Oesterreichische Post AG
VSE:POST
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Earnings Call Analysis
Q3-2023 Analysis
Oesterreichische Post AG
In the face of a challenging economic environment marked by a real decline and high inflation, Austrian Post showcased resilience with its Q3 results. The company navigates through a moderate recession with an 8% inflation forecast for Austria and a GDP growth prediction dipping to -0.8%. Despite these macroeconomic hurdles, Austrian Post managed to continue its story of profitable growth.
The company's group revenue saw an uptick of 8.5%, with Q3 specifically noting a 15% increase. Its EBIT (earnings before interest and taxes) also reflected a robust financial health, showing stability and a slight upward trend, even in the midst of one-off financial impacts that were encountered during the quarter. These one-offs included substantial product reforms in the Mail market and cost increases in the Retail & Bank segment.
Austrian Post anticipates significant capital expenditures (CapEx) for the full year, projecting amounts between EUR 160 million and EUR 180 million. This investment reflects both a dedication to growing their business and a commitment to enhancing their service capabilities in the logistics space. The establishment of the new Logistics Center in Vienna marks a milestone in optimizing their operational structure. The transformation of their workforce also continues to contribute to cost efficiency, aligning with the strategy of weathering inflationary pressures and a tight labor market.
Letter Mail volumes have seen a decline averaging around 5% over recent years, prompting reforms and tariff increases to stem the reduction in revenue. Direct Mail, specifically affected by the shrinking stationary retail market in Austria, showed volume declines at an accelerated pace of approximately 10%. However, the story is much brighter on the Parcel side, with an impressive 16.6% revenue growth. This increase is notable even outside of the high-growth Turkish market, which experienced extraordinary inflation and currency adjustments, assuring investors of a diversified source of parcel revenue growth.
The Parcel & Logistics division experienced solid growth bolstered by strong volumes and the acquisition and development of Aras Kargo in Turkey. Despite the volatile Turkish economic landscape, Austrian Post's Parcel volumes in the region surged by 11%, with revenues more than doubling, leading to EBIT margins significantly above the group average.
Austrian Post's Retail & Bank division reported a massive revenue increase of 39.3%, spearheaded by bank99, which saw its interest income more than double – reflecting positively on the Group's transformational financial strategy. Furthermore, the company is not only focused on financial performance but also on environmental responsibility. Their commitment to sustainable growth is evidenced by investments in electric fleet and photovoltaic facilities, targeting CO2 neutrality in the last mile delivery by 2030.
With a strong balance sheet and well-planned cash flow management, Austrian Post remains on firm financial footing. The company reported an operating free cash flow of EUR 177 million and a free cash flow of EUR 125.8 million after Q3. Considering the consistent cash generation capacity, the company is optimistic about rewarding shareholders with a compelling dividend and is confident in its financial outlook for the end of the year.
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Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the First 3 Quarters' Results Call. [Operator Instructions]
I would now like to turn the conference over to Harald Hagenauer, Head of Investor Relations. Please go ahead.
Good afternoon, ladies and gentlemen. Welcome to this conference call of Austrian Post. Please meet our CFO, Walter Oblin, and we mostly love to discuss and present the first 9 months and also the Q3 figure. Now please, Walter, go on.
Good afternoon, ladies and gentlemen. It's a pleasure to have the opportunity to present to you our Q3 results. With a summary up front. We are operating in a challenging environment. At the same time, I think we delivered another quarter of profitable growth and are looking confident into the full year 2022.
Let me start the presentation of Page 2 shows you the well-known segment structure of Austrian Post, Mail, Parcel & Logistics and Retail & Bank and changed since a few years already.
And moving to Page 3. Page 3 summarizes the challenging environment that we're operating in 3 main drivers that we want to highlight. First, our markets in particular, the e-commerce market on one hand, but also stationary retailers in Austria are operating in a different -- in a challenging market, characterized by a real decline, high inflation and the substantial consolidation in particular in the stationary Austrian retail market, where we have seen a number of exits, both through solvency as well as store closures.
