Good afternoon, ladies and gentlemen. Welcome to this conference call of Österreichische Post. Today, we would like to give more details on our Q2 and half year figures, and I will directly hand over to Walter Oblin, our CFO. Please, welcome Walter.
Good afternoon, ladies and gentlemen. It's a pleasure to have the opportunity to present to you our results for the first six months of 2023. As a summary up front, I think we're all aware that we're operating in a challenging environment, I think given this environment, our business portfolio has shown to be resilient, and we can report, I think, good numbers for the first six months. Let me start the presentation on page 2. This shows you our, I think, well-known structure of Österreichische Post. We operate and report in three segments. Our major segment, our parcel and logistics segment, comprising 10 networks, Austria, a number of international markets, including Turkey. And our third segment, retail and bank, which includes both our retail network as our bank99.
Progressing to page 3, the environment remains challenging, and over the last 3 months, also became a little bit more challenging, I would say. Number 1, we see subdued demand among both our online retail customers, as well, and even more in the stationary Austrian retail market, where we see over the last months, an increasing consolidation with retailers exiting or substantially shrinking their business models, affecting demand for our services. Number 2, throughout our portfolio, inflation remains high. It's coming down a little bit, but still very high, whereas GDP growth is coming down.
Third, in particular, over the last two months, Turkey has not only shown a strong inflation, but after the presidential elections, also substantial devaluation of the currency. I would say unexpected devaluation of the currency, but still, this has had impact among our numbers. Page 4, given this environment, I think we can report good numbers. Our business portfolio has shown resilience as opposed to this challenging environment. We can report here 6% revenue growth and an EBIT of EUR 95 million, which is up roughly 5% compared to last year.
Mail being almost flat, so which means that we could compensate declining volumes with price increases, parcel and logistics in a quite good growth mode with almost in all, with double-digit growth or almost double-digit growth in all our markets, Austria, Turkey, and Eastern Europe. Third, our retail and bank segment benefits from the increase in interest rates over the last 12 months, and as a result, an expanding net interest margin. As a result, the revenues in this segment are up 41%. Moving to page five, which shows you our group revenue development compared to last year.
Full group revenue is up 6%, substantial above average growth still coming from Turkey, despite the devaluation of the currency. Outside Turkey, growth of 4.4%. As I already said, mail almost flat, parcel and logistics up almost 10%, whereas whereof 7% growth is where in the portfolio outside Turkey, we've seen 6.8% growth. Even without even in the portfolio, in the purely euro-denominated business portfolio, we're up 6.8%, and retail and bank segment up 41.3%. The growth numbers are substantially lower than in Q1, this is predominantly coming from the currency effect from Turkey.
Moving to page 6, this currency effect is made even stronger by the hyperinflation accounting standard that we're obliged to apply since a good year, which basically requires us to book all P&L numbers and also all balance sheet numbers at the currency rate of the end of the quarter, meaning June 30. That means that also the revenues that we already reported in Q1 are de facto readjusted, and this has had a substantial revenue impact. Just the Q1 readjustment has cost us EUR 22 million revenues that we now report in Q2. If you would adjust for that, also in Q2, the Turkish revenues in Europe would show a growth.
The -14.5% that we, that you see here on this chart, include those EUR 22 million basically readjustment of the Q1 figures. This chart also shows you that outside Turkey, we show a, we see a robust growth of around 4.4% as an average of Q1 and Q2. Turkey, let us emphasize that, is Turkey shows a very strong development, a very strong performance. Aras Kargo is number one in the Turkish parcel market, and continues to grow double-digit figures, 11% in the first six months.
Volume-wise, the company is able to forward price increases in a high inflation environment to customers, reflect the tier and revenue increase of more than 100%. As a result, also in Europe, despite the strong currency devaluation that we saw after the presidential elections, EUR figures are up 23%. Very strong. Last point, this at margins, which are above group average margins. Very strong development in Turkey, and we are very happy to have Aras Kargo in our portfolio despite the currency fluctuations. Moving to group EBIT development, page 8. As I already said, group EBIT up 4.6%. This is the net of a decline in the Mail and parcel and logistics segment.
