Oesterreichische Post Ag

Ladies and gentlemen, thank you for standing by. Welcome to today's earnings call of Austrian's Post's full year 2025 results. I am Ingmar, your operator for today, and I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. If you would like to ask a question, you may click on the raise your hand button. We are looking forward to the presentation. And with this, I hand over to the head of investor relations, Harald Hagenauer.

Good afternoon, ladies and gentlemen. Welcome to this conference call of Austrian Post. Today we would like to discuss the full year, the Q4, and also recent trends of the company. Here with me in the room is Walter Oblin, our CEO, and our CFO, Barbara Bottisk-Eidensteiner. I would like to directly hand over to Walter for the presentation. So please go on.

Good afternoon, ladies and gentlemen. It's a pleasure to have the opportunity to present to you our full year results for 2025. As a summary up front, the environment has been challenging, continues to be challenging, But we can show today. I think quite solid results for the full year That prove our resilience and stability Let me start on page two Highlighting the context in which we operate overall the longest recession in the longest postwar recession in Europe is Most likely coming to an end until two weeks ago the forecasts on inflation and GDP are were relatively positive. In the meantime, we've seen the Iran war change a number of things and uncertainty has come back. Given all this, there are still two dominant drivers of transformation within the postal industry. Number one, the continued decline of letter mail and direct mail coming from the digitization of communication. and second the growth in e-commerce driving parcel growth across geographies. In this context, we have, I think, shown a quite stable development. This picture, this chart summarizes the key indicators for the full year 2025, revenues 3 billion, 43 million. 197 million. We continue to operate in three business segments with very different drivers and characteristics. Mail, our Austrian legacy business, is still an important and profitable business with revenues of 1.155 billion. Second, Parcel & Logistics, our growth engine, within the meantime, 1.72 billion. Revenues by far the largest business in our group a portfolio consisting of in the meantime more than 14 geographies and third retail and bank this is a combination of our Austrian retail network with Bank 99, a small but growing business where I think the most important highlight of the last year was the breakeven of Bank 99. Let me also remind you here, and I will come back to that later, that as of 2026, we will slightly adjust our segment reporting, moving the retail part of the retail and bank segment to mail segment, basically bundling all USO related businesses while at the same time showing the bank as a pure segment. In this challenging context, page 4, we have shown a solid business development based on a quite good Q4. Revenues, as over the first three quarters already shown, slightly below a strong 2024. 2024 included two quite substantial positive one-offs. One was a super election year in Austria with four countrywide elections contributing revenues of 40 million Euro. In the absence of these, our mail business of course showed a stronger decline and second was a positive combination of Turkish Lira and inflation in the country in total a positive one-off in 2024 of roughly 80 million given these positive one-offs in 2024 we are quite satisfied with the revenue development also with the EBIT and EBITDA development in 2025 as all important P&L lines are significantly above 2023 and the strong growth that we've shown in 2024 has consolidated on a high level. The basis for whatever we do in the company is our strategy LEAD 2030, a strategy that we worked out over the last about one and a half years ago and communicated last May. Three business directions. Number one, we want to be a strong post in Austria, but we want to go beyond post. We want to be a leading provider of key services. postal services, banking services, telecommunication and potentially more in the future. Number two, international e-commerce is our growth opportunity. We are already today reaching 150 million people in a region consisting of Austria, Eastern Europe and Turkey and in this region we want to invest further in profitable growth and become one of the leading e-commerce partner for online retailers in this region. Number three, one group operationally excellent. This includes two dimensions, stronger integration across the group, across our portfolio of countries and businesses. And second, operational excellence as an aspiration across our value chain with a strong focus on efficiency and technology. And in the middle, three overarching values and guidelines. One is sustainability. where we have a few lighthouse projects, including our e-mobility and PB in Austria. Second, a customer focus across whatever we do. And third, a strong company culture and the aspiration to be one of the leading employers in our respective skill groups. In with the strategy we are transforming the company at accelerated speed Here this page 6 shows a few highlights in Austria the last year In May we implemented several changes in on products and pricing to adjust for the declining volumes at the same time we are pushing for regulatory reforms and Bank 99 reached breakeven and achieved a number of important milestones and we're looking optimistically into the future of this bank. In two and a half weeks we will launch our yellow mobile phone offer um... and uh... extend our service offering by uh... through an MBNO offering and uh... uh... last but not least uh... in Austria a strong network initiative uh... extending our number of postal access points from one thousand eight hundred to almost three thousand within two years Within the international e-commerce thrust Some important expansion steps in Eastern Europe most recently two acquisitions in Bulgaria and Hungary a strong push on our out-of-home Network in particular with locker with lockers and um and uh on the strategy pillar number three um i think it's worth mentioning that we have started a comprehensive program called operations 2030 uh that will transform the way we a operate and deliver in Austria fundamentally over the next years second important investments across our important regions we will next week launch a project in Salzburg one of the last logistics centers that we haven't either built new or expanded We're in the middle of a big expansion project a new logistics center in Budapest in Hungary And same is true for a big site in Istanbul Page 7 shows you our international footprint in total 15 countries Austria Eastern Europe Turkey and beyond Turkey, Azerbaijan and Georgia as countries where we have logistics networks on the ground. In Germany, we are still present with a state subsidiary. and a minority share in AEP, a pharmaceutical discount wholesaler, which we have decided to divest. And in Greece, we are present with an IT nearshoring provider, which both serves Austrian Post, but also the third market. Page 8, moving to now our individual businesses. Page 8 shows you an overview of the letter mail business long-term development. We are now in the 18th year of mail decline. 