Österreichische Post AG (POST) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the full year 2022 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. Today, we would like to highlight Q4 and the full year results of ' 22, financial figures and also some nonfinancial figures. The presentation will be held by our CFO, Walter Oblin. And I would like to hand over to Walter, our CFO.

Good afternoon, ladies and gentlemen. It's a pleasure to have the opportunity to present to you our full year results for 2022. Let me start on Page 2, giving you the usual overview about who we are and how we report. Most of you are well aware. We report in 3 business segments: Mail, Parcel & Logistics and Retail & Bank with Mail and Parcel & Logistics being too strong, stable, profitable segment over the last years. And Retail & Bank is a growing, still unprofitable segment. Our group revenue last year, EUR 2.5 billion revenues, pretty much same revenue as 2021 with an EBIT of EUR 188 million. I think we delivered a solid result in an environment which was very difficult for postal companies [ mature growth ] Page 3 shows you the transformation of the company over the last decade and a little bit more. In 2009, we were still a company standing on one foot, in a strong Mail business. In the meantime, we are standing on 2 strong feet, strong -- still strong despite the structure of the time, the Mail business, which is still strong and generating substantial profits and cash flows and with an equally strong -- in terms of revenues, equally strong Parcel business, which also delivered a substantial profit contribution to the group. Third, and again, in a growth mode is the segment, Retail & Bank, hereafter the termination of the cooperation with BAWAG P.S.K in 2019 and with the launch of Bank99 in 2020, we have doubled segment revenues over the last 2 years. Breakeven for this segment is targeted for 2024. Page 4, our environment was difficult, was challenging over the last 12 months and continues to be. The main drivers remain trends in the market, I think, are well known: rising energy costs driving strong inflation which, at the same time, puts pressure on consumer sentiment and this force parcel volumes to consolidate and retreat after 2 years of record growth. And in our portfolio, also quite important, a very difficult macroeconomic environment in Tukiye with strong inflation in the lira which in particular in Q4 '21 strongly depreciated and provided additional challenges, in particular in our group P&L, which, of course, denominated in euro. Staying in Tukiye, our thoughts and prayers are with the victims of the devastating earthquake a few weeks ago. We also have lost colleagues from Aras Kargo and many colleagues and partners are affected in various ways by this tragedy. Of course, our colleagues in Tukiye and also in Austria are trying to help making these small contributions in this of tragedy. Moving back to our business and our financials on Page 6. Here, I think we tried to give a brief overview about the highlights of this -- of the last year. We had a difficult start in Q1 with group revenues down minus 7% coming almost equally from both Mail and Parcel. Quarter-over-quarter, we came back into a growth mode and with overall, I would say, quite strong half -- second half year. We were able to come back to a group revenue level, which was slightly surpassing 2021 revenues EUR 1 million, but I think it's a good signal to be able to report here a positive revenue development. Volumes came back. And of course, we also implemented price increases, which also supported revenues. In Q4, I think, in particular, was a decent quarter, group revenues increasing by 3% and also EBIT was 4% above the group EBIT in 2021. Page 7 shows the development of group revenues on a more detailed level. Our total group revenues as a fact of plus 21%, so plus EUR 2.5 million. So I would say flat revenues. Mail surprisingly resilient with -- despite the structural decline of the Mail business in volume terms, revenues down only minus 0.5% in Q4 is slightly positive. Parcel & Logistics down minus 2.5% in particular, the depreciation of Turkish lira put pressure on revenues. Outside Tukiye, we will stay strong. Second half of the year, we came back to a slight growth for the full year plus 0.8% and the segment Retail & Bank growing by 64%. This is in large part due to the inorganic impact of the acquisition of the postponed retail business of [ ING ]. Group earnings, moving to Page 8, down 8% was EUR 188.4 million. I think still a respectable solid result in this very challenging environment. Mail slightly up by EUR 2.5 million on a quite strong level. Parcel & Logistics in consolidation -- consolidating mode certain normalization after certain one-off revenues fell away and in particular, our Turkish earnings also normalized Parcel & Logistics down minus EUR 30 million, but still, I would say, quite a decent profit margin for the segment. We'll come later to that. Retail & Bank improving still in the startup loss mode, but improving by EUR 13 million, a right direction with corporate more or less flat. Page 9 summarizes the well-known strategy, business directions, first, depending on our market leadership and profitability