Please be aware that last year we had a one-off, a positive one-off, coming from the valuation, from a put option for the remaining 20% for Aras Kargo, in the amount of almost EUR 11 million. A positive one of last year. If you would adjust for that, even our parcel and logistics segment would be, would show a positive EBIT development compared to last year. We also last year had revenues and quite significant profit contribution still in the first six months from COVID test logistics in Austria. Also that is has fallen away. On a pure operational level, also parcel and logistics segment was a good development.
In mail, we see some margin pressure coming from the de- combination of volume, decline and cost increases. Still the EUR 77.6 million and a strong absolute EBIT contribution, and it is at also good double-digit EBIT margins. I would say the positive highlight of the first six months was our retail and bank segment, where we are after a long time of ramp-up losses, now showing a small positive figure, like zero, as we would call it.
This is the combination of a bank99 result that still shows small negative earnings numbers for the first 6 months, was a positive result in our retail segment, but a very strong improvement of more than EUR 20 million from last year, which is predominantly coming from bank99. Overall, was +5%, I would say good development, in particular, given that last year the results included a positive one-off, a significant one. Let me now proceed with highlighting the most important developments in our core businesses along our well-known strategy framework. Let me start with pillar 1 on page 10, our core Austrian business, mail and parcel.
Addressed letter mail over the last years over the last decade has shown a quite resilient, moderate volume decline. Even during the pandemic, we saw little acceleration over a three-year period. In Q2, we have seen a substantial volume decrease compared to Q2 last year. However, Q2 last year was a very strong addressed letter mail quarter, with then volumes up 6%. Why? Because we had a series of one-off mailings partly related to anti-inflation measures, so-called energy bonus payment, or a letter was distributed to almost all Austrian households and many utilities communicated a series of price increases. These positive, yeah, momentum was not in place in Q2 this year.
Still overall, I think we see a quite resilient addressed letter mail volume. Increasing prices and in particular, forwarding cost increases to our customers is the mandate of the hour and of the last months. We last year implemented significant price increases in our mail business. Roughly 12 months later, we will implement as of September 1. The next big tariff and product reform is 2 elements. One is a significant increase of prices. Overall, I would say in line with inflation across the whole product portfolio. At the same time, we will open up our Economy letter.
So this is the- this is a product with a, uh, with a runtime of two to three days, uh, compared to the priority letter, which has a, uh, a runtime of, uh, of, of one day, so next day delivery throughout Austria. We will open up this, uh, economy letter, where we roughly already today have seventy percent of our volumes, um, even more, in particular, um, for private, uh, letters and, and SME letters that are, uh, that are, um, posted in the, in the mailboxes throughout Austria. So the standard way for, uh, for mailbox letters will now be the, uh, economy product. Uh, as a result, uh, we will see, uh, the percentage of economy letters, uh, further increasing, which will allow us to, uh, optimize, uh, delivery costs in our logistics network.
I think a very important step to safeguard the profitability of our mail segment. Moving to our Direct Mail and Media Post business in Austria, this is currently under pressure, not only from increasing online advertising, also in Austria, still on a relatively low level, but in particular from a weakness of the brick-and-mortar retailers in Austria, be it the furniture sector, where just demand, consumer demand has substantially softened after very strong pandemic years. And on top of that, we see, as I already said, a number of larger retail chains going into insolvency, exiting Austria, closing, shrinking their, their, their retail, their, their, their, their retail chains.
Of course, every customer exiting is a customer who will not give us unaddressed or addressed Direct Mail anymore. As a result, we have seen roughly 10% decline in our Direct Mail volumes this year. Moving to our to the growth element of our business, the parcel business in Austria, here, very positive development in Q2, double-digit growth. We are really now already for the last 12 months, back into a growth mode after a short phase of contraction in the first 6 months of last year. I think we're clearly going, growing above above market here, with new customers that we were able to win, some Chinese volumes that are substantially and quickly growing in Austria.
