Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome, and thank you for joining the Full- Year Results Call of the year 2023. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may do so by pressing star and one. Press the star key followed by zero for operator assistance. It's my pleasure to turn the conference over to Harald Hagenauer, Head of Investor Relations. Please go ahead, sir.
Good afternoon, ladies and gentlemen. Welcome to this conference call of Austrian Post, where we would like to discuss the facts and figures of the fourth quarter and so the full results of our company. Here with me is our Chief, Walter Oblin, and I would like to directly hand over to you, Walter, to our conference.
Good afternoon, ladies and gentlemen. It's a pleasure to have the opportunity to provide to you our results for the full year 2023. I think as a summary upfront, we are pleased to say that in a very challenging environment, I think we can present today very solid results for the full year 2023, as well as a confident outlook for the year 2024. Let me start on page two. Page two shows you the overview of our three segments in which we operate, in which we report: our Austrian Mail business, our International Parcel & Logistics business, and our, again, Austrian Retail & Bank segment, which includes our bank99 Parcel & Logistics for the first time with a revenue share clearly above 50%, total group revenues EUR 2.74 billion, and group EBIT EUR 198 million. Page three, a short summary of the environment in which we're operating: a stagflationary environment.
I think the first key point with still high inflation, even if it's coming down, in Austria and in most of the markets we operate in, combined with negative GDP growth last year, -0.7%, and a small GDP growth forecast for this year. Point two, our most important customer segment, the Retail segment, the stationary retailers or online retailers, are in a difficult environment. In particular, the stationary retailers are in a consolidation environment with a number of exits, insolvencies, and this has had impact on our customer portfolio. In point three, our second biggest market after Austria is Turkey. And in Turkey, we are faced with an environment of still very high inflation and a very volatile and over time deteriorating currency. Page four, in this environment, we, as I already said, delivered, I think, very good, very solid results.
On a group level, we can report a revenue increase of 8.7%, a stable EBIT, a small increase by 1%, absolute figures EUR 2.74 billion revenues, EUR 190 million EBIT. This is the sum of a Mail business where we have seen somewhat accelerating decline in volumes, combined with significant tariff increases that result in a relatively moderate revenue decline. Strong growth in Parcel & Logistics across the portfolio, in particular in Turkey, also supported by high inflation with a relatively favorable currency development and also good growth in the third segment, Retail & Bank, where we are benefiting from tailwinds from the interest rate environment. Page five shows you the detailed revenue development by segment, Mail segment - 2.3% for the full year in Q4 - 2.2%. As I said, this is the combination of a little bit stronger than in the past declining mail volumes.
We're also comparing ourselves with we come to that with a very good year, 2022, in Mail, the combination of declining volumes with compensating price measures. In Parcel & Logistics, very good growth, 16.6%. Even if we take out Turkey, it's double-digit growth, a little bit above 10%. In Q4, even same number for the group, a little bit stronger, excluding Turkey. And the segment Retail & Bank with a revenue growth of 37.6%. Page six, the intention of these pages is to remind you that the combination of the high inflation environment with a currency that is devaluing against the euro, however, not linear, but in a very volatile way. And on top of that, the application of the high inflation accounting standard, hyperinflation accounting standard, means that we report quite volatile revenue figures and revenue increases from Turkey.
Just looking at the yellow bubbles here, 66% in the first quarter, -14.5% in the second quarter, 80% in the third quarter, and 30% in Q4. Hyperinflation accounting means that we basically apply always the end-of-the-quarter currency exchange rate for the full year behind us. This leads to more or less a kind of a restatement of the already reported revenues in prior quarters and therefore to substantial volatility. Just if you want to interpret quarterly figures, be aware of that. Coming to EBIT development, page seven shows you our group EBIT. As already mentioned, increase of 1%. We see some margin pressure in our core logistics segments, Mail and Parcel. Mail down EUR -5 million, however, still very strong absolute profitability with EUR 152 million. Parcel & Logistics, a strong second pillar in the meantime with almost EUR 90 million. EBIT contribution, small growth compared to last year.
If you adjust for one-offs, the operating increase is substantially bigger than that. Retail & Bank , here we're still in a ramp-up loss phase in bank99. However, we were able to roughly half ramp-up losses and make a significant step towards break-even. And that combined with the usual bandwidth of EUR 35 million-EUR 40 million in Corporate delivers a total of EUR 190 million. Q4, EBIT contribution reported a little bit down compared to 2022. However, we have had some positive one-offs in 2022, some negative one-offs in 2023. So on an adjusted operational EBIT level, we would see a positive development from 2022 - 2023. Page eight, let me now go a little bit into the details of our business lines using our strategy framework as a structuring element. Let me briefly summarize the four elements.
