I would now like to turn the conference over to Harald Hagenauer, Head of Investor Relations. Please go ahead.
Good afternoon, ladies and gentlemen, to this conference call of Austrian Post. Our CFO, Walter Oblin, will give some details on the first quarter 2022 and some details on the outlook. I would like to hand over to Walter directly.
Good afternoon, ladies and gentlemen. Thanks for the opportunity to present to you our results for Q1. Let me start right away on page three, which provides the well-known overview of the key financials of the company and the three business segments in which we operate and report our mail business, predominant in Austria, our parcel and logistics business, a portfolio of parcel networks in nine geographies, with Austria and Turkey being the two largest geographies. The third segment, retail and banks, comprising our branch network and our recently started bank99. Q1 revenue was EUR 601.4 million. Moving to page four, which gives you a little bit of market context.
I think the summary is we have been operating since the start of the year in a very challenging market environment with several headwinds. Number one, a consolidation of parcel volumes, in particular in Austria, but also in some other geographies, after a record year, 2021, where in particular in Q1, we had positive effects from a longer lockdown in Austria and also in other markets. Number two, an adverse public sentiment having negative impact on public consumption and e-commerce volumes. Number three, given our exposure to the Turkish lira with our subsidiary, Aras Kargo, the strong decline of the Turkish lira, in particular in Q4 last year. Number four, a strong inflation, energy costs, staff costs, and basically across all categories.
On top of that, we had still a quarter where operationally we were challenged by the Omicron wave with 1,000 people at the peak of the wave not being present in the company causing additional costs. Overall, a quite adverse environment. This environment is reflected in the financials. Moving to page five of Q1, revenue for the whole group was down 7.1%. The biggest impact was the decline of the Turkish lira. Without Turkey, the revenue decline would have been 2.4%. I'll come to the detailed breakdown of revenues later on.
On the EBIT side, the combination of declining revenues and increasing inflation had an impact, of course, also with EBIT down roughly 1/3 with an EBIT margin of 6.6% in Q1. Of course, we reacted with a comprehensive set of countermeasures as soon as those adverse trends became clear over the last months. I'll later comment on some of those countermeasures. It's a combination of countermeasures on the revenue side, where, of course, we try to forward cost increases to our customers by inflation adjustments. We have reviewed our project and investment portfolio.
Of course, we have undertaken several measures on the operational and cost side to adjust for lower volumes and also to squeeze out further cost reductions. As a result, we have given an outlook two weeks ago, where on the revenue side, we see a target of stable revenues as a realistic scenario, and where we guided for an EBIT for the full year in the bandwidth of the EBIT of last year and the year before. Numbers in EBIT between EUR 160 million and EUR 205 million. Let me proceed with an overview of revenue development in Q1.
As I said, group revenue down 7.1%, 2.4% in the portfolio, excluding Turkey. This was the result of a relatively stable mail business. Of course, we continue to see a structural decline, however, with -4%. I think it's still a moderate and stable decline. Most of the revenue decline came from the parcel and logistics segment. Here again, most of it came from the depreciation of the Turkish lira. 12.5% for the whole business segment and 3.4% excluding our Turkish subsidiary.
The retail and bank segment showed a growth of almost 50%, due to the first time full consolidation of the acquired retail business of ING Austria in our bank99. Moving to page seven, which shows you the EBIT development compared to the previous year. Last year, almost EUR 60 million, with two core divisions both suffered from the adverse trends. Mail relatively stable, with EUR -4.4 million. Parcel and logistics after a very strong Q1 EBIT last year, down EUR 18.4 million. Again here, the majority of this EUR 18.4 million coming from the Turkish lira depreciation. Retail and bank up EUR 7.7 million and corporate down EUR -5.1 million.
In both segments we had one-offs last year, so I would say operationally we were pretty much stable in both segments. Let me proceed with some highlights in terms of implementing our strategy and giving you an update on our core business lines. This slide summarizes our strategy framework. I think most of you are aware of that. Three business priorities. Priority one, market leadership and profitability in the core Austrian business. Priority number two, profitable growth in near markets, both geographically near markets as well as markets adjacent in our value chain. Priority three to further expand our retail and digital offering for consumers and SME. As an overarching priority, the green arrow in the middle, a strong focus on sustainability, diversity and customer orientation.