in the core business, meaning our strength. Core Mail & Parcel business. Pillar #2, profitable, both in new markets, meaning international Parcel markets, but also value-added solutions across the value chain. And the strategy pillar #3, the development of retail and digital offerings for private customers and SMEs. This includes our banks. This includes our retail network, this includes digital offerings for consumers and then both an overarching priority, the topic of sustainability, diversity and customer orientation. We have a clear aspiration to be a leader in sustainable logistics, and I think there is -- are a leader in the industry. Page 10, now moving through those strategic pillars, starting with our Letter Mail business. I think over the last years, we would look at this and say this has proven to be quite resilient despite the previous digitization acceleration in post pandemic. We have seen Mail volumes declining in a very stable way around 4.5% now over the last roughly 10 years and on average, also over the last 3 years. Last year, relatively moderate decline of 2.6%. Of course, there were some helpful one-off mailings part what we do with anti-inflation measures of the government, energy problems, climate problems, we had a presidential election. We had ability having to send out price increases at various times throughout the year. But still, I would say, quite a resilient Mail volume. We see also the quarterly development where Q1 was the only negative quarter volume-wise. And over the last 3 quarters, we have a slight positive development. I think our strategy remains unchanged. We want to offer a strong, good quality to our customers at moderate price level despite having had to raise prices. But substantially over the last months due to the inflation and the cost pressures that we have, we remain one of the cheapest mail markets in Europe. You see here the usual comparison, of course, is the high inflation we have, further tight increases will have to follow. But this is a reminder of the measures we implemented last year, July, increasing the economy product, October 1 priority product at the end of the year pretty much all other products. Page 12, Direct Mail and Media Post remains a strong business pillar for the Austrian Mail business with a revenue of around EUR 430 million. All these product groups are structurally under pressure. Our media customers, be it Direct Mail and the remains at a relevant customer group, in particular, the stationery retailers, we were quite concerned around this time of last year with the rising energy costs with strongly rising paper costs that we would have to suffer significant customer and volume losses in this field. Fortunately, this did not happen and positive segment proved quite resilient. Volume-wise, we were actually slightly up. However, we have to be -- we have to expect that this segment remains structurally under pressure, particularly the Direct Mail has been continuous declining over the last years and also on that breath, I think we have to expect pressure here. Moving now to the growing part of our portfolio, the Parcel business in Austria last year, almost net volume, slightly down minus 1.4%. This after 2 years of record growth, where over 2 years, we increased by 50% and the consolidation we've seen in Austria is small compared to what we're seeing in our countries, I think positive for us. It mostly happened in Q1 or Q2. In Q3 and Q4, we were back into a growth mode, both volume-wise, but also revenue-wise, which led to, for the full year, a small revenue increase of 1.5%. We remain the clear market leader in the Austrian Parcel market shown by the most recent market share statistics published by an independent agency, the Austrian market last year had around 350 million parcels, 50% were delivered by Austrian Post. In the B2C market, we are a clear market leader while in B2B where we're only to much anchored with an independent offering around which we're visible. We are the clear #2 in this market share. To defend this market leadership, we have substantially invested in comprehensive logistics infrastructure with a comprehensive investment program over the last years. This is now coming through last phase. Accordingly, we have had strong and really above historical levels. CapEx spending last year EUR 152 million, actually a little bit less than we had guided for. Reason is mostly being supply chain disruptions on the deliveries, but then also savings and some projects we entered into the volume development which fall below budget. For this year, we guided a order of magnitude of EUR 160 million to EUR 180 million and as of 2024, we expect CapEx to slow down to a more sustainable level in line with depreciation which again shows you why we believe that CapEx levels will go down basically with the last big sorting center Vienna, our comprehensive investment program comes to an end. Of course, there will be further construction if we would be in the similar projects, but not this comprehensive platform. We have always Vienna, pretty much either built new or substantially expanded almost every logistics center in Austria and have more or less tripled our storage capacity in preparing for the growth of the next year. Page 17, I give an update on our staff structure development. 