Element one, depending on our market leadership and profitability in the core business, meaning Austrian Mail and Parcel. Element two, profitable growth in new markets, in particular parcel internationally. Element three, development of retail and digital offerings for the consumer and SME market. This is about our retail network and about bank99. The green arrow in the middle is our aspiration to be a leader in sustainable logistics. Starting with element 1 of our strategy, our core business, Mail and parcel. As I already mentioned, Mail has seen a decline last year that was a little bit above around 5% we've seen the years before. Mail is declining in Austria since 2008. So we're in the 15th or 16th year of Mail decline. I think we've shown that we can work with a Mail decline in the order of magnitude of somewhere 4%-6%.
You have to read those 6% compared with the decline in 2022, which was lower than average. 2022 was a year where we had a number of special mailings, including price increases by utilities, government measures to fight inflation, and so on. Still, 6% is 6%. Accordingly, we've seen a decline in Mail revenues and also a small decline in profitability. However, I would say still a very strong business in terms of both revenue stability and margins. Page 10, our strategy continues to be to offer good quality at moderate rates. We have been increasing rates quite substantially in the last two years, basically more or less in line with inflation, always combined with product measures where we try to move more and more volumes into a slower stream, which is more or less the Economy Letter. A product is also delivery time promise of three days.
And in the meantime, we have around 80% in this product. The latest important step was a product price adjustment effective September 1st, where we more or less opened the Economy Letter for the consumer segment, and the whole letterbox stream was shifted to economy. Page 11, moving to our Direct Mail and Media Post business, still a substantial business with EUR 420 million in revenues. This has been particularly under pressure given the prices of the stationery retailers. And further challenges came from substantially increased energy and paper prices for our business customers in this field. We saw here decline rates of around 9%, quite substantially, a number of exits. I think we're not 100% through yet through the consolidation of our retailers. And we see customers continuing to shift from print advertising to digital advertising.
Page 12, moving to the growing part of our business, the Austrian parcel business, we reached a threshold of 200 million parcels last year, a growth of 11%. I think very good growth in a market that has grown more in the mid-single-digit figures. I think very good quality, very good convenience for consumers, self-service solutions, and all that combined with a very competitive cost structure and a very competitive pricing has added to our success in the marketplace. As a result, page 13, the latest market share statistics also show that we have gained some market share around 2%. The market continues to be competitive, Amazon now being number two in the B2C market. At the same time, Amazon continues to be a very important customer for us.
Page 14, we continue to invest in growth in the green transformation for logistics and also substantially in renewing all the equipment we have in place, what's called maintenance CapEx. Last year, around EUR 155 million CapEx cash spending. For this year and next year, we expect CapEx to come down a little bit as we have more or less completed our substantial expansion program in Austria, moving to page 15, where we basically built new or substantially expanded almost every logistics center in Austria. The last step was completed in fall last year, the new logistics center in the south of Vienna, extending our existing and most important Vienna logistics center. Moving to page 16, our staff structure, the staff transformation continues, a transformation from civil servant and labor agreements in the old what we call old collective wage agreement, which is for new entrants until 2009.
We're now here also in year 15 of the new collective wage agreement. In the meantime, majority of employees, more than 10,000 people, are in this new collective wage agreement. This is a substantially cheaper, potentially less expensive collective wage agreement. And as a result, this transformation helps us to offset some of the sector cost increases, which, of course, have been high given the high inflation we're seeing in Austria. Page 17, moving to now strategy pillar number two, growth in new markets. Moving to our international parcel portfolio, we are present in more than 10 geographies, covering southeastern Europe and, of course, Turkey, our second biggest market after Austria. And since last year, also Azerbaijan, a successful start into Azerbaijan. Turkey, including Azerbaijan, good growth of 8% for parcels and 4% shipments in total. We also have a certain document stream within our cargo, which is not growing.