Moving along those four strategic cornerstones, I can start with our core letter mail business. The long term trend over the last years was a volume decline of around 5%. This, with the business upheld well during the pandemic, was only a slight increase in volume decline despite the biggest accelerator in digitization. I'm referring to the pandemic. This, I would say, relatively resilient and stable structural decline continued into Q1 with -4% core volume decline. I think we continue to show a stable and profitable addressed letter mail business, where we all the time also find opportunities in terms of last year distribution of masks.
Currently we distribute vouchers for the government to compensate for energy cost increases, and opportunities continue to come up. Of course, given the inflationary drivers across our costs, we have a responsibility also to work on prices, as we haven't had a major tariff change since April 1, 2020. We have decided to raise postal rates for two product categories, the economy letter and the economy business letter. We're talking about roughly a 1/3 of letter mail revenues here. Is it less than a 1/3? You see the changes in tariffs. We think given the inflation and cost increases around us, this is still a moderate price increase. However, it will make a contribution to stabilizing margins in our mail business.
With those tariff increases, we remain one of the cheapest mail markets. We believe this combination of high quality and moderate prices has also been a contributor to only a moderate decline of mail volumes in Austria. Moving to page 12, our direct mail and Media Post business. Here, a positive development in Q1. We've seen a recovery from depressed volumes in Q1 last year, + 10% volume. This is mostly unaddressed direct mail. Addressed direct mail is still a little bit under pressure. Of course, this business also continues to be structurally declining. Currently we are a little bit concerned about paper prices and availability of paper for our customers.
So far this hasn't had a strong negative impact, but this would probably be the case in current case of a further escalation on the question of gas availability or on the question of availability in particular of Russian gas for Austria. Moving to page 13 to our parcel business. You see here the strong growth over the last decade. In particular, see here the strong growth over the last two years against this strong expansion in the last two years. In particular in the first quarter of the last two years, we saw now a decline of 9%. This is the result of the absence of lockdowns which contributed to the strong volumes last year.
An expansion of own delivery volumes of our largest customer in Austria and of a subdued e-commerce and retail market in general. Over the last month, however, we have seen volumes approaching already last year's levels, so we are confident that this trend will reverse over the course of the year. As we believe in a further mid- to long-term growing parcel business, we continue to invest in capacity expansion and sustainability transformation across our network. As a result, we expect to spend roughly EUR 180 million on CapEx this year. Where does this CapEx primarily go?
Page 15, it goes into the final phase of the expansion and modernization of our core logistics infrastructure for the parcel volumes for the parcel business in Austria. You see that over the last, roughly four to five years, we have touched pretty much every sorting center, and until today, pretty much tripled our sorting capacity. There are currently two bigger projects still on the way. One is the expansion of our logistics center in Upper Austria, providing substantially more capacity for the most important injection point from Germany, and the refurbishment and expansion of our oldest and still most important logistics center in the east, in the eastern region, in the area of Vienna.
The logistics center Vienna, we started this expansion phase earlier this year, and this will be, I think, for the near future, probably the last major project. Of course, there will be smaller projects, depending on volume trends going forward. Moving to page 16, our staff transformation continues to advance. You see the particular transformation from expensive civil servant contracts and contracts under an old collective wage agreement to employees under a new collective wage agreement with substantially lower cost per productive hour continues, absolute headcount pretty much stable given the volume development. I think this picture will probably continue for the remainder of the year.
Page 17, now moving to strategy pillar number two. Number two, profitable growth in new markets. This chart shows our regional portfolio, our parcel networks in Eastern Europe have benefited strongly in the pandemic, has developed well, shown good growth, good margin development, all companies being profitable, and this has continued into Q1. Page 18, I think the most important development outside Austria has, of course, been the development in the Turkish market. There, we have continued to grow in local currency. However, both in terms of volumes as well as in terms, in particular in terms of currency, in terms of FX translation, we have seen adverse trends also there.
On the volume side, of course, we come from strong Q1s in 2020 and even more in 2021. I think as you are aware, the Turkish lira has strongly depreciated given the high inflation in Q4. As a result, in euro terms, both revenues and EBITs have declined substantially. Let me skip page 19 and move to page 20. Moving to our third strategy pillar, our retail developments in the retail sector and the retail and bank segment. We closed December last year the transaction to acquire the retail business of ING Austria.
We continue to grow, and I think with this acquisition, we have now a bank, a small focused retail bank, with bank99, 245,000 customers, a balance sheet of EUR 2.9 billion, EUR 1.4 billion credit volumes, both mortgage and consumer loans. Currently, this will keep us busy for 2020 and probably also for the first half year of 2023. We are busy integrating the two banks, merging the product portfolios, merging two organizations, merging the customer portfolios and the product portfolios.