Second for driver persistent high inflation in Austria higher than in the Eurozone of prediction for full year 2023 is 8%. At the same time, there is a lack of positive momentum in the economy in Austria, full year GDP growth is forecasted to a minus 0.8%. It's a combination of a recession -- moderate recession with high inflation.
The third driver, Türkiye, again, here a challenging environment, characterized by high inflation on the one hand, and second, a volatile currency which does not move in a linear way, but in waves or in one-off erosions, which means one-off erosions in Q2, while in Q3, we have seen a quite stable currency, and this, combined with the hyperinflation accounting which falls for substantial volatility in our numbers.
In this environment, in this challenging environment, I think we are satisfied to report today quite good numbers, both year-to-date as well as for Q3 stand-alone. Full year -- not full year, but group revenue for the first 3 quarters, up 8.5%, also EBITDA as well as EBIT, up also by single-digit percentage point for our Mail business overall under pressure under volume pressure, part of this volume pressure could be compensated by further increases as a result a relatively moderate revenue decline of 2.3%.
Parcel & Logistics, very good momentum volume-wise, across the portfolio, Austria up 14% Türkiye 11%, Eastern Europe up 36% as a result, in combination with the already mentioned inflation in Türkiye and revenue increase in euros, across the Europe 36%. And also very positive news. Our smallest segment, Retail & Bank with the strongest growth revenue of 40%, this is mostly coming from bank99 where the tailwind from interest rates has been boosting interest revenues. And we are -- we have made a substantial step forward also in terms of bottom line.
Page 5 highlights a little bit the volatility that we see coming from Türkiye and the Turkish lira in combination with hyperinflation accounting the core Austrian and [ GE ] business, relatively stable growth here of around 4.5% with limited fluctuation across the first 3 quarters. Whereas the Turkish revenue here very volatile plus 66% in the first quarter, minus 14.5% of the strong devaluation of Turkish currency in Q2, and now again back up at -- is a great quarterly growth of 80.1%. Hyperinflation continues that every quarter we basically apply the inflation for the full year and use the final day of the quarter to translate the Turkish revenues into Europe. This combination causes the small fluctuation.
Page 6 summarizes what I've already detailed in the chart, group revenue, as mentioned already, up 8.5% is the distribution across divisions, as mentioned. And let me directly move to Page 7, where I think we can report that based on a good revenue development, we also have a stable, slightly up EBIT development. We've had substantial one-offs also during the quarter, which I'll come to later on.
But overall, I think also on an operational level for the first 3 quarters, we have seen a stable resilient business portfolio with some margin pressure, as you can see here, particularly in the Mail business, but I would say in the core Austrian Logistics business at large, very good development in Türkiye, helping also profitability in Parcel & Logistics.
As mentioned, a substantial top line as well as bottom line improvement in bank99, which led to a EUR 19 million improvement in ramp-up losses in the Retail & Bank segment, and the corporate segment, slightly down due to a combination of factor cost increases and one-offs. So overall, stable development. And based on this development over the first 3 quarters, we also look confident into the full year.
Our strategy Page 8, I think is working, has proven now in different crises over the last years, that we can deliver profitable growth in different market situations in booming phases, but also in recessionary phases of the economy, and we think this strategy will also be the bases for future stable development.
Let me highlight a few elements of our development along this strategic framework, starting in our core business. And there we addressed Letter Mail. We have seen a decline of around 5% over the last years. We have seen an adjusted a somewhat stronger decline in the last quarters. However, this compares with a previous year with a number of one-off mailings, one-off mailings resulting from and the anti-inflation measures from the government, one-off mailings resulting from steep price increases from the Philippines, if we adjust those, we roughly see this around minus 5% for the first 3 quarters. However, we are alert here and volume decline is under observation.
Also, there have been presidential elections last year. This year is not a very strong election here, but next year a number of countrywide elections in Austria will happen along with them the election to the European Parliament as well as to National Parliament.