But overall, very good development in Turkey, both revenue-wise, profit margins above group average, good development also in Eastern Europe, where our revenues in the meantime have come close to EUR 200 million. Page 18 shows a little bit more details on the development in Turkey. Very strong growth in Turkish lira, 130%, given some imbalance between inflation and the currency exchange rate. Also, quite strong growth in euro terms, +41%, as I said, with hyperinflation accounting and with a substantial currency devaluation, which typically doesn't happen in a linear way. We've seen a quite strong downward push last year in Q2. At any time, some volatility and some downward push can happen, which then has given hyperinflation accounting impact on all the accumulated revenues for a given year. But overall, very positive development in Turkey. Moving now to strategy pillar number three, our consumer trust.
Here, bank99 is the most significant investment and the most significant growth push that we've made over the last years. I would say overall positive development, of course, also supported by tailwind from the interest rate environment. We are growing our customer base, 280,000 in the meantime. We are growing our balance sheets, EUR 3.4 billion. In a difficult credit market, also the credit volume has grown from EUR 1.6 billion- EUR 1.8 billion. And most importantly, our net interest income has more than doubled last year. Of course, we are benefiting here from the interest rate environment. And with interest rates going down, we'll also see probably some compression of interest margins.
Current focus is on harmonizing two IT systems, moving the customer base from the proprietary IT system that we took over with the acquisition of the ING retail business in Austria, migrating those customers to the original bank99 outsourced core banking system, which is now managed by Accenture. This is a big, very comprehensive program where we are in the midst of it and where we do expect this migration to happen by the end of this year. At the same time, we are launching new products and trying to push also growth in various customer and product segments. Still, however, we are here in a ramp-up loss situation. We have roughly half the ramp-up losses included in those numbers are significant migration costs for the harmonization of the two IT systems, including some write-downs. If we would adjust for those, we are already approaching break-even, however, not yet there.
Moving to page 20, self-service solutions, parcel locker are growing not only in terms of numbers but also in terms of consumer usage. Last year, 27.3 million parcels handled through self-service solutions, about 16%, so above our parcel growth. We are at the beginning of a strong push to make our self-service network even more dense with smaller stations, both in urban areas as well as on the countryside. We strongly believe in those self-service functionalities. Let me now quickly give you an overview of our progress in the area of ESG. Page 22 shows you our comprehensive ESG program, our sustainability master plan 2030 with various dimensions and a number of very detailed initiatives. Page 23 shows you some of the progress we've made last year. First year, where our CO2 emissions in the Austrian operations have come down significantly despite strong parcel growth.
CO2 emissions of 1-3 in Austrian Post in Austria down almost 6%. This is a result of our e-mobility push, our efforts in the real estate areas, real estate infrastructure. On a group level, we are also moving in the right direction. However, the strong growth internationally has compensated the impact of various initiatives. Some of the initiatives in Eastern Europe and Turkey are only in their initial phases. Good progress on the rollout of e-mobility. Austrian e-vehicle fleet already at 4,000 now, more than almost 1,000 vehicles added last year. Also in the social dimensions, among important employee indicators: diversity, women in leadership positions, employee turnover. We are moving step by step, year by year, in the right direction. Yeah, page 24 shows you again the ramp-up of our electric fleet as well as the ramp-up of photovoltaics.
We are now close to 10 MW peak on our roofs with a target of getting to around 15 by the end of this year. With that, we will generate around 20% of our electricity through PV on our own roofs. Page 25 shows you our mid- to longer-term development, including our targets. As I said, -6% last year despite substantial parcel growth. Target for 2030 is to, yeah, roughly halve emissions compared to 2021. By 2040, the ambition is to get somewhere to net zero in Austria. Of course, there is quite some time ahead. Some of the measures, in particular on the transport logistics side, are not yet clear, given that the technology in this field is not yet market-proven.
On the other hand, on the last mile, the yellow area of this chart, we have a very clear plan to substitute all combustion engines by 2030 through electric vehicles. Page 27 shows you that also on EU Taxonomy, we are moving in the right direction, significant progress on taxonomy compliance, revenue CapEx and OpEx. This has to do with classification of our electric vehicles, with documentation for recycling of logistics, buildings, waste. So the whole rule system is still a little bit delivering strange results in some areas. But at least you're seeing that the figures move in the right directions and reflect our ambitions and our initiatives in this field. I think more telling and more balanced picture comes from the various ESG ratings from various agencies. You see here an overview of the messages.