2022 was a year where we, of course, also adjusted our staff base to lower volumes, total head count down minus 356 FTEs and the change from expansive civil servants and this old collective wage or collective labor agreement employees to employees under the new collective labor agreement of course, continuous in 2009, the new wage agreement with an average cost per productive hour, which is around 50% of civil servants leading up. Moving now to our second strategic pillar, profitable growth in near markets. Page 18 shows you our geographic portfolio. Strategic focus clearly is here both in Parcel markets, East and Southeast of Austria. In addition to that, we have a EUR 50 million Mail business in Germany, pretty much the sales subsidiary results on network activities in East and Southeast Europe, including Tukiye, last year, we delivered around 250 million parcels with total revenue of around EUR 428.3 million. You see that our Eastern European Parcel portfolio still was in the growth mode despite the strong growth that also happened here between 2019 and 2021, whereas in Tukiye, after the strong growth in 2020, we were also in consolidation mode and the delay was a very difficult disappointing starting to the year volume-wise but then volumes also recovered. Page 19 shows you more details for Aras Kargo. Of course, the high inflation also caused us to improve -- to increase prices. As a result, revenue in Turkish Lira grew by 68% despite Parcel volumes being down by 9%. The company being in a decent profitability point, I would say, established average was really down from levels that were far above this average in 2021. In euro terms, I already mentioned strong depreciation of Turkish Lira at the end of 2021 weighed on our revenues and our earnings after 2018 into euros terms and overall, we lost around EUR 40 million revenues in the cargo business despite the 5% to 8% growth in Turkish lira. Moving to strategic pillar #3, the growth in the consumer and retail segment. Here one of our priorities is building up a very focused risk-averse financial services business on the Bank99. We were aware that we launched this bank on April 1. Out of the home office, which were locked down, we will celebrate the third anniversary in a few weeks -- actually in 2 weeks after 3 years now and acquisition of the Austrian retail business of ING. I think we have a bank with critical mass, 260,000 customers, balance sheet of EUR 3.2 billion. Credit portfolio, both consumer and mortgage loans of EUR 1.6 billion. And investment asset management business of around EUR 500 million assets under management. I think, particularly worth highlighting here the increase in interest income from almost 0 in 2021 to EUR 34 million in 2022. This has to do with the position of the loan portfolio, but also with the change in the interest environment, whereas a year ago was a negative interest rates for Austrian National Bank. We are now earning interest on the deposits we hold for our customers and we've also built up the bank book. And it shows that there is quite a potential interest rate in the integrated environment provides tailwinds to the bank. And given this, we are quite optimistic this year turnaround for the bank in '23 -- to see a breakeven for the bank in 2024 and a substantial step from the around EUR 29 million losses that we incurred this year compared to even percentage for the current year. Moving to Page 21. As part of our consumer strategy, moving back to our Postal business, we have quite early impact on self-service solutions. You see here the increase both in number of facilities, but also, more importantly, number of parcels that go through these 24/7 self-service solutions, providing both customer benefit has not been 24/7 access to postal services. And at the same time, productivity improvements in cost savings because the most intense part is that is taking back to the post office when the consumer is not at the home or the consumer has left, we have additional process cost and 23 million parcels to our self-service solutions last year, and we build out this base of services. Now moving to Page 22 and moving to the green arrow in the center of our strategy, the topic of sustainability. We have established a comprehensive sustainability measurement program, pivotal program along the 3 dimensions of economy and customers will be try to make our product and service offering more sustainable, as I mentioned environment and climate where lighthouse projects such as e-mobility green delivery in some areas and other measures are I think the proof in the demands of people and the social. This portfolio of activities constantly being renewed and accelerated. Page 23 shows you the improved lighthouse projects that we have been pursuing since quite some time already, topic #1, the electric mobility the expected mobility in Austria last mile not by any new combustion engine vehicles, but only the electric vehicles as a result we now have more than 3,000 electric vehicles in our fleet. The target for this year is to increase to 4,000. And by 2030, our aim is to have eliminated the last combustion engine. Second lighthouse project is photovoltaic