Good afternoon, ladies and gentlemen, and a warm welcome to the Österreichische Post AG Q1 2025 Results Call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Please keep in mind that to ask a question, you have to dial into the conference call. Let me now turn the floor over to your host, Harald Hagenauer, Head of Investor Relations.
Good afternoon, ladies and gentlemen. Welcome to this conference call of Austrian Post . Today, we would like to give an update on the first quarter, plus an update on our strategic intentions for the next years. Here with me in the room is Walter Oblin, our CEO, plus Barbara Potisk-Eibensteiner, our CFO. I would directly like to hand over to you, Walter.
Good afternoon, ladies and gentlemen. It's a pleasure to have the opportunity to present to you our Q1 results, including an update on Austrian Post's strategy in the marketplace going forward. As a summary upfront, I think we're operating in a challenging environment, but in this challenging environment, we could deliver a solid Q1 result. Let me start on page two. The economic environment continues to be challenging. Austria is in the third year of recession. Fortunately, we do have exposure to markets with more favorable economic development, in particular our CEE portfolio and Türkiye. The core trends in our markets pretty much are unchanged: growing e-commerce and decreasing mail volumes. Still, we see some softening of demand in e-commerce and some increased volatility of e-commerce volumes from Asia.
On the stationary retail side in Austria, consolidation is continuing with a negative impact on our advertising mail, on our direct mail volumes. Türkiye continues to be an interesting market with strong but decreasing inflation. The exchange rate deteriorated in Q1, but economic growth is quite positive. In this environment, we delivered, I think, a solid Q1. The Q1 summary is slight growth, 0.7% revenue growth, with a small EBIT decline of 7.6%. This has to be seen in the context of a very strong Q1 last year with positive tailwinds. In particular, we had a strong countrywide election last year in our mail business. We had a substantial price increase effective late fall 2023 that supported Q1 figures last year, with a strong inflow of Asian volumes into Eastern Europe, contributing to a 44% growth in Eastern Europe.
We had a favorable development of inflation and exchange rate in Türkiye. All these positive supporting effects were not present in Q1. In addition, last year, we had two more working days than in Q1 this year. I think in the context of all this rather negative context, I think the result is quite satisfying and as we expected it. Page four, the usual summary of our three core segments: mail, our Austrian declining legacy business, still a strong and profitable business with last year's revenues of EUR 1.2 billion; parcel and logistics, our growth engine, last year's revenues EUR 1.7 billion; and retail and bank, our Austrian retail network and our bank 99. Last year's external revenue, EUR 200 million. I think interesting on the right side, the revenue distribution in Q1 this year.
I think this shows you that we have roughly 60% exposure to a growing e-commerce parcel market. In the meantime, our declining letter mail and direct mail business in the meantime is less than 40%. This was substantially different only a few years ago. Let me start with our core mail business, Austria only, as you are aware, with EUR 300 million. Still a strong and profitable business in Austria. However, given the strong backwinds in Q1 last year, around 5% below last year, the negative volume trend has continued pretty much unchanged, a rate of around 5% per workday. On a yearly basis, of course, which means that we have lost roughly 60% of volumes since 2008. We are now in the 18th year of mail decline in Austria, and our mail business continues to be quite significant in size and in profit contribution.
We continue to adjust our operations to a declining mail volume. In the meantime, 85% of mail volumes are in the slower economy product. As of May 1, we have implemented a product reform that not only adjusts and increases prices with the inflation since the last price change, but this product reform also makes the economy product the new standard product. The lower runtime now is the standard product. Priority service is still available as an additional service. Direct mail, again, similar to addressed mail, a significant revenue contributor with last year EUR 440 million, together with media post in Q1, - 6% revenue and - 2% volume. Still, these products are strong, are relevant among the print media, print advertising products with the highest reach in Austria.
However, there is a trend towards digital marketing, and the core customer base, which is the stationary retailers, continue to be in crisis mode. Page nine, coming to our growth field, parcel and logistics, first quarter revenue of EUR 418 million, which is around 4%+ compared to last year. In Austria, page 10, we saw a volume increase of 5% after a double-digit volume growth in Q1 last year. Another growth year after a very strong growth last year. Revenue last year, EUR 930 million. With the 6% this year, if we continue to grow along this trajectory, a billion revenue is within sight. Page 11, Austrian parcel market, we are the clear market leader in the Austrian parcel market, have gained share last year.