A very important milestone was achieved in the beginning of September, where a quite substantial product reform was implemented in the Mail market, combination of increases in that for Letter Mail tariffs with a substantial expansion and the substantial opening up of the economy letter is really the whole retail. And the SME segment is now able to access the economy later, the standard product for the mailbox stream.
So the addressed Letter Mail that is posted in mailboxes, is now the economy letter. This product reform was approved by the regulator already quite a few months ago and was now implemented September 1, which I think a good acceptance from the market, a good acceptance from the public space in Austria. And this, of course, will add both to the top line as well as it will enable further cost savings in the operations.
Moving to Direct Mail. Direct Mail, of course, is under particular pressure whenever the retail market -- the retailers market, our most important customer segment is under pressure and the stationary nonfood retailers in Austria are in a difficult situation right now. We see a number of insolvencies among the names like [indiscernible] , [ Hostinger ] number of German names in the classical mail order houses like [indiscernible] or [ Teilzahlung ] have moved into insolvency in the last month. And at the same time, we see store closures also among different -- but also among bigger chains performing through retailing.
And as a result, Direct Mail revenues are under pressure. We continue to be a strong Direct Mail market in terms of other countries, but volume is declining here above the rate of the last years. The China rates are in the order of mailing is around 10%.
Moving to the growing part of our business, the Parcel business, starting here with Austria. Here, we see very good growth rates, both in the Austrian Parcel business in the first 3 months of -- plus 11% volume wise and these is a trend that makes us confident that will also should have a good Q4 plus 15% in Q3.
Our view is that we are gaining market share also and Austria, as a whole, the overall market growth, we believe is smaller than that. To continue and defend our market leadership in the Parcel market. We have invested heavily over the last years. We are now coming to the final stages of this big investment program.
We successfully started production in our last and one of the biggest expansion projects in new sorting center in the south of Vienna. This center is up and running. It's already -- has already sorted up to 200,000 parcels a day over the last days.
As a result of this big project and a number of other investments among them, our investments in the green transformation, in particular, of our fleet, but also [ GB ] and the other investment types, we will have another high CapEx here, with CapEx coming out for the full year, somewhere between EUR 160 million and EUR 180 million, after 3 quarters, we stood at roughly EUR 100 million. We do expect CapEx to come down not to where we've come from before we started this big investment program as the focus become bigger. And as we will also see investment needs in Eastern Europe and in Türkiye, but package should come down substantially already next year.
Page 14 shows you, once more, the overview of our CapEx expansion program in Austria, as mentioned, the Logistics Center in the Vienna that was opened a few weeks ago, is the last big project here for the foreseeable future.
Page 15. Our staff structure in Austria, the usual passage, I think no big news here, that transformation is moving ahead, less than 4,000 civil servants in the group, in Austria, more than 10,000 for the first time in our new collective wage agreement. Let me remind you that the average cost per hour in the new collective labour agreement is roughly 50% of that offline civil servants.
So this staff transformation continues to provide some compensation to the spend sector from -- cost sector cost increases that we, of course, see, Again, here, a reminder, we have negotiated a collective wage agreement with our unions in spring, where wages will rise starting January 1 by roughly 10% in the second 6 months of this year, we are paying a fixed amount of EUR 300 per employee because of a -- [ spent hours ] pretty much there is a payment that is free of taxes and social security cost both for the employer as well as for employees and thus substantially less costly and the full 10% that we see as of January 1. And so in Q3, we already have to digest this additional payment.
Page 16, moving to our international portfolio Eastern Europe with strong volume growth, plus 25% more parcels in the first 3 quarters whereas in Turkey, again, here also a double-digit growth of plus 11% in the first 3 quarters, our newest addition to the group our expansion to Azerbaijan is also well developing month by month since we were already substantial values and more importantly, increasing volumes.
Page 17, some more details on our Turkish business. You see here that despite or apart from fluctuations in currency in the challenging inflationary environment, our business here is in a very robust growth mode, Parcel volumes up 11%. Revenue more than doubling here, and given the currency development and also the hyperinflation accounting in euro terms, we are up 45% compared to last year. And that combined, this is not mentioned here -- actually, it is mentioned there is an EBIT margin that is quite strong and above average.