60% of volume roughly has been lost. Similar development, but not as pronounced on direct mail and media post. In total, revenues are still on a significant level with 1.1 billion Euro revenues from letter mail and direct mail and meter post. You see that we have achieved a revenue decline that is much less than the volume decline, so constant price and product adjustments have helped stabilize the business. It is still a profitable business. We're doing everything to keep it relevant and affordable. Part of that are tariffs that are relatively moderate compared to other European countries. So the standard letter in Austria still only costs one euro and the premium product delivered next day one euro thirty. I think this shows that we also have room to further increase prices without pricing ourselves out of the market. Page 10, a few facts about the development of our Bank 99. Bank 99 was founded five years ago on April, so now almost six years ago, but last year finished the fit full business year. In the meantime, we have a balance sheet of 4.2 billion Euro, a quite risk-averse balance sheet with a loan portfolio that consists of mortgage loans and consumer loans. The whole balance sheet has proven to be very robust and resilient throughout the last years which have shown quite a lot of stress on bank balance sheets with high inflation. We were able to deliver the promise break even last year with an IFRS earnings of 1.5 million. We hope to move further into positive numbers this year. We also made our initial first placing on the bond markets with a preferred senior bond. was a volume of 85 million. Before that, we got an investment grade rating. So a number of milestones that have been achieved last year. And there are clear priorities for 2026. First, further expansion for distribution channel and full focus on gaining further customers and across selling across existing customers. Number two, extending our securities offering. Number three, extending our product portfolio for SMEs. And number four, a clear focus on cost discipline and efficiency that already helped us last year reach the break even in the second half of the year. Moving to our Austrian retail network, we're in a big forward initiative and a big expansion across Austria with self-service facilities extending the number of postal access points from 1,870 to 3,050 as a target for this year and almost 3,000 implemented end of last year. This is extremely well received by consumers. Last year, 35 million shipments either shipped or received via self-service stations and with a strong growth of 8% compared to 2024. In the two weeks, April 1st, we will launch a new mobile phone offering We have been present in telecommunications throughout the existence of Austrian Post, most recently as a sales and distribution partner of A1. Now we are launching an MBNO, again in cooperation with A1, the leading Austrian telecom provider and telecom incumbent. The position of this will be high quality at affordable rates combined with service by our employees, by postal employees in our dense network consisting of postal offices and postal partners and we are convinced that there is a similar opportunity for this telecommunication offering as for our bank offering. Moving now to strategy pillar number two, strong growth in international e-commerce. Page 13 shows you the development of our international, our group parcel volumes across the last years, over the last years. So last year, a year of consolidation after strong growth. The two years before, volatile Chinese customers Contributed to you know, some volatility also throughout the four quarters Q4 was quite good in particular in Eastern Europe and we were able to Come back to the level of 2024 after a difficult start into the year in Austria continued growth page 14 showing more depth on Austria and Last year 232 million parcels delivered so full year growth of 3% Q4 growth of 6% translating in good revenue growth we continue to gain customers based on a superior quality that we offer and page 15 as a result we are the clear market leader in the Austrian parcel market with a in the total market of 56% in the growing B2C market of 63% followed by Amazon and DPT all of them with substantially lower market shares Moving to Eastern Europe Page 16 shows you our Eastern Europe portfolio of group companies complemented by our newest acquisition EU Shipments which we closed last Friday which is not consolidated of course in the figures shown here last year 78 million parcels after more than double digit growth in 2024 a year of consolidation there's a lot of volatility among Chinese e-commerce platforms page 17 gives you an overview about EU shipments we think a very interesting addition to the group was recently added to the included in the group the Financial Times Group of 1000 Europe's fastest growing companies What is the service offering of EU Shipments? It's basically a one-stop shop e-commerce offering for small and medium-sized customers that want to ship, that want to serve international consumers. So EU Shipments provides the software integration into different marketplaces. The core logistics fulfillment, so warehousing, and the pick and pack servers and then connects to a portfolio of different last mile providers. Austrian Post today already is one of them, but the company will continue to maintain a multi-vendor last mile network. Last year 50 million revenue 60 million parcels Handled for 1,300 business customers and the company has shown very good growth Page 18 moving to Turkey again here also a lot of volatility with Chinese e-commerce platforms number one and number two continued insourcing by the two biggest Turkish e-commerce platforms that results in a smaller non-captive share of the total market Arascago last year in a year of consolidation with strong growth on the revenue side but this is mainly driven by inflation Translated in Euro small decline given that 2024 was a very favorable relationship of inflation to currency decline We aspire to push growth stronger over the next years moving to page 19 through various strategic initiatives driving growth in Turkey but also internationally in countries like Azerbaijan, Georgia and Uzbekistan, putting quality first, improving quality of delivery service where it does not meet the highest standards and a continued focus on efficiency. Across the group portfolio, we are pushing Out of home network options I mentioned Austria but also outside Austria we are targeting roughly 10,000 locker and out of home So 10,000 lockers and around 20,000 total out-of-home locations and we are making good progress and we also recently communicated an acquisition in Hungary which is not closed yet which will add roughly 1,100 lockers to our Hungarian parcel company. We are investing across the portfolio page 21 shows you that we have clear targets for expanding our sorting capacity both in Eastern Europe as well as in Turkey some bigger projects underway and page 22 illustrates that we are across geographies transforming the way we operate in our core logistics Direct to locker tours is one important element end to end acceleration making sure that we offer large e-commerce platforms an opportunity to deliver next day when the customer is ordering late at night and that our value chain is ready for very late cut-off times and automation and robotics will further increase our efficiency. With that said, I hand over to Barbara, who will give us more details about our financials.