Our aspiration is to be the clear leader in the Austrian market, not only in terms of volumes and market share, but also in terms of quality and service innovation. Sunday delivery, a pilot that we introduced in September last year in four districts in Vienna, has proven to be well accepted by customers, and we are now starting with the rollout across Vienna. Page 12, Eastern Europe, a more difficult start into the year, in particular compared to a very strong Q1 last year. Last year's growth, 44%, driven by strong inflow of Asian parcels. These Asian parcels have a strong volatility, both in terms of general volumes that come into our markets, but also we see here customers that tend to frequently switch suppliers. If you look at Eastern Europe in a two-year time frame, we still have substantially higher volumes than two years ago.
At the same time, we also are working hard and have an expectation that we come back to a positive growth development by the end of this year. Page 13, Türkiye, growth in EUR terms around 11%, growth in Turkish lira around 30%. The Turkish lira has deteriorated in combination with hyperinflation accounting. This has weighed on our revenues and EBIT this year, in particular to a more favorable Q1 last year. Still, Türkiye continues to be a strong generator of EBIT and profits to the group also in Q1. Retail and bank division, slight growth in Q1. I think more importantly, a few very positive milestones for bank 99 over the past few weeks. Number one, we had a positive Q1 development where we are on a good track towards our plan to break even by the end of this year.
Second, we successfully harmonized two core banking systems into one on Easter weekend, successfully migrated all XING Austria customers to the outsourced core banking systems that we used since the beginning in bank 99. This was a very large, very complex, very challenging project, and we are relieved and positive that we now have this migration behind us and now have 100% of focus and energy for customers and the market. The third positive milestone was that Moody's has given us an initial rating at Baa2, so a positive investment grade rating, which I think is a confirmation that bank 99, after five years now, is growing up, is a relatively mature bank and has a strong credit quality across its portfolio. I think three positive milestones confirm us that bank 99 is an important part of Austrian Post's future.
Our self-service solutions continue to be well received by our customers, and we continue to aggressively expand them. End of Q1, we had roughly 2,700 out-of-home locations in Austria as a sum of postal branches, postal partners, and self-service locations comprising both self-service branches, but also postal stations. Last year, more than 32 million items were either shipped or picked up through self-service solutions, and we continue to roll out these stations with a target of more than 3,000 postal locations across Austria. With that said, let me hand over to Barbara, who will give us more details on our financial results.
Also, welcome from my side. Let me lead you through our Q1 figures. Despite the challenging market environment, Austrian Post was able to increase the revenues by 0.7%. EBITDA margin, a slightly lower margin than the Q1 2024.
There we had, at the one hand side, a mixed effect, more revenues on the parcel and logistics side, lower revenues on the mail side, and also some other reasons for this. EBIT margin in line with EBITDA margin declining from 6.9% to 6.3%, earnings per share EUR 0.56 compared to EUR 0.59 in Q1 2024. As we already learned, Q1 2024 was a very strong one on the mail side due to the elections and also other positive one-timers. Very strong cash flow in Q1 2025 with EUR 125 million. It is also due to one specific item. We had a tax refund from the Austrian tax authorities in the amount of EUR 40 million and some interest on this, and this had a positive impact on the cash flow. Equity ratio also an increase from 29% to 31% for the logistics business.
If we then go to page 19, the revenue development on the segment level. Business and also the elections, which created in 2024 revenues which directly dropped down the whole P&L into net profit. Also positive news from retail and bank. There we are better than last year. What we see is that bank 99 is really on a good way to break even. And on the corporate side, we were also able to show some cost savings, which ended up in a better performance of EUR 4.4 million. Coming now to the income statement, I already went through the revenues. What you see in our P&L is the cost inflation, not only coming from Türkiye, also the cost inflation we got out of labor cost increases, which also had then the impact on our profitability. Financial result, there we show better result compared to Q1 2024.
This is mainly coming from better cash flow and higher interest on the money we had on our deposits. The profit for the period, very close to EUR 40 million, slightly below the profit of Q1 2024. Earnings per share I already mentioned. Going into the segments, on the mail side, I think already said everything. If we are going to parcel and logistics, I think that's from higher interest because there we have a different picture. We showed rather healthy revenues on the parcel Austria side in Q1 2025 with the increase of 6.4%. In Türkiye, most of the growth is coming from the inflation. What we saw is lower volumes. Parcel CE really suffering from lower Asian volumes coming, but we also have to say that we had a very strong Q1 2024 on the Asian volume side in CE. EBIT of the parcel business, EUR 18.6 million.