Let me continue with Page 18. A few words on bank99. bank99 continues to grow. We see growth in customers. We see a slight growth in total balance sheet despite a very difficult mortgage loan market in Austria, we have seen good new production of mortgage loans, also good production of new customer loans, very solid portfolio in terms of risk, strong tailwind from the interest rate environment as a result of interest income more than doubling from EUR 22 million to EUR 56 million.
We are currently busy with merging 2 core banking systems into one. We have decided to work with the Accenture. Accenture has acquired the core base banking system to either set or remain in digital. And because of this takeover, digital has been the core banking system provider of bank99 in the first years, and we have now decided to move all customers and the whole banking operations to Accenture. This project is in a good first half and developing according to plan. At the same time, there is a substantial one-off cost associated with the migration project in 2 areas.
One is additional IT costs and second is accelerated depreciation of the acquired ING core banking system with the name OrangeLion. So these additional costs are impacting a little bit our P&L. Nevertheless, a strong -- big step towards breakeven. We do expect the operational breakeven next year, as next year will also be burdened by substantial one-off cost, we can expect a slightly negative bank P&L still next year.
Moving to Page 19, a brief snapshot on our self-service solutions. We are starting a next phase of going even deeper into the country with smaller self-service solutions, we have come to an agreement with Telekom Austria to take over hold phone cells, which we will use as a site to establish small postal stations where you can pick up and also deposit in post parcels. The first pilots are ongoing. And with that new phase, we do expect much stronger density of such service solutions to be achieved over the next year.
Page 20, I think we have started to regularly report also on core ESG indicators. I think the core messages here is, first, we are moving according to plan in Austria, where the electric e-mobility, the transformation of electric e-mobility is running, especially we will have more than 3,500 vehicles on the street by the end of this year. The target is to deliver last mile free of CO2 emissions.
So there's no combustion engine in the last mile by 2030, a change versus last year in CO2 emissions in Austria, minus 2.3%. On a group level, CO2 emissions are up. Why? Because we have this substantial volume growth in Eastern Europe and in Türkiye, and this has overcompensated the savings in emissions in Austria and from measures that we are also taking in our international portfolio and some progress also on the social indicators, women leadership positions. Here quarter-by-quarter, we see an increase in -- employee over still higher than we would like it to be, and there are a number of programs and measures taken to reduce [indiscernible].
Page 21 shows you the ramp-up of our electrical fleet as well as of photovoltaic facilities on the routes of our buildings in Austria, will have around 8 megawatts running by end of this year and the pipeline in development that should lead us to around 15 megawatts peak by end of next year, which means that we should be able in '25 to generate around 20% of our own electricity capacity by our own photovoltaic facilities on our own.
So much on -- as an update on important developments in the group. Let me now come to more financial details, Page 22 shows you the core -- the highest in revenue, EBITDA margin, EBIT margin on a stable development on decent levels and the share and cash was slightly up. I think this is -- actually we are well on track towards delivering a cash flow for the full year, that also leave the basis for another attractive dividend payment.
Page 23 shows you that within our Group P&L, we have a number of one-offs. Let me highlight 2 or 3 of them. We have sold, this is among other operating income, logistics -- piece of real estate where until last year, we had a Logistics Center in Tyrol, we sold this for roughly EUR 23 million, with a one-off profit resulting from this sale from around EUR 90 million. So this was a big positive one-off. We, last year, had a larger one-off resulting from the assessment of the liability around our put option for 20% of Aras Kargo. So also the put option that is in the hands of Aras, so that last year was around EUR 9 million, together with a number of other impacts from Türkiye. We, this year, had one-off depreciation impairments, totaling to around EUR 11 million. One source of that Eastern Europe, we exited from a subsidiary called [ Leskovac Hrvatski ] in Croatia that was distributing leaflets. We had some impairment on a facility that we took over when we integrated the DHL network.