So, 12% in Q2 and +9% throughout the first 6 months, I think a very promising development. To cope with those increasing volumes, we continue to invest and to finalize. We are now in the period of finalizing our large investment program in Austria. This should be now the last year of really significantly higher CapEx spendings. We still do expect total CapEx spendings north of EUR 160 million for this year. There is, on the one hand, a big project in our biggest Vienna hub approaching the final phase of this project. And this will incur further CapEx spendings in the second half of this year.
On the other hand, we are accelerating our transition to electric fleet with significant a significant amount of costs that we expect in the second half of this year. This explains what's a significant portion of those remaining EUR 100+ million that we will spend in the second half of this year. Next year, we expect a somewhat smaller CapEx spending, given that our investment program in Austria is now coming into its final phase.
Page 15 shows you that with the expansion of our historically biggest hub, the logistic center, Vienna, that we are now at the end of this capacity expansion program of the last 5 years, where we more or less built new or significantly expanded almost every logistic center that we have in Austria. As a result, we'll have a capacity that has almost tripled, and that should serve us well over the coming years. Let me move to page 17. Page 16 shows you a few pictures of the big logistic centers that we finalized or are now finalizing. Page 17 is meant just to remind you that we have a-...
Significant real estate base in Austria, which, you know, I think is a strong element also in our balance sheet, with substantially hidden resource, significant book value of almost EUR 600 million. You see here also on the right side, under the non-operating real estate, a significant hidden reserve, comparing book values with market values of non-operating real estate, of more than EUR 1 billion. We are in, we're constantly in the process of optimizing our portfolio. Over the last years, we acquired and, and built a lot of of real estate. We are at the same time now also looking at our portfolio and, and also starting with focused in divestments.
As an example, we are currently in the advanced process of a tender for divesting our logistics center in Tyrol, where we moved from an owned logistics center to a rented one. Just to remind you, this is also part of our strong balance sheet. Moving to page 18. Page 18 shows you the development of our staff structure in Austria. I think the messages on this chart, one is, we have substantially increased productivity over the last 12 months with 500 less FTEs in the Austrian core business, while our parcel volumes are significantly higher.
Message number two, the transformation from civil servant and all collective labor wage agreements to employees under a new collective wage agreement continues to progress. Of course, absolute numbers are becoming a little bit smaller, but there is still some way to go. This softens a little bit the inflationary pressure that we have in staff costs. Moving now to our strategy pillar number two, growing in new markets. We have seen strong growth over the last six months in our Southeastern European portfolio, volume growth of plus 19%. And in Turkey, as already mentioned, plus 11%. We also have made a little geographic expansion step by making a small acquisition in Azerbaijan.
There are significant parcel flows from Turkey to Azerbaijan. Our Turkish colleagues see an opportunity to expand their footprint here. I think Turkey is we look at Turkey as a bridgehead for some interesting markets adjacent to Turkey. Azerbaijan is one. We're talking about a very small investment here. I think a nice step to grow here outside, out of Turkey. Page 20, coming to our bank. I think here, as I already mentioned, I think a lot of tailwind and good momentum here in our bank, given the interest rate increases of central banks.
Our bank99 was able to substantially expand its net interest margin, and as a result, its, its interest income, more than doubling interest income, that, that has, of course, helped the PNL of the bank. We see a very stable balance sheet and a very stable customer deposit volume. I think here, the strength of postal banks to also serve as a safe harbor for consumer deposits is visible, and I think is an opportunity also going forward. Currently, we, we are focusing on the integration of two core banking systems.
We have now made a final decision on which way to go, which is to rely on Accenture as an outsourcing partner who has bought the core banking system company that helped us to launch bank99. we will migrate the acquired start of bank99, the part that we acquired from ING, 1.5 years ago, to this outsourcing partner over the next 12 months. This will also cost some money, and we will see some, yeah, accelerated depreciation of the proprietary core banking system that we acquired from ING. so there will be some, some burden on the bank PNL, but operationally, I think we are improving from quarter to quarter and showing good progress here. Page 21.
