Oesterreichische Post AG Q1 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andre F. M. Mulder - Kepler Cheuvreux, Research Division - Analyst : A couple of questions. Firstly, looking at the increase in letter mail sales -- or the decrease. It's only 2%, whereas the volume decline is around 4% to 5%. So what's happening there? You haven't raised your prices yet. So is there a positive price/mix effect? Looking at the decline in Direct Mail and press, you're stating a 9% decline in volumes. Could you split that out in Direct Mail and press volumes? So I assume that it's mostly concentrated in Direct Mail and hardly anything in press. On parcels, we see a good volume growth in Central and Eastern Europe. What do you mean with good? If I compare to the sales increase of 12%, it should be the first time in many quarters that I see a positive delta from these 2. Then on the outlook, what puzzles me a bit, you're -- more than ever, looking at the detailed outlook, saying that you see a high single-digit decline in letter mail and Direct Mail and 15% increase in parcels, but that's still short of giving either a sales or an EBIT number there. So what's keeping you there -- what's keeping you from giving us sort of the range there? And to what extent are the extra costs in the branch network included? Are you still looking at EUR 35 million there? Those are my questions. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 14, 2020 / 1:00PM, POST.VA - Q1 2020 Oesterreichische Post AG Earnings Call

Question: Andre F. M. Mulder - Kepler Cheuvreux, Research Division - Analyst : On the good -- with good volume, you may -- let's say, mid to high single digit, in that range, single digits?

Question: Andre F. M. Mulder - Kepler Cheuvreux, Research Division - Analyst : And the gap between the sales increase and this volume increase is that pricing, is that price/mix effect? Walter Oblin - +sterreichische Post AG - CFO and Deputy Chairman of the Management Board and Deputy CEO of Mail & Finance Well, we also include this mail solutions business in this product subsegment. And so mail solutions is a value-added services business, where we have -- where we are consolidating direct digital marketing company, which can get an impact of roughly EUR 2 million. And where we have shown good growth in both output management services as well as input management and document logistics services. But you're right. So in letter mail, there is no tariff impact in Q1. On your question with guidance, Andre, sorry, we understand this is not satisfying to you, but we just have limited visibility. We have a government which every -- which basically gives us 2-week visibility on how the lockdown measures will be lifted. Our customers have a 2- or 3-week visibility what they will do and are themselves eager to see how customers are flowing back to their stores, how their sales are doing. And so in particular on the Direct Mail side, we do have very limited visibility. And given that this is a part of the business with low marginal costs, volatility there is pretty much directly flowing into the EBIT. And also, on the other -- also on addressed letter mail business, we have now the April figures. And this is -- hopefully, we have left the worst behind us, but we do not have visibility how government authorities will resume the work, how they will catch up with speeding tickets that lie on their desks and things like that. What -- we do have limited visibility what is really lost volume which will not come back because the transactions have not been done in banking, in -- also on the government side and what is ongoing business where there is a catch-up potential. And sorry, given that particular mail revenues without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 14, 2020 / 1:00PM, POST.VA - Q1 2020 Oesterreichische Post AG Earnings Call translate very directly into the EBIT line, we ourselves do not have the visibility on earnings. We do have different scenarios, of course, and we learn every week. And we hope to come back to a full year guidance in Q2.