The technical migration is, of course, the most challenging part, but we have completed important milestones already over the last six months and have a challenging time ahead of us here. Moving to page 21, which shows you the development of our self-service zones. We continue to invest in those solutions as we believe they are the most efficient way to serve customers and also the most convenient provide the most convenient service to our customers for sending parcels and for receiving parcels in case our customers are not at home. Of course, the overall volume trends have also had an impact on the volumes handled in our self-service solutions. On top of course, the seasonality. Page 23, a brief update on our efforts in the sustainability area.
I think you are aware of the targets we committed to, science-based targets, with a clear roadmap towards net zero by 2040 and an ambitious target to reduce our CO2 footprint by 2030. I think the most important initiative is to become CO2 free in the last mile in Austria by 2030. I think you're aware that since 2011 we offer our customers a CO2 neutral delivery of mail and parcel in Austria. The step from CO2 neutral to CO2 free means that we will eliminate all combustion engines in the last mile by 2030.
We have successfully completed a pilot in the second-largest Austrian city, Graz, where we today already deliver 100% of all mail and parcels without combustion engines, so CO2 free, either by pedestrians, e-bikes or electric vans and transporters. On top of that, there are a variety of other initiatives. With that, let me now move to the third part of the presentation and provide some more details about our group results. Page 25 shows you the overview of our key financial indicators. Revenue, EUR 601 million, down 7% as already commented. EBITDA margins and EBIT margins, I think, given the adverse environment, on a decent level, however, substantially below last year.
The cash flow, I think, shows that our business continues to be generating cash as a basis for our dividend value proposition. Let me maybe also skip page 26 and move to the business segments right away. Page 27, starting with our mail division. Revenue in the letter mail and business solutions segment down -8%. As I said, the core volume trend was -4% shows a stable, of course, structurally declining, however, moderately declining core addressed letter mail business. Why is revenue decline higher than the 4%? Last year, we distributed masks for the government to more than 1 million senior consumers in the Austrian population.
This was one positive one-off, and there were two, three other mailings related to the pandemic, which explain at least part of this difference. On the direct mail and media side, here you see the revenue equivalent to the volume to the positive volume development I mentioned earlier, 5.5% +. This is in particular a recovery from a lockdown-dominated Q1 last year. Based on those revenue trends, a relatively stable, however, of course, given the overall environment also, and the combination of volume declines and cost increases, I think still a quite robust profit in the mail division was EUR 41 million after EUR 45.5 million last year, and an EBIT margin of 13.7%.
Moving to our parcel business on page 29 here, -12.5%. This is the result of -7% volume revenue decline in Austria, mostly volume-driven, -39.1% revenue decline in euro terms of our Turkish parcel business, mostly coming from the currency development and growing revenues both in the CEP parcel portfolio as well as in our logistics solution business. In total, as I already said, -4.5%. However, without the Turkish development, the revenue decline of -3.4%.
As a result, of course, the very high profit in Q1 last year could not be reached. EUR 17.4 million this year with a margin of 6.2% was the result for Q1. As I said in the beginning, also Omicron weighed on our results as we had to provide additional staff to cover for, at the peak, 1,000 people being quarantined due to COVID-19. Page 31, our retail and bank division showed growth in Q1 of 50%. Of course on a relatively small absolute level, EUR 26.4 million after EUR 17.7 million. This is mostly coming from interest income and provision income resulting from the acquisition of ING's Austrian retail business.
Page 32, profit in the retail and banks division recovering from EUR 18.4 million last year to roughly EUR 11 million this year. Last year, there was also a - 1 million also included. If you take that out, I think we can talk about the stable operational development. The results in Q1 and also over the next quarters will be impacted also by the migration costs of merging two banks into IT systems. Page 33 gives you an update on our balance sheet. I think compared to the annual accounts, 2021, little change. We continue to operate a conservative balance sheet with a strong equity ratio, a conservative provisioning, low level of intangibles. The total balance sheet has grown.
Total assets have grown, particularly given the development and slight growth in our banking balance sheet. Page 34 gives you an update on cash flow in Q1. I would ask you to focus the attention on the column in the middle, what we call operating free cash flow. This is the free cash flow from operations, excluding any impact from the banking operations, and before growth CapEx, was EUR 72.1 million in the first quarter. I think we show here a quite strong cash flow generation, almost at the level of last year. Of course, this is always a little bit running behind the operators EBIT development, even after growth CapEx, still EUR 61 million in free cash flow.
