think that message was focused on Turkey. I think in Austria, we see some kind of stability at least for the time being. And, you know, in some orders, we we gain a little bit more market share of some of the big, particular one big ecommerce platform, in some quarters a little bit less. But overall, I think there we have reached some, equilibrium, at least for the time being. In Turkey, we have two big customers that have grown their own delivery over the last years, which has also led to growth in Turkey.

Growth volume growth of Aras cargo become more flattish. I think also there, these customers have come to a point where further substantial insourcing is not something that we do expect in the near term.

Christoph Schulters, Analyst, Erste Group: Okay. Thanks for clarification. And then I have two more questions, if I may. The one would be looking at development in your Retail and Bank division. This was surprisingly strong in this quarter.

Were there any positive one offs? At least you did not mention any. You have reached more than €5,000,000 in the second quarter. And then I know you mentioned also the declining interest landscape we are looking at, but can we expect clear positive contributions in this segment also in the next couple of quarters and then years?

Barbara Bortis Geibensteiner, CFO, Austrian Post: So Bank ninety nine did a great job in in in the first half of of twenty twenty five. There were there were some smaller onetime effects. So we did some provisions for for the migration and and but this was only small effect, so we we were not we did not use them. And on the other hand, there was also positive impact of of retail. So what you can expect for the for the second half of the year is please do not take, the results of the first half two times.

Yeah? So this will not happen. You already said, okay. And the interest rates went down. This is also why we are rather cautious on the bank side, but but we we are committed for for breakeven.

So this we say. And on the other hand, we also had some positive effects on the on the on the retail side. Yeah.

Christoph Schulters, Analyst, Erste Group: Okay. Great.

Barbara Bortis Geibensteiner, CFO, Austrian Post: But this is more or in internal calculation.

Christoph Schulters, Analyst, Erste Group: Okay. Thank you. And my final question would be, also looking at the in your segment reporting EBIT in your corporate division. This was also the best of the last three years on quarterly basis. And I was wondering, I mean, you mentioned there that you did or this was partly due to some real estate portfolio cleanup.

So I would be interested in what this exactly was. And secondly, what you expect for the EBIT line of the Corporate division also on a normalized level in the future.

Barbara Bortis Geibensteiner, CFO, Austrian Post: Okay. So Austrian Post has has a rather big portfolio on the real estate side. A lot of of old branches, we we have old post offices, which are not in operation any longer. And and, what we did and and we also do, in the future is so there are some some low low performing, real estate, where we say, okay. We have to to invest.

And on the other hand, the return on the on the leasing side, rental leasing side is not that high, so we are selling them off. Yeah? So the impact in in the first half of the year was about 5,000,000. We also expect to to have this contribution also in in the future. These are smaller things.

So the the €300,000 sale of real estate, and and and this is the the size of of the senior transactions. Yeah? And I’m expecting it to go on also in the future for the coming years. On the other hand, on the corporate side, you’ll also see the impact of the of the our cost measures we took. This is on the, on one hand side, personal cost and on the other hand, also consulting costs and and and other costs.

Christoph Schulters, Analyst, Erste Group: Okay. Many thanks for taking my questions.

Conference Moderator: And the next question goes to Marco Limetti of Barclays. Please go ahead.

Marco Limetti, Analyst, Barclays: Good afternoon. Thanks for taking my questions. I’ve got two. The first one is just a follow-up on what you have just said around the outlook for the consumer service and the banking unit. Did I get right that you mentioned that we should expect the unit to still to be still at breakeven for the full year.

Yes, that will imply second half down EUR 6,000,000 EBIT. Maybe I got that wrong. And the second question is on your letter volume decline in the second quarter. We have seen letter volume decline accelerating versus Q1. And to be honest, also some of other postal operators in your geographical area have shown a bit as high single digit letter volume decline.

What are your thoughts around the outlook for the second half of the year and going forward for letter volumes? Thank you.

Walter Blinnen, CEO, Austrian Post: Thanks, Marco, for your questions. I will answer the the second one and ask Barbara to take the first one as a follow-up to her last answer. On the letter mail side, we have seen roughly 7% decline over the first half. This is the order of magnitude that we do expect for the, yeah, for the next months and quarters. Digitization is ongoing in Austria.

There are limited positive impulses. The government is consolidating its budget, So we do expect this somewhat increased rate of return for the next quarters.

Marco Limetti, Analyst, Barclays: And sorry. Just to follow-up on this. I mean, q two was lower than q one. But then I think in q three twenty four, you also had elections. So q three this year would also have very tough comps.

Right? So we should expect even faster letter volume decline in q three than q two?

Walter Blinnen, CEO, Austrian Post: I’m talking about, rather adjusted numbers. Yeah. So where we try to take off the take out the the the one off. So I would say as a as an intrinsic underlying trend, we we take roughly the 7%. And then last year, of course, we in q three, we had the parliamentary elections.

So, q three, unadjusted, we should expect a little bit stronger decline.