facilities. By the end of last year we were around 4 megawatts in [ the scope base ]. The target for this year is to end up with around 8 megawatt peak, it could mean that roughly 10% of our electricity is self-generated by the end of '23 and the target for 2030 to generate around 1/3 of our electricity through photovoltaics. Page 24 shows you some of the progress we have made in nonfinancial indicators or part of the page CO2 emissions on various dimensions, the messages that in Austria, where we have a very good data quality, we, every year, make a step in the right direction. Last year total emissions down to 2%. Emissions relative to revenue or relative to transported tonnage down 2.1% to 2.6%. CO2 emissions, including Scope 3 shows an increase. I think here we have to be frank and admit that our database is not yet as robust as we would like to be a particular historic database with particularly about emission of other emissions of subcontracted delivery partners in countries like Tukiye. Of course, the measurement on the modeling is refined every year. I think at least 2022, we have a decent quality, but we would not see those changes reflecting our good progress. On employee and social indicators, I think, across the board, development in the positive direction, we in leadership position, share of women in total staff. The biggest challenge being employee turnover, where we have not moving in the right direction, the reason for this being among other things a very hot postman labor market where almost any business, be it small restaurants or big industrial groups have challenges finding and retaining on the people they need. Moving to Page 25. This was now the second year where we had applied the EU taxonomy regulation after having to report the taxonomy eligibility figures last year, this year has to evaluate the share of revenue CapEx and OpEx that was not only taxonomy eligible but also compliant. You see here the figures on the right-lower corner revenue around 33%, CapEx around 20%, OpEx around 7.4%. I think we have to add that this regulation is still evolving and including specific rules that are hard to understand and so quite counterintuitive results. For example, we could not -- could not declare our electric mobility fleet as taxonomy compliant because -- why? Because there is a do not significant harm factor which says that we have to use the most energy-efficient tires. Austria is a Alpine country where we're using all-year tires that also fulfill the legally required winter tire requirements. As a result, we did not achieve the efficiency and noise level requirements under the do no significant harm regulation and could not declare our electric mobility as taxonomy compliant. The other example is that for CapEx in particular building CapEx to be taxonomy compliant, you have to prove that all the -- that all the garbage during the construction phase of new building is 70% at least in the factory, there is no standard how to prove this. We are using the highest standards in my opinion of our affiliates, our logistics buildings of course, but it was this proof of the of construction garbage that we could not match and accordingly, we picked the conservative approach and came up with those numbers. Now a point more reflective of the ambition and activities that we have in place are the ESG ratings that we get from different rating agencies, as shown on Page 26. I think we've typically come out substantially above peers and typically among the top group of companies in our industry. I think we're particularly proud of the impact on the CDP A list, last year being among the top 1.5% of companies rated by CDP. Let me now move to a little bit more detail on our group financial indicators and will go quickly through the rest of this presentation -- through the rest of this presentation. Page 27 summarizes the most important of FIs on revenue, EBITDA margin slightly up. EBIT margin slightly down due to higher depreciation level. Earnings per share down a little bit stronger due to one-offs in the financial income. And operating free cash flow is at solid level of EUR 183 million. Page 28 shows our groups income statement components in details. And the details here and -- they are more quite directly into our segment details of Page 29, our Mail division, Letter Mail and Business Solutions down minus 4%. So as I already commented, quite resilient with revenue development compared to previous year, improving from quarter-to-quarter, also supported by the price increases I mentioned. And Direct Mail down minus 0.7%. Here, the development rather in the opposite direction, recovery effects after the pandemic in the first 2 quarters then pressure from rising energy and paper costs causing our customers flow effect on Direct Mail in Q3 and Q4 or for the year at minus 0.7% I think are reflecting a quite resilient Direct Mail. Moving to Page 30 shows the P&L highlights of our Mail segment. Revenue, as I already commented on at minus 0.5%. EBIT margins at good 12.9%. Moving to our Parcel & Logistics division on Page 31 for segment revenue down 2.5% with Austrian and Eastern Europe up in lower single-digit numbers, firstly, for the already-mentioned reasons, volume decline and Turkish Lira