Page 21 shows you the ramp-up of our self-service solutions. We are happy to be able to communicate today that we will make another push in moving to page 22, in further increasing the density of self-service solutions across Austria. We entered into a cooperation with A1, the Austrian telecom incumbent and a long-standing partner of Österreichische Post, where we will use old telephone booth sites as sites for postal stations, where you can receive and also send parcels. That will bring Österreichische Post self-service solutions even closer to the homes of Austrians. Moving to page 23, to the green arrow in the center of our strategy, our aspiration to be a leader in sustainable logistics.
This page shows you the progress that we have made over the last six months compared to the previous year in terms of CO2 footprint, electric fleet, and also some important employee indicators. So, Scope 1, 2, and 3 emissions, so total CO2 emissions along the value chain in our core Austrian business, core Austrian business, line two, down -6.2%. So here we are benefiting from the shift towards electric fleet. Electric fleet increasing from 2,600 to 3,000 vehicles on average in the first six months. This will substantially increase over the next six months, where we expect substantial deliveries of electric vehicles.
Also, in some employee indicators, I would say some progress, but also some challenges. Progress in women in leadership positions, challenges in employee turnover in a tight Austrian labor market. Page 24 reminds you that we are pushing forward quite strongly in photovoltaics, where our target is to produce 30% of electricity that we consume in our Austrian network on our own roofs. Photovoltaic, this would mean a little bit more than 20 megawatt capacity installed on our roofs. By the end of the year, we will have 8 megawatts, and there is a pipeline basically in planning or construction stage, that will almost double this number by the end of next year.
Already then reaching roughly 20% of our electricity demand. On the left side, you see the ramp-up of our electric fleet. Let me now dive deeper a little bit into our core financials. Page 25, I have commented revenue. I think, strong stability in a challenging environment on the EBITDA and EBIT margin level, with almost 15% EBITDA margin and 7.5% EBIT margin. Earnings per share up substantially, given a negative one of last year and a positive one of this year, and cash flow, I think showing the robust cash flow generation capacity of our business. Let me skip our P&L on page 26 and go right away into the divisional developments and financials. Page 27, our Mail division.
You see here the development of, of letter mail, plus 1% revenue over the last 6 months. In Q2, negative development, given the volume development I commented on earlier, where Q2 last year was a very strong quarter. On Direct Mail, you see that we are here suffering a little bit from the weakness of our customers in the retail segment. Page 28, Mail division financials, EUR 77.6 million EBIT contribution. Our mail business remains a strong profit pillar of the group. We see some margin pressure given the cost pressure that we have, but with 10% and some, and in some areas, more inflation, I think, this is still a very respectable result and a very respectable margin.
Moving to our parcel and logistics business, revenues up 9.9%. You see that we see good revenue growth across our portfolio. 9% in, in Austria, 23%, despite the currency deflation, currency devaluation in Turkey, 7% in, in Eastern Europe. Only the logistics solution segment is down on a small absolute level because of the winding down of pandemic-related special services that we provided in particular, COVID test logistics services. Given this positive volume development, as already mentioned, we also, I think, see decent results here in the parcel and logistics division. As expected, lower than last year, where we had this one-off of around EUR 11 million due to the valuation of the-...
of an put option related to Aras Kargo. EUR 11 million one-off, also the loss of the EBIT contribution of the test logistics business. The remaining businesses, I would say, on an operational good path in the challenging environment. Page 31, retail and bank division. Revenue up 41.3%. Majority of this coming from our financial services segment, which is more or less Bank99. Page 32, here you see the strong EBIT improvement in this segment. Still, please, do expect over the next 12-18 months, still some ramp-up losses in our bank, given that we will incur migration costs and also see some accelerated depreciation of assets that we took over from ING.
Page 33, we continue to operate a, I would say, rock-solid balance sheet, with, yeah, a lot of stability. Not much has changed over the last 6 months, apart from the fact that we paid out dividend. Of course, you see a little bit reduction in equity, if you compare it to end of year balance sheet. Over the next 6 months, we will of course, increase the equity position again. Equity ratio, if you adjust for Bank99 of around 28%, rather, still rather low real financial leverage, with a loan volume of EUR 225 million. Low level of intangibles, goodwill and impairment risks, and a stable level of provisions. Our cash flow, page 34, remains robust.