So a number of one-offs, I think overall, there has been both last year as well as this year, a single-million digit figure as a positive net from these one-offs. Overall, I would say that the trend that we see here in profit developments are more or less stable, slightly upward development, we also see when we adjust toward these one-offs.
Let me now dive a little bit into the divisions main division on starting on Page 24. Total revenue minus 2.3% with a negative trend over the quarters. That is, as I said, coming from a negative momentum in the market, in particular, in the stationary retail segment, where, as already mentioned, we have seen the customers exiting or going into insolvency with a resulting decline in direct mail volumes.
Also Letter Mail, as I already said, the absence of positive one-offs compared to the year 2022, where we had a number of one-off mailings. We have seen a substantial volume decline which could not be fully compensated by tariff increases, but still here was minus 1.2%. I think we still see a quite resilient Mail business, and that is also shown in the Mail division EBIT, where with EUR 102 million EBIT contribution after 3 quarters, I think we can show here another year, a strong and resilient.
Parcel business, Page 26. I have already commented a lot on the positive volume development across the geographies which also is combined with also price increases, resulting in quite good volume increases that you see here on Page 26. Overall, 16.6% increase even if you take out Türkiye. Türkiye with its special environment in the group portfolio outside Türkiye, also a growth of 9.1%. Again, here, good volume development. We see certain mix change towards smaller and less costly products from our customers.
We suppose to see a particular growth of Chinese customers with a little bit of different volume and product mix. But overall, I would say, quite positive momentum here in the Parcel division. That is also reflected in, I would say, a decent EBIT margin as mentioned in both years, are some positive one-offs, but still with EUR 61 million absolute EBIT, one of the strongest years in the history of our Parcel division.
Last, and I think most positively revenue development, as mentioned in our Retail & Bank division, plus 39.3%. I have already explained the increase in interest income in the bank which is the main driver for that as a result Page 29 also ramp-up loss in coming down substantially from minus EUR 25 million to minus EUR 5.6 million. This number is still including one-off IT integration and depreciation costs of around EUR 7 million in Q3.
Balance sheet, Page 30, I would say, pretty much unchanged, a healthy, rather conservative balance sheet will leverage stable equity position and, I would say, little impairment risks. Page 31 shows you our usual cash flow overview, we will, as of this quarter, highlight also our share of, call it -- let's call it, green transformation CapEx, this includes our spendings for electric fleet, loading infrastructure and PV, roughly 35% of total maintenance CapEx going into this, what we call here green transformation.
We have seen -- you also see here the one-off proceeds from the sale of the real estate EUR 23 million with all those effects and operating free cash flow of EUR 177 million, and a free cash flow of EUR 125.8 million. With that, I think we're on a good track for generating cash flow also for the full year. That will be the basis for another fiscal year.
Let me close on Page 32 with our outlook for the full year, pretty much unchanged. We confirm our outlook. There are some nuances where we have moved to a slightly more optimistic wording, particularly on the revenue side. So also confirmed growth in group revenue at least in the mid-single-digit range. Of course, that is, to some extent, dependent on the development of the Turkish lira in the remaining weeks until end of the year. So far, we've seen a quite stable lira over the last weeks.
And on the earnings side, we confirm the target for '23 to generate an EBIT at the prior-year level, and while we are not yet providing specific guidance for 2024, we want to emphasize here that we also have the aim for next year to achieve revenue growth, and we are confident that we can deliver on that aim. And clearly, it is also our objective to maintain our track record of stability in earnings development.
So with that said, thank you very much for your attention, and I look forward to your questions.
[Operator Instructions]
The first question comes from the line of Pavel Kirjanovs, Bank of America.
Pavel Kirjanovs from Bank of America. Two questions, please. On Parcels, another good quarter of volume performance for domestic parcels. Can you talk about the trends through the quarter and what you saw in September and October. And I appreciate visibility is quite limited, but perhaps you can also talk about overall expectations for the peak season. I mean you increased your expectations for the full year in the division, so I assume that's somehow related. And then my second question also on Parcels, and I think you mentioned that in your opening remarks, but could you also talk about how your market share developed for the quarter and what development you're seeing in the market overall?