development down 13.4%, close to the segment logistic solutions down 13%, this is due to certain pandemic one-off revenues, including logistic coming down last year and this year, probably coming back to 0, not for the full segment but one-off revenue. Page 32, Parcel & Logistics division was EUR 88.8 million and an EBIT margin of 7.3%. I think quite respectable results in the fiscal year was lower than the record year of '22. But our Parcel segment remains a strong second pillar next to the Mail segment. Retail & Bank division for this year, revenue up 64% with the pure financial services income increasing by factor 2.5. Of course, the inorganic impact, please remember that ING, that the closing of this transaction placed in December 2021. So in 2021 we only have 1 month of inorganic revenue in the -- in over in 2022 in 12 months. The inorganic impact was substantial, but we also had organic growth -- growth through the interest income and the change in interest environment, which I mentioned. Page 34 shows you that we are still in a rental loss. Rental loss note here was minus EUR 26.7 million EBIT for the segment. Target for the bank in the segment is breakeven in 2024 and 2023, a significant step towards breakeven. Page 35 shows you our balance sheet. I think the summary is we continue to operate of the property on a conservative balance sheet, it was run substantially over the last years with our financial services asset and, of course, also liabilities. Now that the bank is exceeding a balance sheet of EUR 3 billion. We see that in blue, the equity was EUR 710 million, quite stable over the last years. And I think overall, we have limited leverage. So the net -- so the real financial liability, meaning loans, bank loans and other loans totaled EUR 150 million. The rest is IFRS liabilities, provisions and other nonfinancial liabilities. And on the asset side, I would like to highlight a very small level of intangible assets and goodwill, I think there is a quite environment type of risk. Page 36 shows you our usual cash flow summary. Operating free cash flow in the middle. So this is a free cash flow before growth CapEx and acquisitions at EUR 183 million. This is the cash flow where we want to cover our dividend with some buffer and later come to our dividend proposal in absolute terms, it's EUR [ 120 ] million. You see here that our dividend is well covered by this operating free cash flow. We suggest a look at the gross CapEx to be covered by our strong balance sheet, given that this is of onetime payout over onetime FX as part of this already-commented major comparing with expansion growth. Moving to our dividend proposal for our AGM on Page 37. The proposal is EUR 1.75. We stick to our dividend policy to pay out 75% of group net profit. The ratio is substantially higher at 92%. The small decline reflects 8% EBIT decline that includes this dividend proposal. We have at least in the third substantial crisis, financial crisis 2009/2010 pandemic and now energy, Ukraine crisis, however you want to call it, I think moving in the third crisis that we deliver on our commitment to payout in regards to dividend and especially operate business model, which is able to deliver substantial revenues and earnings also in difficult times. I think Page 38 summarizes our track record and again, reflects what I've just said, 13 years of stable and slightly growing revenues, despite a continually structural declining Mail business. Stable, slightly expanded profit margins. I think we've met our guidance every year and paid out an effective dividend policy, as mentioned also in substantial economic crises and have made progress in decarbonizing our logistics. Let me close on Page 39, with our outlook for 2023 at this time of the year, of course, a little bit cautious and more uncertain than later in the year. Overall, I think inflation will be the major challenge this year. We have productive wage agreements coming up this effective date July 1st. On the revenue side, of course, we have limited visibility and after 3 years where this time of the year, we have something substantial -- substantially new that we did not have in our budgets coming our way. I think we are a little bit cautious. Still this year has started in a quite controlled way and we are optimistic that we can deliver growth for group revenues in the lower to middle single-digit rate range. Mail probably a slight decline in growth in the upper single digit range. The aspiration clearly is to further grow in the Retail & Bank segment, also this pain point on the interest rate side. I have already mentioned our CapEx guidance to be in the range of EUR 100 million to EUR 200 million. And on the earnings side, the objective is to come as close as possible to the previous year level. And of course, we have only have 3 for month of the year. And I think we'll be able to give a little bit more clarity when we communicate our Q1 results in May. But I would say overall, we do not look that pessimistic into the full year. And with those targets, I think we, of course, are also committed to delivering further another year or so in on our dividend value proposition. So thank you very much for your attention, and I'm very happy to take questions now.