Thank you, Walter. Also warm welcome from my side. As already said, the year 2025 was a quite a challenging one, but Austrian Post was able to deliver stable performance. So starting with revenues of 3.04 billion, we were able to increase our revenues by 11% versus 2023, but compared to 2024, we had a decrease of minus 2.6%. EBIT of 197 million, up by 3.5 million versus 2023, with a minus of 5% versus 2024. I will come later on to the reasons why we were not able to achieve the results of 2024. Balance sheet, the solid balance sheet structure with a low debt, the financial debt to EBITDA ratio of 0.2 times and a logistic equity ratio of 30%. What we also were able to deliver in 2025 was a strong cash generation, but also there I will spend some words later on. Coming to the page 24. Revenues, as already said by Walter, the mail business was decreasing in 2020. and we had a super year of elections in 2024, which had an impact of about 40 million on the revenue side. So it's fair to compare 2023 to 2025, but even then, on the male side, we see that the business is going down. Basel & Logistics revenue up by 0.4% in a different environment on the CE side and also in Turkey as already mentioned by Walter in CE we saw heavy competition and also the loss in Q1 one important Chinese customer but in Q4 we were able to pick up by 7.2% in Turkey we were expecting a rather strong Q4 but end of November we had a cyber attack and due to this we lost volumes and also revenues in Q4 Austria plus 5.8% also is a very strong Q4 of 7.2% Retail and Bank due to the low interest rates The revenues decreased by 8.8%. Coming now to the profitability, with 197 million, we showed solid earnings. Coming to mail business, there we had a decline in volume and positive special effects in 2024, as already mentioned. The EBIT is down by 30 million, but what I already mentioned, the elections in 2024 and this was the boost for results in 2024. On the passive logistics side, we saw an earnings increase in Austria due to higher volumes and prices and an intense competition. in Turkey and in CE. In CE we were also facing uncovered fixed costs out of the old home investments where we are quite sure that we are able to cover them within the coming years. Retail and bank, We were very happy that Bank 99 delivered breakeven and the whole segment, retail and bank, we are now showing for the last time, was able to show an EBITDA of 6.9 million. On the corporate side, we see the impact of cost-cutting. On the other hand, also the sale of properties and we also have negative in the previous year due to provisions we had to take. Coming now to the more detailed P&L, I only want to focus on staff costs. If you take the year 2024 and the year 2025, you see that we were able to decrease staff costs. Even we had an increase on the wage side mandatory to the collective agreements in Austria. were able to cover this. On the other hand, also on the operating cost side, we were able to decrease the cost. So cost discipline in all areas were also supporting the EBITDA of 413 million euros and the EBIT of 197 million. On the financial side, we had a positive impact in 2024 out of the devaluation of the boot option of Aros Cargo and on the other hand also higher interest were supporting the financial result. Profit for the period 134 million, which ends up in earnings per share of 1.96. I only want to go very fast through the single divisions. Starting with main division, there we see the decrease on the EBIT margin coming from 12.7% in 2023 and going down to 11.2% in 2025. Also on the passive and logistic side, due to the negative impacts coming out of Turkey and CE, we were ending up with an equal margin of 4.7% compared to 6% in 2024. Retail and bank division, there we had in Q4 a negative impact of a provision which has to be taken in Q4 in the bank. Due to this, Q4 was not that good, but this we already expected. So even then, bank 99 showed up with a result of 1.5 million and hold segment was 6.9 million. Coming now to the balance sheet where we also see a growth coming from bank 99 on the one hand side and on the other side we were increasing our bank financing and we also have more cash in our balance sheet as we already prepared the M&A payments in June 1, 2020. On the other hand, you also see that we were able to increase our equity up to 767 million. The positive development of the operating free cash flow of 280 million was coming from a positive tax credit for profits for 2022 received already in Q1. On the other hand, we also decreased maintenance capex in 2025 due to the weak business environment. This was driving our operating free cash flow. On the other hand, we also spent 17.2 million in further growth projects. Coming now to capex, capex down to 126 million, 17% out of this spent internationally and 83% in Austria. Money was going to the vehicle fleet, on the other hand to our out of home business and to our postal stations, bus and machines. Also on the sustainability side we are well on track. The key message is out of this. in 2025, we already had 60% CO2 free delivery in Austria. We were also able to build up our photovoltaic systems to 20 megawatt peak. We already had 6,360 electric vehicles. We had 36.2% women in leadership. We had no federal work-related accidents. Agenda Pay Gap of 3.2 and also on the governance side we were further able to improve with actions like a group-wide certification on the procurement side with a group-wide supply chain management and with a group-wide measurement of customer satisfaction. Coming now to the decarbonisation roadmap in Austria, we were able to decrease our logistic related carbon emissions by 21%, mainly coming out of our electric vehicles. and the ESG indicators I already mentioned, the decrease on the logistic-related carbon emissions of EV fleet I already mentioned. They were able to increase the number of vehicles by 21.5%. I would like to hand over again now to Walter to say something about the dividend policy and also to give you the outlook. Thank you.