Across all rankings and ratings, we are among the leaders in our industry. Let me now proceed with more details on financials. Page 29, in addition to the already mentioned revenue and EBIT numbers, you see some margins. Yeah, given the environment and also the increasing share of parcel business in our group, margins are a little bit under pressure, a little bit declining. However, if you compare it with our peers in the post-industry, I think still very good, very stable margins in the environment to operate in, earnings per share at EUR 1.96. This is for an attractive dividend proposal. I'll come to later on. Also cash flow with EUR 221.6 million, we have a strong, robust operating free cash flow. Let me switch the income statement on pages 30. Happy to answer questions if there are any later on.
Now dive into our core segments, starting with the Mail division. Total revenue down -2.3% with a decline roughly in that order of magnitude, both in the Letter Mail as well as in the Direct Mail segment. In Letter Mail, it's a combination of the decline of around 6% with various tariff measures. And also in Direct Mail, it's the net of a substantial volume decline, again, with changes in mix and in price points. Yeah, so structurally, we will continue to see volume declines here. And we will continue to adjust our prices, at least in line with inflation. Page 32 shows you the segment P & L, still very strong absolute profit contribution and good double-digit margins. Moving to Parcel & Logistics, page 33, as mentioned, good growth. Here, you see the regional composition in Austria, around 11% revenue increase in Turkey, 41.
Again, as mentioned, it's a strong contribution also from inflation, not fully compensated by the decline in the lira. And also with 15% good revenue growth in Eastern Europe, central Eastern Europe. Logistics solutions, here, we see another year, yeah, the discontinuity effect of the discontinuation of certain one-off businesses related to the pandemic. They were a substantial provider of test logistics during the pandemic. And in 2022, we still had some significant business in the first months. And this was kind of way. So therefore, we see some decline. For the whole group, page 34, I think a very respectable profit contribution of around EUR 90 million. And I have already said that we have had positive one-offs around the accounting of a put option related to Aras Kargo in 2022 and negative ones in 2023.
Just the impact of those two is a double-digit million euro figure if you compare the two years. So on an operative level, the increase in this division was more than you see here. Retail & Bank division, page 35. Again, here, good revenue increase. Most of this revenue increase is coming from bank99, from increased interest income. In our group IFRS statement, we report the gross interest income. And you see here a substantial increase also on net interest income. We had a substantial one, but we report here the gross interest income. Page 36 shows you now in numbers the progress we make in targeting break-even for bank99 and the whole segment. We made a significant step in 2023, a high single-million-digit euro number in one-offs relating from the system harmonization is included here. So adjusting for that, we are not too far away from break-even, however, not yet there.
And we also have to acknowledge that we have had significant tailwind here from the interest rate environment. Moving now to our balance sheet, page 37, our balance sheet continues to grow. And at the same, I think, continues to be a healthy balance sheet with a strong and stable equity position of more than EUR 700 million, with a rather low financial leverage, financial loans of around EUR 225 million, matched by cash and liquid asset position of around EUR 100 million. Strong, of course, impact of IFRS 16, both assets and liabilities. Given the strong real estate portfolio, we have also rented real estate. And the blue element of the columns is pretty much the balance sheet of our bank on the liability side, customer deposits, and on the asset side, financial assets, mortgage loans, consumer loans, and a treasury portfolio of the bank.
Page 38 shows you the usual breakdown of our cash flow, good cash flow from operating activities, yeah, around EUR 150 million cash CapEx, which we split in this chart into maintenance CapEx and growth CapEx, subtracting the maintenance CapEx and adding some other income, which is mostly coming from the sale of real estate. We had a bigger former logistics center, which was sold in Q3, gives you an operating free cash flow of EUR 221.6 million. This is the number where our aspiration is to have the dividend well covered. I think you'll later see that our dividend proposal is well covered by this operating free cash flow. It would this year also be covered by our total free cash flow, also after growth CapEx and after acquisitions that we have made. This already leads me to our dividend policy.
We have made a clear promise to be an attractive and stable dividend stock. We once again would like to deliver on that promise with a dividend proposal to our AGM of EUR 1.78. This is a little sign that we would like to increase dividend again. At the same time, given the investment needs of our business and the growth opportunities that we see, in particular, in our parcel business, we also want to signal here that we have to balance investment and dividend. The EUR 0.03 increase is a sign that we want to grow the dividends going forward.