Barbara Bortis Geibensteiner, CFO, Austrian Post: Okay. On the bank and retail on the bank and retail side, so what are we expecting for the full year? I would say it’s it’s more, I would say, one to to to to 3,000,000 of EBIT for the full year. Because we had some positive impact on also Retail, it’s only internal charging, yes? And there, we had a special effect in the first half of the year.

And due to this, I’m expecting bank and retail to come down a little bit.

Marco Limetti, Analyst, Barclays: Okay. And maybe another follow-up question on one of the previous questions from a colleague. So in corporate center, I mean, we had minus 44,000,000 in 02/2024. Now we’re running at a very low run rate. I mean, shall we still expect, let’s say, high single digit to 10,000,000 per quarter losses or that has reduced now normalized?

Walter Blinnen, CEO, Austrian Post: I think, Michael, please bear with us that we do not provide guidance on a quarterly result per per division. I think if you look at the past, there is quite some volatility, in particular, on the corporate side given, you know, impact of interest rates on our provisions and, several things. However, I think what we can say is, we have taken additional initiatives on the cost side, in particular, in administrative areas from, you know, vacation around bringing down provisions for vacations to marketing spend, and we should see some of those savings also on the corporate on also on the corporate segment.

Barbara Bortis Geibensteiner, CFO, Austrian Post: And

Conference Moderator: the next question goes to Henk Slotboom of DID.

Henk Slotboom, Analyst, DID: Good afternoon. One question from my side. A lot has been said about the Chinese platforms and how you’re benefiting from it. At the same time, during the presentation, you said a couple of things like the loyalty of the Chinese is less. They are known to be tough negotiators.

How how and and there is the uncertainty of the EC, European Commission, which is weighing measures as well. How do you think all of this and what what is the rationale of of the of the move towards accommodating more of the Chinese volume? Because what it does to your margin probably is that it will cause pressure on your margins or is it so that you can safely use the volume they generate in the countries outside of Austria that it helps you to develop more critical mass in those markets? That was my question. Thanks.

Walter Blinnen, CEO, Austrian Post: Yeah. Well, thank you. I think a very good question. I think overall, our aspiration to is to be a a market leader in Austria and one of the leading, logistics providers, in ecommerce in Eastern Europe and Turkey. And as such, I think we also have to work with large Chinese platforms as I do expect them to grow in market share and to be a core driver of growth over the next years, point one.

Point two, yeah, these are challenging customers, but, of course, we only work with them if there is a positive contribution to our p and l, which we have seen over the last year since we’ve been working with them. And third, I think coming to your question on if if I understood it as a question correctly, what what will be the impact of European regulation on on on a more chain and and the like. My personal opinion, but I might be right or might be wrong, is that this will have limited impact. I think they, whether there is a €2 surcharge, or not, will not make a big difference as very often the cost difference between, between similar goods on TEMO, Shane, or wherever compared to European retailers is much more than the €2, and that will not make a very big difference. And second, as I mentioned earlier, they are already anticipating stronger regulatory barriers and trying to build up suppliers, logistics platforms also in Europe.

This is this local to local, what you can observe with TEMO. And finally, I think that Europe will have to try to keep a somewhat friendly relationship with China as otherwise given the difficult relationship with The US. I think European industry will will suffer on on both sides in the West as well as in in the East, and I think this will not be a good scenario for Europe.

Henk Slotboom, Analyst, DID: Okay. Thank you very much.

Walter Blinnen, CEO, Austrian Post: But but that’s a personal opinion.

Henk Slotboom, Analyst, DID: Okay. Well, I agree with you on the on the €2 surcharge that it that it wants make a difference. But maybe as a follow-up, there’s also been a lot of talk about the safety of products sold by and that sort of things. And in that case, they could face a heavier fine, and that could more constitute an obstacle for them to ship stuff to Europe than than than just a €2 surcharge per parcel. But, again, I I fully agree with you on the on on the remarks you made on the on the €2 scene.

Walter Blinnen, CEO, Austrian Post: Yeah. Yeah. I think in general, as far as we have got to know them, I think these are very, capable companies. These are very, financially strong companies. These are platforms that have emerged as winners in a very competitive 1,400,000,000.0 consumer market in China, and we should not underestimate their aggressiveness and their ability to adapt to whatever challenges they face.

And I think they will learn to cope with, and they will become better in in eliminating products that are not compliant with European regulations. And I think that will not substantially limit their growth. Of course, there will be some ups and downs, but in general, I would expect them to grow further.

Henk Slotboom, Analyst, DID: Okay. Thank you very much.

Conference Moderator: Okay. There seem to be no further questions. So let me now hand back over to Harald Hagenorff for some closing remarks.

Harald Hagenauer, Head of Investor Relations, Austrian Post: Thanks, ladies and gentlemen, for participating in this call. If you do have some more questions, don’t hesitate to call us today or the next days. We are available. And if not, of course, we wish you a very nice weekend. Goodbye.

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