Yes. Thanks, Paul, for your questions. I think you rightly said we have limited visibility going forward. But of course, looking at September, October, I think we see continuation of the trend over the last 3 quarters where we have some faster volumes. And if we will try to see a trend that is rather a positive trend of increasing growth compared to last year as opposed to a declining trend.
But of course, the very strong I guess -- and we do have limited visibility on our big e-commerce customers will perform in the upcoming business. But overall, a good trend and what we've seen over the last few fiscals trend over the last few months. Second, market share development. Of course, we do not have any precise numbers just touching from the development of our big customers.
I think what we see here is that you see big e-commerce players are not growing as strong as we have grown in our total volumes, we see new Chinese players where we were able to win some important ones, not only for Austria, but for the group portfolio as a whole, in particular for Eastern Europe and Austria are winning share. So we see the consumers being obviously more quite sensitive and more inclined to try out some new Chinese players who are aggressively expanding into the European e-commerce market.
And finally, what we see from reported numbers in terms of real e-commerce revenue development. I think we would rather see a stable growth and real-time strengthening European e-commerce market and thus our conclusion that we are probably gaining market there.
The next question comes from the line of Nikolas Mauder, Kepler Cheuvreux.
I have three, please. First, housekeeping. On the EUR 19.3 million profit from the Logistics Center sale, I'm struggling to identify where this one was booked, you called it a Logistics Center. So was it in Parcels or was it in Mail? That was the first question.
Second one, on the Mail volume decline momentum, is this sort of an effect of the price increases that were pushed through in recent quarters? And will that calm down, again? Or is this sort of a new level of decline that we have got to get used to.
And then finally, I appreciate the thoughts on 2024 already. And I know the slide on the CapEx plans. But do you have like a more precise idea of what you're going to spend in cash CapEx next year?
Yes. Well, thanks for your questions. First question, this was a logistics real estate, both news by Mail and Parcel in the past. So I would say roughly the one-offs are split evenly across those two divisions, roughly. Second, on the Mail volume decline, we do not have the crystal ball going forward. I think what we, in particular, see is that we had in 2022, a smaller decline than the years before. Why? Because we had, as mentioned, a number of one-off mailings and the inflation measures from the government a lot of one-off mailings communicating price increases from utilities.
We had elections, presidential elections, large elections. We have some international volumes where one big Parcel customer is now using less Mail and more Parcel volumes. So there are a number of positive one-offs 2022, which we are not seeing again this year. And that explains a large part of that -- the business decline that you see this year as compared to last year. At the same time, a weak economy and price changes from our side, of course, lead to activities on this side of our customers to find ways to send out less mail.
I think we're not at a point yet where we would say we see an acceleration in the Mail decline. I think we need more quarters to better understand whether what we see is just a readjustment of a very strong year 2022 or a slight acceleration. But we are watching this closely.
And on CapEx for next year?
Yes. Sorry, I wrote on your question, but did not look at my -- see the paper, again. Yes, I think we're talking about probably order of magnitude, 2030 less than this year. And over the course of the year, I think we'll be able to give a better guidance.
The next question comes from the line of Marco Limite from Barclays.
The first question is actually a clarification on what you just said in terms of allocation of the one-offs that you had this quarter. So if I got that right, I think you said that the EUR 19 million were equally spread across the Parcel & Logistics and Mail and branches. So can you just confirm that basically the Mail EBIT reported this quarter is, let's say, EUR 10 million higher than the underlying number. So if you could confirm that, please? And then probably I'll move to the second question.
Yes. So again, we have positive and negative one-off this year. The big positive one was the sale of this peak of real estate that was owned in Mail and Parcel, roughly evenly split. We had a negative one-off, which was the same direction on a real estate where we moved out rented real estate, but with IFRS 16, it's also an impairment, which was shown in the same divisions, good EUR 5 million, we have one-offs resulting from migration and accelerate the depreciation in the bank. Overall, we had a few million positive impact across the group left, which is an order of magnitude that we also saw last year.