I think we are confident that we will generate a robust cash flow also for the full year as a basis for, again, an attractive dividend, of course, dependent on our earnings. With that said, I'm closing with page 36 with the outlook we provided four weeks ago. We will continue to face an adverse and challenging market environment for the full year, with inflation on the one hand, depressed consumer sentiment and e-commerce volumes, as a second driver, absence of positive special effects for the parcel and logistics business compared to 2021. Despite these adverse conditions, we have a target of revenues that should come close to the EUR 2.5 billion of revenues last year.
We do expect mail to continue its moderate structural decline, partly compensated by the already mentioned price increases. On the parcel side, we do expect the volumes in comparison to last year, the volume trends to improve over the course of the year, and for the full year at least expect some stable, I would say stability in volumes in Austria and CEE. The development in Turkey will of course depend highly on the macroeconomic development in Turkey, and in particular on the exchange rate. I already mentioned that we will have one more year of high CapEx volumes, with a total CapEx volume of around EUR 180 million.
Order of magnitude of around 100 million maintenance CapEx and roughly 80 million in growth CapEx. Most of that resulting from two large sorting center expansion projects, as mentioned. On the earnings side, we guided our EBIT, as already mentioned in the summary up front. We guide our EBIT to, assuming a relatively stable macroeconomic environment without further escalation of the Ukraine crisis. We expect our EBIT to end somewhere in the range between 2020 and 2021, which in absolute numbers is the bandwidth of EUR 164 million-EUR 165 million. Of course, the ambition of the management is to get close to the level of 2021. Thank you for your attention, and I'm happy to take questions.
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're using 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 a line of Sathish Sivakumar from Bank of America. Please go ahead.
Good afternoon. Thank you for the presentation. Just three questions from my side. Firstly, on Austrian parcel volumes, roughly how much of the decline in parcel volumes in Q1 would constrain consumer sentiment versus last year's pandemic impact? You mentioned that you expect stable Austrian volumes for the full year. Does this mean that you expect volumes to be up year-over-year in the second half? Then on the sort of 19% decline in Turkish volumes, how much of this was actually from weaker consumption in Turkey? I can see in the chart that you also expect stable Turkish volumes in 2022. Can you explain why, sort of given higher inflation and weaker consumer sentiment? Second, your mail.
How much do you expect the July mail price increase to offset your sort of base case for volume declines this year? I understand these only account for about a 1/3 of mail products. My final question actually is on your dividend policy. Are you still committed to a 75% payout ratio? Is the ratio likely to be lower than last year's given higher CapEx and potentially lower earnings? Thank you.
Thank you for your questions. Let me answer the questions in the opposite direction as asked. Start with the last question on the dividend policy. I think the answer is it's too early for any dividend guidance, but our dividend policy is unchanged. We continue to have a dividend policy where we commit to pay out at least 75% of net earnings. I think we also made transparent we highlighted the dividend payout ratio in percent of net earnings when we communicated our dividends is at a payout ratio of around 85%-90%. I would say there is currently no plan to deviate substantially from this level of payout. Again, I think it's too early.
Be assured, you know, being a reliable dividend stock is at the core of our value proposition to investors. I think there was a set of questions on mail volume. I think, if I understood the question rightly, was kind of to what extent will this offset volume decline? I think that the revenue that is underlying is roughly a little bit below EUR 250 million. We talk about a tariff change in the high single-digit figures. Over the half year, this tariff will be included in our P&L. I think you can expect a positive support of around EUR 10 million.
If the question was around do we expect further trigger of volume decline? I'm not sure if that was the question, but if it was the question, I think of course any price increase is a trigger for reviewing mail volumes on the side of our customers. We do not expect a substantial acceleration of mail volume decline through this price increase. We believe that most of our customers are working anyway on digitization efforts and that this tariff change will not materially change their digitization efforts. You know, many volumes are also tied to regulatory requirements, and we don't see any change there. I think then there was a question on our Turkish business.
I'm not aware of a guidance of stable volumes for Turkey. I think we have to make one thing clear. We continue to have a profitable Turkish business, which continues to be profitable above industry averages, however, less profitable than in a record last year. Also in Turkey, we had positive impact from COVID. I think the core question going forward for the full year is the development of inflation and government measures on minimum wages and resulting consumer sentiment and purchasing power of Turkish consumers. But I think we have to be aware that the conditions in Turkey will be substantially more challenging than last year.