This, of course, continues to be the focus of management to make sure our business remains cash flow generative, despite a move to a more CapEx incentive, CapEx intensive part of business. Let me close on page 35 with our outlook. Basically, we confirm our outlook, as I would say now, with a little bit increased confidence after 6 months already in our books. We, we see a market environment that will remain challenging and where there will be few positive dynamics coming from the market. Despite this, we target a mid-single-digit group revenue growth.
Of course, that will depend a little bit on what the Turkish lira does, going forward, whether it, it has found some, some, some floor now or whether it will further devalue. On the investment side, I already commented that we do expect the total CapEx of around EUR 160 million. There are around EUR 60 million-EUR 80 million being growth CapEx. On the earnings side, our target remains to generate earnings at last year's level. With that said, thank you very much for your attention, and I'm happy to take questions now.
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star, followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using the speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star, followed by one at this time. One moment for the first question, please. The first question is from the line of Amy Lo with UBS. Please go ahead. Ladies and gentlemen, the current participant has dropped from the queue. We will proceed with the next question, which comes from the line of Paul Donofrio from Bank of America. Please go ahead.
Hi, good afternoon. Paul Donofrio from Bank of America. Two questions from our side, please. On guidance, when we look at the outlook slide, the phrase "limited visibility on volume development" is no longer there compared with the Q1 slide. Does that mean your visibility improved since the Q1? Maybe you could talk generally, where the increase in your overall confidence is coming for the full year outlook. Then second question on parcels. Volumes continue to develop strongly. What were the trends you saw through the quarter, and what was the exit rate? Maybe connected to that, how should we think about trends in Q3? I believe last time you said that you expect to see somewhere around single-digit volume increase for the full year. Is that still the right assumption to think of? Thank you.
Yeah. Thank you, Paul. I think, the, the, more confidence in the outlook, I think, just comes from the fact that we have now seen, six months or, we already seven months of development. Accordingly, we have a better visibility for the next five months. You know, we, we know customers are contracted, we have an outlook on, a better outlook on mail volumes. We have a better outlook on parcel volumes. Of course, there is still some remaining uncertainty, but it makes a difference, whether there are five months ahead or, and seven months in your books or, you know, the other way around, yeah.
Second question, I think in terms of parcel, yes, I think we see better volume development in our business than we saw three months ago. I think our, our sales team has won some important new customers. I think we see some big customers who split their volumes, giving us a little bit more volume. We see, as I mentioned, some Chinese customers, where volumes have picked up substantially, which seem to be quite successful with low price products in a, you know, in a market where consumers are, are suffering from inflation.
I think it's this combination where, yeah, we are now looking a little bit more optimistic at, at parcel volumes, and, and given the trends that we have seen, I would say the, the mid-single digit number is probably now a little bit too conservative, yeah.
Great, thank you.
Thank you. The next question comes from the line of Marco Limite from Barclays. Please, go ahead.
Hi, good afternoon, thanks for taking my question. The first question is on your full year outlook, and therefore outlook for the second half. I guess you will have price increases in letters, starting from September, and you will also pay the one-off bonus to all your employees. Just to make sure we have the right numbers, can you just clarify what are the financial impacts from these two, please? My second question is on your non-core, yeah, real estate project that you are you have disclosed today. First question is what is the timing of this particular project you have been talking about? Is that something we should expect to be closed by year-end or into next year?
My second question is on the EUR 17 million you are mentioning as income from the non-core assets. Just wondering if you are able to disclose what is the profitability other than the revenues coming from, from those assets, just in case you will, let's say, get rid or dispose the, the, the whole portfolio. Thank you.
Well, thank you, Marco, Marco, for your questions. I think on, on the outlook, the question around what is the impact of price increases coming from our product and tariff reform, effective September 9? I think, you know, I would say this is on a quarterly level, probably something between EUR 7 and 10 million, depending on the migration, on the speed of migration from the Priority product to the Economy product. And the one-off payments for our employees, I think we're talking here about probably something in the order of magnitude of EUR 15 to 20 million, somewhere, somewhere in the middle, for the next six months. These are, you know, these are two important drivers of profitability in the next six months.