With that, moving to page 40, we have delivered now another year in a 15-year-long history of, I think, stable development, also in multiple crises, with, I think, very stable in the last year's quite significantly growing revenues, stable apart from the pandemic here, stable EBIT numbers, an attractive dividend policy now over 15 years, and good progress in decarbonizing our logistics operations, measured here by kg CO2 per shipment volume. With that, I'm now closing with our outlook for 2024. I think overall summaries, we look relatively confident into 2024. We have, I think, started well. However, we've only seen 2 out of 12 months. The visibility is still low. The environment is still characterized by high inflation and low to zero GDP growth.
Despite all of this, we do expect a positive revenue development with growth in the low to rather mid-single-digit range, with Mail probably being somewhere between slightly declining and flat. Parcel & Logistics, we do expect further good growth. Of course, as already mentioned several times, the exchange rate of the Turkish lira can have a significant impact. So therefore, we are also a little bit vague here with our revenue guidance. Capital expenditure still substantial, however, coming down from the high figures of the last years. On an earnings level, our target is to generate an EBIT that matches 2023 EBIT. Again, it's still 10 months to go. Of course, we will also try to, after hopefully having the AGM agreeing to our dividend proposal for 2023, of course, the objective is for another year to generate good earnings and a good cash flow.
We'll then, in a year from now, be able to propose again an effective dividend. So overall, I would say a rather confident outlook in a challenging environment. And now I'm very happy to take questions. Thank you.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wants to ask a question may press star and one. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and 1 at this time. One moment for the first question, please. We have our first question from Marco Limite from Barclays. Please go ahead with your question.
Hi. Good afternoon. Thanks for taking my question. So I've got a few questions.
The first one is on the Q4 results that, at least compared to my expectation, were a bit different in terms of mix. So Mail profitability, despite letter volumes down a single digit, the profitability was up year-over-year, which, yeah, sounds very positive. I just wanted to know what's driving that. And in the parcel unit, I think I've been mentioning more than once today that there were some one-offs last year and this year. Can you just please clarify or quantify, actually, the one-offs in Q4 last year and in Q4 this year, if possible? And my third question is on Aras Kargo. So in your presentation, I'm just trying to look for the slides. But basically, yeah, I'm referring to slide 17. You're referring to shipments and to parcels. If you could just clarify what's the difference between the shipment and parcel definition.
If I'm correct, by comparing the full-year rate versus the nine-month rate, it sounds like volumes in Q4 were weak. Just wondering whether, yeah, my analysis is correct. Thank you.
Marco, thanks for your questions. Let me start with the question on Mail in Q4. I understood the question was why Mail has been Mail profit-wise so good. I think the main reason is we had a substantial, yeah, price increase together with a product change effective September 1st. All this price change in a prior year comparison, of course, was effective in Q4, also combined with cost savings. And we also have here the impact of with the increasing parcel volumes in our network and increasing mail volumes in our network, of course, parcel also takes a higher share of the fixed costs of the network.
Those three factors in total explain, hopefully, the somewhat improved absolute EBIT of Mail in Q4. Then I think the second question was on one-offs in Q4 and parcel. I think they're roughly, if you take both years, we had a positive in 2022 and negative in 2023. I think you can take somewhere EUR 8.5 million change if you want to understand the operational development. So EUR 8 million more increase than reported. And I think the last question was around vast shipment and parcels. Yes, I think your observation is that volume-wise, the fourth quarter was a little bit on the weaker side. It is correct. Yeah, I think the balance here between volume and margins. And I think over the last year, probably the balance was a little bit more towards margins, which we have appreciated in the earnings.
But of course, yeah, we are also observing or we are trying to maintain our market shares and make sure we grow again. I think the first results of the current year are positive. The other question, I think, was documents versus or shipments versus parcels. So to help you understand, Austrian Post counts parcels on the one hand and documents on the other hand. There is a smaller share of, probably in the European market, you would call it Priority Mail, also within Austrian Post. This Priority Mail documents are declining in volume terms. So in total, the shipments have grown less than the market.
Okay. Thank you. I will go back and thank you. Thank you.
The next question is from Teresa Schinwald from Raiffeisen Bank International. Please go ahead.
Hi. Good afternoon. I have a follow-up question on Turkey. We're looking at unit revenues. They went up significantly, far above inflation. Very good. And where do you see the drivers for this year? Can you tell us a bit more, what's going on in the market, where it's moving in terms of dynamics, both on the volume as well on the price side? This would be my first question. Should I continue with my next one?
Yeah. Let's take all questions.