[Operator Instructions] And the first question comes from Ivar Billfalk-Kelly from UBS.

It feels like it's been a while since we spoke about Amazon in-sourcing. But is it fair to assume that your loss of market share this year is down to increase in-sourcing from Amazon? Or are other players also taking share from you? And within that, please could you share what proportion of volumes are currently delivered for Amazon? And how much of this might be at risk from future increase in in-sourcing? Secondly, within the banking division, there's progress being made there. But beyond the breakeven target for 2024, what's the ultimate long-term target of profitability? And how has that changed in the context of higher interest rates? And maybe finally, just a high level in the past, you've spoken about your property portfolio and some ongoing development. Can you give us an update on what the current plans are and what the likely long-term financial impact might be of that?

Well, thank you for your questions. Ivar. You're right that we have seen now 3, 4, 5 years of Amazon in-sourcing and Amazon building out their logistics network, many successful areas of Austria. And of course, all the Parcel numbers that we have shown include a share of Amazon volumes that has been declining. We are not 100% sure whether the market statistics that I have shown, in the middle of my presentation, fully reflect these numbers. These are numbers that are selected from the individual players and with more transparency than what other market players have forwarded to this to the financial agencies. But I think at the same time, looking at what Amazon has done in recent months, I think speed of their build-out of their logistics networks seems to have slowed. And I think we are -- at least for the time being, we are -- we are not budgeting substantial further losses of market share where that's concerned. That's question number one. Question number two on the detailed shares of what Amazon volume we retrenched. But if we don't have the insight into Amazon really that I cannot ask you -- cannot give you the details. On the banking side, of course, the aspiration is to go beyond breakeven and contribute profits to the group. I think our business plans show double-digit million figure as of 2025 as contribution to the group. I'm not in a position to make a forecast on interest rates for the next 3 years and beyond, I'm a little bit hesitant to lean out too much with comment on that topic. Of course, the current environment provides tailwinds and if it helps along rollout remains to be seen. I think probably we can expect it to last longer than we would have expected a year ago. And on property, you are right that we have a -- on the one hand, a constant portfolio cleanup on smaller pieces of real estate that has happened over the last year and will continue to happen in this much smaller part of real estate being put to the market and generating single euro digit contribution to cash flows and also extraordinary income every year. At the same time, we have 2, 3 big real estate projects. One is coming to an interesting phase our project on the Central Station in Linz, where we had -- where we have left a logistics center a few years ago and have issued an urban development project together with the city of Linz. We are now close to getting the permit to permanently changed this from a logistics permit to have a much bigger and more dense permit allowing office buildings, residential use. And once we have achieved that permit, I think we will also look at how to realize some of the value increases that is -- that comes with this change, but that is probably for the next year.

And the next question comes from Marco Limite from Barclays.

My first question is about volume repricing, both in Mail and Parcel. So if you could give us, yes, broad guidance about average price increases for Parcel and Letters and whether you think you will be able to pass through inflation? And the second question related to the same topic. And of course, to your answer, given that you are guiding for Parcel & Logistics revenues up high single digit in 2023, I would be interested to know what's your volume growth assumption for 2023? And third question, there are some industry data that show that the start of the year has been quite soft across Europe. So yes, just wondering about exit rates in January and February for Parcel volume.