Of course, you know, we, we, we also have some during the year, price increases in other elements of our portfolio on the parcel side. We also have some, you know, one-off burdens now coming on the bank side. I would say that there is also, you know, some potential of one-off contributions from from the sale of non-core real estate. All things together, I think we come to the guidance that we have seen, of course, with, you know, some, some upsides and downsides. Also the impact of the further development of the Turkish lira. Given that the inflation accounting standards always, you know, impacts also already reported figures.
The sum of all these developments with upsides and downsides, has, has, has been the base for our guidance, yeah? On the non-core real estate, I do not-- we do not want to... Hello?
Ladies and gentlemen, we're sorry. The line for the management seems to have disconnected. Please stay with us while we reconnect with the management. ... Ladies and gentlemen, thank you for your patience. We have reconnected with the management. Over to you, sir.
Yeah, thank you. Sorry for the technical issues we've had. I think it was in the middle of answering the question around real estate, so let me repeat. I did not want to raise any expectation that we will divest the larger part of our portfolio, but I think that the two messages I wanted to bring across is, one, there is a strong substance in our balance sheet. Also, we've seen reserves, you know, times may come where we see opportunities. I think that's also an opportunity to raise liquidity. Second, and again, no immediate opportunities that we have in mind.
Second, I think the message is we, we are not only buying and expanding, but we are also continuously optimizing our portfolio on the high real estate, so the logistics center we are in the process of divesting. I think it's rather likely that this will happen this year, rather than next year. That could be a one-off, which I would say is, is already included in our guidance. But, you know, once, once we have the result, we will have more clarity and more transparency, and maybe there is also some small upside if that happens. Yeah.
Okay, thank you. Not sure if you are willing to disclose what is the profitability rather than the revenues, attached to the wider portfolio in case you will dispose most of it. Thank you.
Yeah. Again, there are no, no plans to dispose of it. I think there is a revenue contribution of around EUR 20 million from our non-core, real estate portfolio, and since we are not disclosing profitability.
By the way, we don't want to sell off some kind of portfolio. It's just one or the other building. As you know, from 80% of this portfolio, we don't need. We still get a rental income of about EUR 17 million a year, and that's, that's of course worth having it.
Yeah. Very often we are, we are talking about parts of buildings where, you know, both Post and former, you know, and, and, A1, the Austrian telecom in- incumbent is operating some of their network. So, you know, this comes from the history where both those companies were one company or one institution in the, in the government sector. So it's not always that easy to divest part of this non-core portfolio.
Thank you.
Thank you.
Yes, thank you. The next question comes from the line of Nikolaus Mauder with Kepler Cheuvreux. Please go ahead.
Hi, good afternoon. Thank you for taking my question. The first one is whether you can share some thoughts on the underlying difference in costs between delivering a Priority letter and an Economy letter on a, let's say, all else equal basis. What's the cost saving attached to that? Secondly, I worry that the new price structure in letter mail and the second major consecutive price increase there, will lead to an acceleration of the decline in mail. Finally, I noted that you took out another loan in the Q2. Can you elaborate a bit on your thoughts on sort of the capital structure going forward, and why taking out the loan was necessary? Thank you.
Yeah. Well, thank you for your questions. I think Economy versus Priority, I think it's very hard to, to answer that question on a per, per, per item basis, but, you know, we, we do expect a higher single million digit, from the expansion of the Economy volumes, from 70% to, you know, somewhere close to 90%, over time. You know, this is one further step in a, in a series of steps where we are bundling volumes, on every other day in our last mail mile delivery. You know, we started with unaddressed mail, five, six years ago, you know, bundling that in a, in a so-called, cover envelope and, bundling it on every other day in, in the delivery.