Retail and bank division, as already stated, EBIT of -EUR 1.1 million, -EUR 0.7 million coming from bank 99, which still had some costs on the migration side, on the IT migration side, but they would be really on a good way to break even. Coming now to our solid balance sheet, you see a slight decrease on the balance sheet side. It is mainly coming from volumes of bank 99. The savings are slightly decreased and in line with this also, the loan side had a negative impact. We still have a very solid financial debt. It is about EUR 93 million, and the debt factor, financial debt versus EBITDA, is 0.2. Considering also IFRS 16, then we are at 1.1. Operating free cash flow of EUR 125 million. The one reason for this is the one-time effect of the Austrian tax authorities.
On the other hand, we also saw better cash in coming after the year end 2024, where some of our customers are optimizing their cash positions. Due to this, we saw higher cash flow in 2025. If we are coming now to investment, our guidance is still valid for this year. In Q1, we spent very close to EUR 25 million. Where did the money go to? Technology and optimization about EUR 20 million and more than EUR 3 million still into the decarbonization projects we are running. On the right-hand side, you also see the CapEx mix of 2022 until 2024, where you see that about one-third of our CapEx is going into the decarbonization. Now I would like to hand over to Walter again, who wants to give us the insight into our new strategy.
Thank you, Barbara. Let me continue with an update on our strategy.
We worked over the last months within Austrian Post in the broader leadership team on a review of our strategy. We called this project LEED 2030. It should reflect that we have a clear ambition to be a leader in our markets, a clear conviction that to be profitable and to be successful, a leadership position in our businesses is relevant and important. 2030, this should be a strategy that should guide us over the next years with a midterm horizon of 2030, a time horizon where we do expect the core trends substantially changing our market and our setup, both the continuation of the decline of mail revenues, but also the continued growth of e-commerce. We see a rapidly changing economic and technological environment. Page 29, six mega trends. I don't want to go into detail. It's clear technology is changing our game in many ways.
The whole macroeconomic environment is becoming more volatile. Global trade and commerce is rapidly changing, also given increasing geopolitical ruptures. Consumer patterns are shifting with the most important trends in our markets, the digitization of communication leading to declining mail volumes and increasing share of online shopping as opposed to stationary retailing, changing urbanization and demographics, and sustainability in an also rapidly changing and dynamic environment. Rapidly changing and dynamic environment to more relevant trends. Page 30 summarizes the core strategic directions that should guide us over the next years. Our ambition, our vision for 2030 is to be a leading logistics and services group reaching more than 150 million people in our region, consisting of Austria, Central and Eastern Europe, Türkiye, and beyond. Three core strategic thrusts. Point one, post and beyond in Austria.
We want to continue to be a strong post, but we think there is more opportunity in the Austrian marketplace for us as a provider of key services beyond post. We see bank financial services as an important pillar of our future portfolio in Austria. I will come later to an announcement that also in the field of telecommunication, we see a more entrepreneurial growth opportunity for us. Strategic thrust number two, international e-commerce. That is our big e-commerce. That is our big growth opportunity. Our aspiration is to be the leading e-commerce partner for this region, Austria, Eastern Europe, Türkiye, and beyond. This is a region where we are already today covering 150 million people with high-quality delivery networks.
Our ambition is to grow in this region, to bundle our offering for the large e-commerce platforms of this world, to offer them a group service across this region, to continue to invest and to also look for geographic opportunities that are not currently part of our portfolio. Number three, one group, operationally excellent. We think there is opportunity for more integration across our group, across regions, across businesses. Our aspiration is to establish operational excellence across the group. We think we have a quite high standard in several countries already. We think that daily going into work and increasing efficiency, becoming even more innovative and efficient has become part of our DNA across a large part of our employees. We want to continue with this ambition and to be technology-focused and to be a leader in applying modern technology as part of that third thrust.
In the middle, the green circle should express that three core values, three core overarching guidelines continue to be important. We continue to have the aspiration to be a leader in sustainable logistics. We have a clear aspiration to be a very customer-focused, customer-driven company, and we want to be the employer of choice for our 23,000 employees in Austria and for roughly 30,000 employees across the group. An attractive company culture that we have been working on substantially over the last two, three years, and where we will continue to work on, is a very important element of this aspiration. Let me briefly lay out what this specifically means. Post and beyond in Austria, clearly we want to defend our market leadership in the Austrian mail and parcel market.
We will continue the ongoing transformation of our networks, of our product offering to reflect a declining mail volume and a growing parcel volume. We see opportunities in a playing field that is mapped here on page 31. Beyond the pure postal services, we see several examples across Europe that postal companies with their strong platform, with a trusted brand, with a branch network that is one of the densest retail networks in the country, with strong digital channels, that postal companies have opportunities beyond postal services. We have proven that we can build new businesses on this platform with bank 99, where I think we're in a very good way. We have a focused retail offering in our branches. We have established singular services in healthcare, government services, and energy in the past. We have been in telco throughout the history of our company.