Okay. Thank you for your questions. I think on the pricing, I think across the product portfolio, of course, as you rightly said, the aspiration is to forward the inflationary pressure that we have to our consumers and to customers, in particular -- for business customers, most of our customers are business customers. And of course, as you know, we have here different product segments from Mail to Parcel and some are regulated there. We have a few framework where we need a cover. I think this is a conversation, that is mostly coming a bit easier to that approval. And we've shown that with the increases that we have made in Q3 and Q4 and before last year and also start of the year, of course, the speed of cost increases, also the frequency of our price adjustments in the regulated areas will increase and something probably will have to happen this year again. And on the other side of the portfolio, we have bilaterally negotiated contracts with very large customers, where of course, also the ability to forward price increases is a little bit lower than on other areas of our product portfolio. I think across the group, the target clearly is to forward inflation. We will not have a linear development of price increases as opposed to cost increases over the quarters because we will have a substantial cost uplift in Q3 when our collective wage agreement that we are still -- that we still have to negotiate in the coming weeks is expected to happen, whereas the price increases on the regulated side partly have happened the quarters mentioned last year, and we will see when we get approval for the next price increase on the Mail side. And on the Parcel side, it's typically start of the year or changes in some areas also throughout the year. So expect some nonlinearity of margin development also over the course of the year. But overall, I think the aspiration is at least to hold the margins in our core business across the product portfolio in the order of magnitude, where they are maybe with some time lag in between and I think that is -- with 11% inflation we have in Austria, that is difficult to simultaneously forward this always to the customer side. I hope for your understanding there. And that we will show quarters where margins will be under pressure and things like that. Volume growth, 2023, I think we hit -- our guidance for customer revenues is in the higher single-digit margins. So we do expect the volumes across the group to grow at least a little bit here. And I think we'll have more clarity once we see a full quarter. The development over the last months has been quite volatile. You've seen it last year, we had 8% volume growth in Q3, substantially lower growth in Q4. Also the last 2 months, I had a higher number and a lower number, and I'm not 100% sure whether the higher or the lower number is reflective of what we will see for the next year. So visibility actually in this era is limited, yes? And I think all the industry, in particular, our customers, the online retailers, I think they don't have this visibility for themselves. Yes, in start of the year. I think overall, we had a controlled start. I mentioned that in the new year, different from the last 3 years, where at this time of the year, we knew that we could pretty much put our plans inside. And until we have to make new plans for a very different environment, currently, the most important planning assumptions seem to hold, with inflation being a little bit higher, which means that the prices a little bit more. But overall, I would say we had a controlled start into the year, and that's why we come out with the guidance we have given.

[Operator Instructions] I'm sorry, there was one question that came up from Teresa Schinwald from Raiffeisen Bank International.

Could you remind us of the exchange rates you're basing your guidance on? Is it the current one for the Turkish lira? And can you maybe also provide us with the sensitivity regarding the Turkish business and the currency development?

Well, Teresa, I don't have the exact number in my head. But clearly, it is above the TRY 20 per euro for the full year. I think we also have to point of the complexity of the hyperinflation accounting. We are using basically -- which is a quite complex standard. And basically, it's the interest rates at the end of the exchange rate at the end of the year that is relevant. Because every month, you're basically readjusting the prior month to the current exchange rate. At the same time, you're inflationing -- indexing the revenues of the last month. So it's a little bit complex and even for ourselves, not 100% transparent standard that we have to use in the price since last year. Sorry for making a little bit complicated answer to this simple question. So it's definitely higher than the TRY 20 because we think the inflation rate has now been holding for almost 10 months, quite stable despite much higher inflation in third year against the Euro zone. So it is definitely higher. And the sensitivity is that -- I think you can calculate solve around EUR 250 million in revenues and industry average, higher single-digit profit share and I think you can come up is the sensitive quite easily.

So there are no further questions now, and I hand back to Harald Hagenauer for closing comments.

So if there are no further questions, then thank you for participating in this call. If there are some further questions, don't hesitate to call us next days, we are available. Thank you, and good afternoon.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.