On parcel volumes, I think it's very difficult, to be honest, to single out the corona extra volumes. I would say there is, of course, you know, out of the 8%-9% of volume decline that we've seen in Austria, probably a substantial part of the loss is due to COVID one-off volumes. I'm not sure if there was another question on that. If I've forgotten it, I would ask it too.
Yeah. Just on the Austrian volumes, you sort of mentioned that you expect them to be broadly stable for the full year. Does this mean that you expect volumes to be up year on year in the second half in Austria?
Yeah. Mathematically, this is the right conclusion, yeah.
Thank you.
Yeah. Just on the
Sorry.
I wanted to add, we have already seen month-over-month an improvement of volumes compared to last year. This positive one-off of lockdown volumes pretty much was a January, February effect last year. There were no further stores closed in Austria for the rest of the year. Actually no, there were three weeks in December. So there we might see some impact, but that was three weeks. So overall we are confident that compared to last year, there will be an improvement over the last weeks and months, over the coming weeks and months.
Thank you. That's helpful. Yeah, just wanted to point out on the Turkish volume, I just saw in your chart on slide 18 that you have a sort of outline for an estimate in 2022 that's roughly looks the same as 2021. That's what I interpreted as the volume guidance.
No, that's not really a guidance. The case is true for Austria, but I think we have a bit more question marks in Turkey, of course, on the volume side. We see some help from the price side coming in front of us, but we don't want to give a guidance right now on the volume side in Turkey.
Okay. That's clear. Thank you.
The next question is from the line of Ivar Billfalk-Kelly from UBS. Please go ahead.
Good afternoon, gentlemen. Thank you for taking my question. If I start with your CapEx outlook, I mean, you haven't made any changes to this year or next by the looks of things and even in years beyond. Some of your peers are talking about reducing their CapEx spends in line with reducing parcel volumes. Is there a scenario where you might actually be able to reduce the spend on your CapEx if volumes were to decline? Secondly, your balance sheet remains very strong despite the ongoing concerns that in the context of effectively falling share prices and falling values across the board, is there any scope for you to pursue M&A to increase your footprint within the faster-growing segments within Central and Southern Europe?
Lastly, in the context of your parcel volumes, are you seeing any incremental losses to Amazon, or has that stabilized at this point? To the best of your knowledge, are there any plans for Amazon to expand their footprint further within Austria? Thank you.
On parcel volumes, Amazon continues to build out its network, its own delivery network across Austria. There are plans also communicated by Amazon to add further urban regions over the next years. This is included in our plans and is also part of the volume reduction that we've seen in Q1. On M&A, I think we continue to look out for both on acquisitions that add value to our portfolio. However, we continue to be very disciplined. The premiums that were paid in recent years led us, in most cases, to the conclusion that we are not willing to pay those premiums.
If valuations come down, then maybe some opportunities come up, but we will continue to be disciplined. On CapEx, I think most of the CapEx for this year was already predetermined by projects that we decided on and contracted last year. We believe these are the right investments for securing and defending our market leadership position in the Austrian parcel market going forward. You know, we have seen very volatile development of volumes over the last, I would say 10, 12 quarters. If we change our investment strategy every quarter, I think we would not do the right thing.
Of course, we will be more careful in deciding on future projects as long as we don't have a clear view on how volumes will develop going forward.
Understood. Thank you very much.
The next question is from the line of Bernd Maurer from Raiffeisen Bank International. Please go ahead.
Hello, good afternoon. Not much left. A couple of things I wanted to ask have already been commented on in the conference call. Only one thing to letter mail pricing. It now was announced the increase of eco tariffs as of July. Mr. Oblin stated about EUR 20 million annual revenue effect. Can you comment on current talks about priority tariffs, universal service obligation, what to expect here? If not, that's it. Thank you.
Thank you for that question. I think the answer, the specific answer is no, we cannot comment. I think that the general answer is we're looking at ways to forward cost increases to our customers in every business, in every product line, be it in the parcel business, where we have direct contracts with large and smaller customers. We have, in particular on the parcel side, a so-called diesel floater clause in most of our contracts, where we are pretty much hedged on the diesel side. I think that's probably also helpful to know if you look at our parcel business.
On the mail side, of course, you know, with the cost development that we have, and with the inflation that we have, there is on the one side the need for further price increases along the way. With increasing inflation, also increasing degrees of freedom. I think most of you are aware that our regulatory regime basically has the consumer price inflation as a ceiling across product groups in the regulated portfolio, as a ceiling for price increases. With higher inflation, we have more degrees of freedom with every month and every quarter that passes. There are no specific things we can talk about.