We announced today that we will continue our presence in the Austrian telecommunication market next year on a new level by entering the telecom market with an MVNO, with a mobile virtual network operator in a new cooperation with our current telecom partner, A1. We will continue our sales cooperation until the end of this year. In Q2 next year, we will start an MVNO, so a mobile phone and internet offering under an own brand. We think there is a strong opportunity in the Austrian marketplace given Austrian Post's past history in telecom, given our strong and trusted brand, given our strong branch network and our digital channels. We look forward to capturing this opportunity.
Moving to the second pillar of our strategy, international e-commerce, we are today already a strong group in the e-commerce market in the region shown on page 33, covering 11 markets with a strong logistics network that reach 150 million consumers. We expanded to Azerbaijan last year. We already communicated in our last quarterly call that we will make cautious steps to Georgia and Uzbekistan this year in a very risk-averse approach. We see white spots within this region. We see opportunities to strengthen our market position in some of the geographies and have a clear commitment and ambition to grow as an e-commerce partner for the large and small e-commerce customers in this region. We think this is an attractive region showing above-average growth, given that the penetration in terms of profit per capita in most of these markets is still substantially below the European or worldwide average.
Moving to strategy pillar number three, one group, operationally excellent. We want to develop a much more integrated international group operating model, capturing the synergies across our portfolio, offering our large international customers one integrated product offering with integrated IT interfaces through one sales force. I think a very substantial change from the model we have been operating so far. This combined with a strive for excellence in our operations and with an ambition to use modern technology, be it modern sorting equipment, modern IT solutions, or new technologies such as AI, robotics, or autonomous driving. Last, our overarching guidelines, sustainability, customer centricity, and an attractive corporate culture. On page 35, we, I think, have a very strong track record. Sustainability.
We believe that sustainability gives us a competitive edge in our consumer markets, in our B2B customer markets, gives us a strong sense of purpose for our employees, and also captures a premium vis-à-vis investors and capital markets. All these sustainability solutions that we currently apply, be it electric mobility, PV, are also economically advantageous solutions. Total cost of ownership of our electric delivery fleet is already substantially favorable compared to combustion engines. We will continue to roll out these technologies across our geographies. As I said, being the employer of choice for our employees is an important element of the strategy. We are in a service business where our postmen or the people working in our postal branches make the difference for our customers. We will continue to work hard to be an attractive employer for our employees.
With this strategy, moving to page 36, we want to deliver along our value proposition to investors to be a defensive, attractive dividend stock also for the next years. We have a track record of 16 years successful development along this value proposition to defend. I think our management team consisting of Barbara Potisk-Eibensteiner as our new CFO, Peter Umundum, our Deputy CEO, and myself is highly committed to this strategy. I think it stands both for continuity as well as change and transformation. I'm delighted to inform you that Peter Umundum yesterday got the confirmation by our Supervisory Board for another contract period starting April 1st next year. The continuity of the current management team is confirmed for the next years. I look forward to working with this team to develop Austrian Post into the future. We also have clear financial goals for our future.
We already communicated the target of EUR 4 billion in revenues by 2030 after we have achieved EUR 3 billion faster than originally anticipated. We also have a clear profitability goal with an EBIT margin of at least 6%. With these ambitions and the outlook for 2025, I will close this presentation. Our outlook is pretty much unchanged and unchanged to the outlook that we communicated in March this year. We continue to see a challenging environment ahead, letter mail volume declining, not very much economic growth support coming from the macroeconomic environment. We stick to our target of a modest revenue growth for the full year and an EBIT target in the order of magnitude of EUR 200 million. Despite this challenging economic environment, we think Q1 is well on track towards these goals. We are committed to these goals also going forward.
Thank you very much for your attention. We are now happy to take questions.
Thank you very much. Dear ladies and gentlemen, please dial into the conference call to state your question. The combination to state your question is nine and the star key. I repeat, the combination is nine star. Please press nine star now to state your question. One moment, please. If you wish to cancel your question again, please press three and the star key. To state your question, please press nine and then star. One more moment. At the moment, there seem to be no questions submitted. Since there are no questions incoming, I close the Q&A session with that and hand the floor back over to the hosts.
Thank you, ladies and gentlemen, for participating in this call. It looks like everything is clear, Barbara and Walter though.
Of course, if you do have some questions in the next days, do not hesitate to call us today or the next days. We are, of course, available for you. I thank you once more here and see you hopefully soon. Bye-bye.
The recording has been stopped. Your conference call has come to an end. Thank you for attending. Goodbye.