Thank you, Barbara. Yeah, our dividend policy for 2025 is €1.83. It is a stable dividend. We are thus delivering on our promise of being an attractive and stable dividend stock now for almost 20 years since the IPO in 2005. We have been delivering attractive dividends during the financial crisis of 2008 and 9. We have been delivering dividends in 2020 during the pandemic and in the years following also during the Ukraine war and with this dividend proposal and with our full year results moving to page 37 we continue a 17-year track record of stability, resilience, promise and deliver combined with decarbonization of logistics and also stick to our attractive dividend policy. Let me wrap up this presentation with the outlook for the running year. I think as said in the beginning, the big two megatrends will continue to shape our business. Mail will continue to show a volume decline, slightly accelerated in Austria. At the same time, parcel growth is fundamentally driven and continues to be driven by growth in e-commerce. However, we see here intense competition across our regions, uncertainties related to regulatory reactions to the growing inflow of Chinese parcels across our countries. With that said, we do aspire and forecast a slight revenue increase in 2026 Again here a reminder of the change in segment reporting from 2025 where we over the last years have reported the three segments mail, parcel and logistics and retail and bank to a segment reporting as of Q1 Where we regroup the retail network into the mail Segment, we will call it mail retail and services Second part and logistics content wise pretty much unchanged But we will rename it into e-commerce and logistics because we think this is what it's fundamentally about growth in e-commerce and and third we will show the pure bank 99 given that the bank now has critical mass will contribute positive earnings to the group page 39 continued outlook on investment again in the a little bit higher than last year but on the level of previous years 140 to 160 million with a bigger investment in our Salzburg logistics center continued build out of our locker network and further electrification of the electric vehicle fleet on the earnings side we forecast and target broadly stable earnings in the order of magnitude of previous years we want to mention and point you to the fact that we expect a weaker first six months for the full year and stronger second six months in particular Q1 will be negatively affected by a silent period in telecommunications where we neither have revenues from the old cooperation with A1 nor from the Mb&O, which will only be launched on April 1st. At the same time, we do have launch costs and costs for changing for physical changes in our retail network. The second factor weighing on our results is a challenging market environment in Eastern Europe. And third, we have seen a quite strong reduction in inflows of Asian parcels in Turkey, following basically an abolishment of a threshold for duties to be paid for. import. And finally, I think I repeat our dividend proposal of €1.83 per share and of course our commitment to stick with our dividend policy also for the next future years. Thank you very much for your attention and I'm looking forward to your questions.