We over time, we, we tried to bundle as much volume on every other day in, in the last mile delivery, which means that on the, on the other day, where we're only delivering priority, that on these days, we touch a lot less households and addresses than on the stronger day. This makes us, this allows us to make the routes with every step a little bit longer and, you know, with more than 10,000 postmen, it, you know, it brings savings and, and the step that we will introduce in fall, you know, will enable us to capture a potential of a higher single million digit figure. Yeah? I hope that gives at least some, some feeling.
Mm-hmm. Yeah.
On, on the question of acceleration of whether the, the price increases are a trigger of volume, of acceleration of volume decline. I think there is. Answer number one is there is always the risk. Over the last years, we have seen very little price elasticity of demand. And, let me remind you that this opening up of the economy product is not only, is not only the target to allow us to save costs in last mile delivery, but also give an alternative, a cheaper alternative to our customers. You know, when speed is, is not necessary for them, the economy product allows them, in some cases, even to save costs, yeah?
The Economy product for the standard size is even after the price increase lower than the Priority product was before the price increase. Still there are some customers who are already in the Economy product and who will experience a significant price increase. Third, the question on the loan, I think we always communicated very consciously that the investment program that we that we engaged on over the last years will require CapEx volumes that will go beyond what we are able to finance out of our yearly cash flows. We will, you know, consciously take that from our balance sheet and, you know, incur an increase of leverage.
The loan we took out is basically a consequence of substantial investments over the last years, investments in real estate and logistic centers, in delivery bases, where we also, you know, built up additional substance in our balance sheet. It's not a surprise.
Okay. Thank you very much.
Thank you. The next question is from the line of Amy Lo with UBS. Please go ahead.
Yes, hi. Sorry about earlier. Can you hear me now?
Yes, you are audible, ma'am. You, you may go ahead.
Yeah. Yeah, my first question is on potential M&A. I appreciate that the Aras Kargo acquisition was relatively small, does this signal an ambition to do more acquisitions in the future? If so, what are the key criteria in assessing the possible M&A opportunities? Secondly, what are your current expectations from Amazon? Do you see any risk of continued expansion on the in-source delivery, or do you now expect to be in a position where you will also benefit from their growth? Lastly, just to follow on from the discussion on price increases in mail, have you received any pushback from maybe regulators on that front, or have they imposed any restrictions on future price increases? Thank you very much.
Yeah. Thank you for your questions, and, and, I have to ask for your understanding that this is the last question, we will be able to answer, because we are running out of time. On the regulator question, you know, we have a, a, I think, a, a regulator which is reviewing our requests always with a lot of due diligence and a lot of rigor. There are two criteria which he uses to judge our requests, which are based on the Austrian Postal Market Act. One is, are they cost-based? Second, do they ensure that postal services remain affordable? I think we have, we, we have, we have a, have had a very good rationale for why these two criteria are in place.
I think the regulator, after reviewing this with a lot of scrutiny, came to the conclusion that the 2 criteria are applying and accordingly approved our request. Second, on Amazon, you know, of course, you know, we do not have insights into Amazon's strategies, but I think for the last 6 months, we are benefiting from growth of Amazon. I think we, we Amazon is remains our biggest and highly valued customer, and at the same time has been expanding its own delivery network in Austria, I would say over the last 12 months, probably with less speed than before. But, you know, we do not have insights into Amazon's plans for the future.
Finally, on M&A, you know, we, as in the past, we, have constantly been looking at potential opportunities within our strategy. We have been very disciplined, you know, in applying our valuation metrics and strategic criteria, be it a, you know, significant strengthening of, of our position in our target markets, significant synergies. As a result, we have, you know, closed many books after looking into, into numbers and, and, you know, not being able to agree on valuations in the past. You know, we have followed through with some deals, be it Aras Kargo or euShipments.com in the past.
As, as in the past, we are constantly looking at, at a small number of opportunities, but there is nothing advanced, which, you know, is worth commenting on out here. With that said, thank you very much. We have to run here.
Thank you very much. Yeah.
Yeah. Thank you, thank you. I've also have to leave to another meeting. If you do have more questions, don't hesitate to call me directly, in the next, the next hour or day. For those of you, who have no questions anymore, thanks for participation in this call. Have a nice number, and see you hopefully soon. Bye-bye.