As always, we have first to go to the regulator, and then we just get approval from our regulator on a price increase. I think in general, we are reviewing all products and we'll make steps when they are possible, when we think we can implement them in the market, and we communicate once we have made decisions and got regulatory approval.
Fair enough. Okay.
The next question is from the line of Andre Mulder from Kepler Cheuvreux. Please go ahead.
Yeah, good afternoon. A Q and A question on your outlook, especially on the sales side. If I look at the sheet showing the actual trends, I see some negative numbers for the consumer part. Wouldn't you expect that to have an effect on your sales level in parcels? Shouldn't you be a bit more, let's say, negative looking at these numbers?
You mean the consumer sentiment on page four, so?
That's right.
Yes. I mean, of course, we are in an uncertain and challenging market environment. Given what we have in our sales pipeline, given the focus we get from our customers, the guidance that we've given is the one that we currently see as a realistic one. However, the uncertainty is higher than usual, and the visibility is lower. With that said, that's what we currently believe in.
Okay. In Q1, your volumes declined 9% in Austria. Can you single out the Amazon effect?
Well, I earlier got the question to single out the COVID-19 effect, and I said it's hard to quantify that. I think that the 9% is a combination of Amazon, COVID, and lockdown, and it's very hard to single out the precise impact of those three elements.
Okay. Last question. You mentioned the parcel volumes for Austria and also for Turkey. I'm looking for the volumes for Eastern Europe as well. Do you have them?
Just give me one second. I think we have given an indication here on the relevant page.
You mean volumes for Eastern Europe in the last quarter, yes?
Yep. That's right.
It was slightly up by about 3%.
Mm-hmm. Yeah, I've seen the delta, but I'm lacking the numbers, so.
Yep. Around 3% is the number. Parcel volume CEP. It's mentioned here. 29.3% less. Yeah, I was looking for the absolute number there, but. Absolute number. I can send you an email later on. Yep, that's fine. Thank you.
Our next question is from the line of Marco Limite from Barclays. Please go ahead.
Hi, good afternoon, and thanks for taking my question. My first question is on your guidance. You are clearly kind of giving us a pretty wide range for EBIT. I just wanted to understand, if you know, at this point in time, which are your best case assumptions for the Turkish business. Am I correct in saying that, you know, the upper end of the guidance reflects an improvement in the FX for Turkey while the lower end of the guidance reflects, you know, the churn rate or the current condition from a macro perspective and FX perspective also into the rest of the year.
Just trying to understand what's your kind of base case for the FX for the Turkish lira. The second question is on your own cost base. I think you are currently under discussion with unions. There will be wage increase on the first of July, if I'm not wrong. If you can give us any update on that. Still on the cost base. Some of the other postal operators have flagged some one-off payments or one-off compensation to the logistics partners to compensate them for the extra fuel costs. Can you tell us if you've seen anything like that, if you had to pay one-off payment to your logistics partners? Thank you.
Yeah. Let me start with the last question. Yes, of course, our trucking partners, particularly our trucking partners, are regularly coming to our procurement department and asking for price increases. I think we typically also have some kind of diesel floater regime where we basically compensate them for increasing or then also benefit from decreasing diesel prices. We have not. I cannot say whether we have had any demands, but I think I can say with certainty that we have not chosen one-time payments for our trucking partners to compensate them. I think that was one question. I think the second question was the assumption on the Turkish lira for the business.
I think we are assuming here is a further, however moderate decline of around 20%-25% of the Turkish lira until year-end. Of course, nobody knows whether that is a realistic assumption. We will know later on during the year. The other assumption is that our Turkish business continues to be profitable, and as I said, it has been decently profitable in Q1. And also the latest figures we've seen from them are encouraging in that direction. There was a third question, which was on staff costs. You're right, we concluded our yearly wage negotiations with the postal union end of April with an increase of 4%, effective July 1st.
Basically, you can apply that on roughly a staff cost base of about EUR 1 billion. For the full year, this means roughly EUR 20 million additional staff costs. Of course, we have some compensating counter effect from the transformation of civil servants and employees under the old collective wage agreement to new collective wage agreement. That's the order of magnitude, if that was your question.
Very clear. Thank you.
There are no further questions at this time. I hand back to Harald Hagenauer for closing comments.
Once again, thanks for participating in this conference call, ladies and gentlemen. If you have further questions, don't hesitate to call us the next day. We are, of course, available and hope to see you in person in a couple of weeks or month. Bye-bye.
Ladies and gentlemen, the conference is now concluded. You may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.