Ladies and gentlemen, at this time we will start the question and answer session. If you would like to ask a question, you may click or raise your hand up. If you are connected via phone, please press star key 9 to enter the queue on your telephone keypad. Star key 6, you can unmute yourself. One moment for the first question, please. We have the first participant and Mr. Schmidt, you should be able to speak now. Mr. Schmidt, you have to unmute yourself.

Now? Yes. Thanks. Good afternoon. First of all, congratulations on the strong 2025 results and your great progress as a green sheet. So impressive. But given the situation in the Middle East, how are you managing the rising oil prices and increasing geopolitical risks? And are these risks already fully included in your 2026 guidance? Or do you see a threat to your margins if the situation stays this way? Thanks.

Yeah, thank you India for this very important and obvious question. It allows me a little bit to comment. Let me first start, how are we affected by the war in the Middle East? I think the good news is there is no country in our portfolio with the slight exception of Azerbaijan, where I think a rocket hit that is directly involved into the war. uh... turkey of uh... so far and we hope that stays like that and i think there's a good probability that it would not be moved in the war has not been uh... affected by the war uh... rather continues to be a in moderator and the facilitator to uh... come back to peace so uh... first good news is there is no direct uh... uh... extension of the war uh... into uh... any of our uh... portfolio countries uh... number two The I would say the results or the the impact of the Iran war is not fully priced into our guidance because it was more or less Draft in letters and around two weeks ago before we published our our annual report and But I think at this point in time it is for us still far too early to really have a Good grasp of what the impact will be. I think it will be it will very much depend on how long this war will go on and how long in particular the Choke of oil and gas supplies will will last the good news here is that in Austria we are Not that much dependent on oil anymore with 60% of the fleet electrified and more than 20% of electricity coming from our own roofs we have at least somewhat decoupled us from oil price but of course overall with an increase in oil prices and gas prices also electricity will so indirect there is an effect but I think the good news is that energy prices have a relatively small share of our total cost so I think it's too early to tell there is some degree of optimism that the will not have Very substantial, long lasting effects on the European economy. And with that said, of course, we will update this guidance in May.

Okay, thank you for the insights and all the best for the business development in 2026.