So hope it helps a little bit, in 300 -- yes, I hope this helps. And then you have further questions.
Yes. Sorry, there was some -- but I didn't get the EUR 10 million impairment allocation across the -- please?
Yes. Again, plus 19% positive across Mail and Parcel, a good minus 5%, also a real estate impairment rented also evenly split. And then we had order of magnitude 7% plus on the -- but not worth mentioning here.
Okay. That's very clear. The second question I have is on the Turkish business. Clearly, there is -- the numbers were somehow inflated on the top line by inflation and currency. I was just curious about the broad margin level of the Parcel cargo business for this quarter, if it's materially different compared to, let's say, historical, let's say, 10% average we've seen in the past?
And the third question actually is on the outlook. And just to confirm that the outlook implies -- I think you mentioned that in the call, but yes, if you could confirm it would be great that you're still assuming breakeven level for the retail banking unit for 2024, did I get that right?
Yes. What I said is that we will, on an operational level, most likely achieve our breakeven next year. However, there will still be one-offs that will burden the segment P&L that we do not expect a breakeven after one-off migration and depreciation costs for 2024, yes, so operational breakeven, yes, including migration and depreciation not fully breakeven next year, yes.
Second question, or first question was one on others. So I have -- not always on the margin level where we see it today, in particular, 2022 started out quite difficult. I think we've improved a lot over the second half of last year. So I would say last year was more on average with -- on the average group level. And this year, we are substantially, as mentioned, above group average in the order of magnitude of the numbers that you mentioned.
[Operator Instructions]
The next question is from Teresa Schinwald from Raiffeisen.
I want to come back to the direct mail revenues. Can we assume the high 60s as a new run rate for this segment after some clients -- customers reduced their mailings? Or would you expect further declines in this segment? And I'll follow up with my second question because it's also a housekeeping one. What's your expectations for tax rate or taxes for the full year 2023.
Well, can you repeat the first question? I didn't -- what should be a new run rate? I didn't understand the word you're using, your in line is...
So the direct mail revenues in the third quarter were below 70, so in the high 60s. Can we see -- assume this to be a new run rate for the direct Mail revenues? Or do you expect further declines in this segment?
Well, to honest, I'm not prepared to talk about quarterly revenue run rate because we don't have a linear business, and I'm not saying you imply that. Of course, Direct Mail has also a strong seasonality with Q4 being typically the strongest quarter and Q1 with -- so on, also strong. And Q3, of course, being the weakest quarter. But I think the general trend in Direct Mail is downwards, yes. There are at least 3 drivers that drive Direct Mail revenues down.
One is the consolidation in the stationary retail market and the loss of revenues in that market segment to e-commerce players were using Direct Mail to a much lower extent. Second is the increasing digitization also of advertising, and accordingly, the loss of market share of printed advertising in various forms be it in newspapers, magazine, but also in the postal products.
And I think we've stood against this trend quite successfully over the last year, but this trend is happening in 36 GDPR, which has also post a number of players to shy away from sending Direct Mail in a very intense way.
So overall, we have to expect that there will be further downward pressure on Direct Mail, however, I do hope and I'm confident that we will not see this 10% hopefully, run rate going forward, yes. On the corporate tax rate, yes, we see a lot of volatility, and we apologize for that in our tax line that is mostly coming from Türkiye and they're mostly from the hyperinflation accounting standards, which moves our deferred taxes a lot quarter-by-quarter.
In Austria and as a group, most of our taxable income is underlying the corporate tax rate in Austria, which is currently nominal, is it 24%, with some tax effects in the year, but overall, this order of magnitude of 25%. And the -- you're all aware that in Austria corporate tax is currently being reduced over 2 years, I think from 25% to 23%. But tax rate we have and everything else is pretty much paper tax coming from...
There are no more questions.
So if there are no more questions, I would like to thank you for participating in this call. If you have a couple of questions or some more questions in next day or 2 days, we are available here so don't even hesitate to follow up. And so we have to say thank you and goodbye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.