Okay. Next one is on the IT expenses in the Banking segment. So you said you expect the process to be finished by the end of this year. How much additional expenses do you expect for 2024? And the last one, also more on the one-off side. And for 2024, can we expect some more real estate deals? Do you already have an indication? And I'm sorry, I haven't looked at willhaben recently.
Yeah. I'm not sure if you find a lot on willhaben. Yeah. Thank you, Theresa, for your questions. Well, I think Turkey, the visibility, I would say, is rather low in terms of market dynamics. It continues to be a very volatile market. We still see inflation somewhere 60%-70% despite the more rational financial policy by the Minister of Finance and the Turkish National Bank with higher interest rates. And all the things you would typically put in place to fight inflation, still, inflation hasn't gone down significantly. I think what we see that the market is used to that and that half-yearly price increases, significant price increases, are accepted by the market. Volume-wise, as I already mentioned, the new year has started a little bit better than last year. It's very hard to make more precise comments at some point in time.
And the third driver is, of course, beyond inflation and volumes and possibilities, of course, the currency. I think our view is the currency is overvalued. And at some point in time, we will see what we thought in Q2 last year, a more substantial devaluation of the currency, typically at least in a few days or weeks, and then it stabilized again over time. I think so we have to calculate with that, but when and to what extent and whether at all it comes, I think we will all see. On IT, I think the answer to your question on one-off IT expenses, I would say take roughly EUR 10 million. This is what we expect in cost plus depreciation write-downs of the IT system, final write-downs of the IT system. We will then switch off once we have migrated in the third quarter more than real estate.
Yes, there will be portfolio, the usual portfolio cleanup where we sell smaller objects here and there, some old delivery depots we're not using anymore, or one or the other branch that we sell. But we don't see something really significant in the crop shop sector.
Thanks a lot.
And we have a follow-up question from Mr. Limite. Please go ahead.
Hi there. So I've got a few more questions, if possible. Can you just clarify what you expect in terms of integration costs for the banking unit next year and whether, within your guidance of flattish earnings in 2024 versus 2023, what we should expect for the banking unit? That's the first question. And my second question is on exit rates, both in letter and volume. So if, in general, in February, you're seeing broadly the same growth rates in letters and volumes that you saw in Q4. Thank you.
Well, thank you for your questions. Again, please witness that we do not yet provide full details on the first two months. But I think we have seen some improvement on the Mail side. Whether those are sustainable, I think we'll see over the next months. And we'll give you an update in our Q1 call in May. But I would say the mood is a little bit more positive. We also have a year in Austria with a number of elections, and not only a parliamentary election in fall, a new election in May or June, some local elections, and already now going on a workplace chamber election. All of those elections will add some one-off revenues to our ongoing revenues.
So I would say there is some optimism that we see some better volume numbers for the full years and also for the quarters ahead of us than last year. And on the bank, I would like to refer to my answer for Theresa. So let's assume around EUR 10 million in one-off costs related to the migration of the core banking system.
Okay. Thank you. I'm not sure if you can still hear me. Can you?
Yeah.
Yes. Yes. Okay. Now, if I can add one more, please, on the wage cost. So just, yeah, a reminder of what we should expect in terms of wage cost for 2024. Thank you.
I'm sorry. Wage cost. Yeah, wage cost. Yeah, last year, we negotiated a collective wage agreement where for the second half of the year, we had a kind of monthly one-off payment.
As of January 1st, we roughly have a 10% increase in wages. Of course, this is partly compensated by a small decline in total number of workforce that we have seen. It's partly compensated by the structural shift from civil servants to a new collective wage agreement and by productivity improvements. We are now, again, starting our negotiations for an increase as of Q3. There, I think the underlying inflation is somewhere between 6%-7%. That is typically the order of magnitude that one could expect.
So I would say for the total year, if you take 10% for the half-year and 7% for the first half-year and somewhere around 7% for the second half of the year, you take the average minus structural savings from the structural shift, minus some productivity improvements, then you will end up somewhere around, I would say, 3%-4% wage increase in Austria.
Okay. Thank you.
There are no further questions at this time. And I hand back to Harald Hagenauer for closing comments.
Well, thanks, ladies and gentlemen, for participating in this call. If you do have some further questions in the next hours or days, we are, of course, available for all of your questions. Thank you and hope to see you soon. Bye-bye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you very much for joining, and have a pleasant day. Goodbye.