Thank you so much.

Yes, thank you very much. And we move on to the next participant. Ms. Iseling, you should be able to speak now and unmute yourself.

Sorry, we cannot understand you.

The line is very bad.

I don't know what we can do. Can you just retry maybe with a different microphone? Can you hear me now? Yes, it's wonderful. I would think the first question is on the acquisition of Bulgaria in Bulgaria of EU shipments. So you have disclosed 50 million revenues in 2025. Would you be able to disclose the expected EBIT for 2025 and perhaps the acquisition price? The second question is where should we expect profitability to be for the bank division in 26? And thirdly, can you maybe explain the moving parts from the change in the telco service and how much headwind you expect in the short term from this change? Thank you.

Yeah, so first you're right, the EU shipment showed a revenue of 50 million. Please bear with us that we're not disclosing margins or the transaction price but it was a good margin we see good growth and we are optimistic that we can maintain both good growth and good margins number two profitability of the bank I think the aspiration is to be a middle to higher single digit million euro figure in earnings before tax for this year and I think the third question was on the on the change in telecom revenues and contribution last year versus this year if I understood you correctly so last year we roughly had 20 million in revenues from the terminated A1 corporation and this year, given that we only launched the service April 1st, we probably will end up with a smaller single-digit million-euro figure in revenues. There is, of course, also some cost reduction, which we have taken in the meantime to reduce the delta on an EBIT level, but in particular in the first half year, there will be a significant charge. was a significant delta versus last year.

Thank you. Okay, so and we move on to the next participant, Mr. Slotbaum. Hank Slotbaum, you should be able to unmute yourself and place your question. Mr. Slocum, you should be able to unmute yourself.

Hear me now?

Yes, you can speak a little bit louder so that we can hear you loud and clear.

Okay, thanks for taking my questions. I had a follow-up question on EU shipments. What kind of business is it really? You have to get a bit of a feel, you don't disclose the margin. But is it more like a fulfillment business? Like, vPost has a couple of things like that, Radial and ActiveANZ. Is it something comparable to that? That's the first question. The second question I have is about the 30% you don't own in EU shipments. Have you made an arrangement with the sellers to be able to buy them out in due course as well? I can imagine that you want to keep them involved for the time being. And the third question is more of a clarification question. You said something like last year were revenues on the back of the A1 contract, the telephone contract. Was that in the first quarter or was that on a full year basis? Those were my questions. Thank you.

Thank you for your questions. Let me start with the last question as it's easy. The 20 million were for the full year. then on EU shipment so let me try to explain the business model basically it's a one-stop full service offering for small and medium sized customers that want to do cross-border e-commerce so basically what the company provides is first a software that helps companies very quickly integrate into eCommerce platforms, be it Amazon, be it Temo, be it smaller local eCommerce platforms with a lead time of less than two weeks. So one, software integration. Number two is warehousing. Number three is the pick and pack for individual orders. And then number four is they basically... offer last mile solutions not there they don't operate own networks but they basically have contracts for a number of countries with different providers you know including Austrian Post but not exclusively and basically they sell this full-service offering to small and medium-sized customers.

Okay, so as far as the last model is concerned, they use third parties, it's an asset-light model. Does the asset-light thing also cover the warehouses and that sort of things, or do they own the warehouses themselves?

No, it's an asset-light model based on OTSO's last-mile operations and leased warehouses.

Okay. Thank you very much.

I still have to answer your second question, which is the question, are there options for the remaining 30%? Yes, there are put-and-call options to allow 100% takeover for Austrian Posts. but also to put for our partner. But we believe there is a lot of value in the strategic cooperation and there is a lot of optimism that we will remain partners for longer. But I see how it works out, yeah.

Okay, that's all clear. Thank you very much.

Thank you very much and ladies and gentlemen if you would like to ask a question you may click on the raise your hand button and in the meantime we have received no further questions and therefore I hand back over to Harald Hagenauer

So, thanks, ladies and gentlemen, for being in this call. If you do have some more questions in the next days, please don't hesitate to call us. We are available for you. Thank you very much.

Ladies and gentlemen, the conference is now concluded and you will be disconnected. Thank you for joining and have a pleasant day. Goodbye.