TNT MAIL Business update. Harry Koorstra 2 December 2010

Transcription

1 TNT MAIL Business update Harry Koorstra 2 December 2010

2 Agenda Business update Mail Further details - Mail in NL - Parcels - International Outlook 2

3 Mail as a stand alone company What continues Strong senior team Solid cost management Execution of present Parcels strategy Further develop International networks Manage value added services to support Mail NL Focus on profitability What is added Accelerate e-commerce and fulfillment services (brand, competences) Portfolio expansion options Aggressively develop network feeders for parcels business Focus on Cash EBIT and OFCF with increased transparency Proactively explore partnerships in line with Postal consolidation 3

4 Strategy elements of stand alone Mail company (1) Mail has been setting the pace for over 20 years in industry restructuring plans Letter Mail 2000; Restructuring of Post Office Network; Automated sequence sorting; Operational separation of parcels and letter mail delivery and sorting; CLA for mail deliverers, and will continue with its new business model based on three peak days, centralised sorting, dedicated final mile delivery and part time labour organisation Mail has realised 529mln Master plan cost savings in the period 2001 YTD 2010 and will aim to deliver a further 220 million cost savings in the period and a further 210 million up to 2017 in line with original ambition Management has a recognised strong track record in delivering cost savings in time 4

5 Strategy elements of stand alone Mail company (2) Strategic view: Offsetting risks in market trends Secure existing delivery business via fulfilment and own networks Broadening and upgrading portfolio and lock-in of existing customers Securing long term continuity via new platforms Shift from product to solution focus via value chains 5

6 Strategy elements of stand alone Mail company (3) The European Postal market is being privatised step by step driven by - need for more commercial incentives - shortage of cash of governments Market consolidation is likely and benefits can be found in - combined management of volume decline - joining parcels business and international networks - expansion of home market for chain related services and new business efforts Overview privatised European mail companies >2010 Netherlands Germany Austria Belgium UK Ireland Sweden/ Denmark 6

7 Integrated growth portfolio Integrated and balanced Mail portfolio Mail in Netherlands Growth Returns Manage decline through solid execution Master plans Grow value added and chain (e)-related services Parcels Growth Returns Grow Parcels whilst improving profitability Grow network feeders: shop logistics; e-fulfillment; special networks International Returns Growth Improve profitability international networks International sales channel for cross border parcels Capture network and sales synergies Capture sales synergies 7

8 Board of Management CEO Harry Koorstra Board of Management HR Gérard Aben CFO Jan Bos Mail in NL Harry Koorstra Parcels & International Herna Verhagen 8

9 Board of Management CEO Harry Koorstra Board of Management Executive Team HR Gérard Aben CFO Jan Bos Mail in NL Harry Koorstra Parcels & International Herna Verhagen Operations Commerce Cendris Parcels United Kingdom Germany Italy Spring 9

10 Agenda Business update Mail Further details - Mail in NL - Parcels - International Outlook 10

11 Update market Volume development TNT Post Annual volume decline (%) * 2010 YTD Q3 04 VGP quality figures (2010) * Cumulative volume development Volume development competition (millions) Market shares % % 80% 24h 48h 72h Bud get Tu Fr Tu Th VSP 86.7% 85.8% 83.4% TNT Sandd DHL Global Mail TNT Post Competition 11

12 Master plan 3 defines final reset of Mail infrastructure Key features Mon Tue Wed Thu Fri Sat Next week 3 days Next day Three peak days for delivery non time sensitive mail products Low volume days to accommodate next day delivery demand Sorting and preparation to be centralised and fully separated from final mile delivery Final shift to part time labour organisation 11,000* jobs to be shed 1,900* FTE voluntary mobility 3,100* FTE forced redundancies All decentral sorting depots to be closed * Subject to negotiations 12

13 Update trade unions: still looking for solutions Trade unions have confirmed the necessity and direction of the reorganisation They need time to understand the details of the implementation - (social impact, timing, ) Strikes Key issues Postal sector investigator Vreeman Complex reset postal infrastructure Management and unions are still on speaking terms How to dampen social impact Still looking for (work to work) solutions Will advise the government on how to reconcile fair labour conditions, the position of TNT Post as provider of the universal service within a well functioning liberalised postal mail market and the employment effects of the Master plans of TNT Post 13

14 Regulatory environment Netherlands Issue Tariffs Mandatory network access Description OPTA has approved first starting tariffs of postal services. Second phase tariff regulation sent to Parliament OPTA has advised the Dutch Postal Regulator against mandatory network access Universal service Dutch Postal Regulator has started an evaluation of the required service levels of the USO TNT expects reduced demands of the universal service obligation over time 14

15 Developments Mail in NL Transformation Post Office network 2500 Duizenden 25 Development FTE operations 0 Annual Master plan savings ( million) Traditional Post Offices Shop in shop Post Offices Cash EBIT development million Traditional mail men Mail deliverers FY 09 Q4 09 Q3 10 Revenues ~2,590 ~2, Cash EBIT ~370 ~310 15

16 Parcel Services at a glance Domestic Parcels Netherlands Market shares Total market B2C B2B % 57% 16% Customer demand Customer demand International Supporting network services 16

17 Excellent historic performance of Parcels Net sales ( million) 600 EBIT ( million) Volumes (million) Outsourcing (%) % 60 0% TNT own personnel Subcontractors 17

18 New Parcels infrastructure TNT Pakketservice YoY %chg volumes 16% 14% 12% 10% 8% 6% 4% Volumes up more than 50% in 5 years 2% 0% YTD Q Current Hub and spoke based infrastructure 3 main sorting centres, 1 hybrid location 37 distribution locations Sorting equipment at end of technical life cycle at max of capacity New Web based infrastructure 18 depots with full sorting functions Integrated sorting and distribution Allows for +40% increased capacity 18

19 Rationalisation Emerging Mail Portfolio on track From unaddressed business in Other countries to addressed operations in UK, Germany, Italy Lines of business million Country overview million 1,500 1,000 Unaddressed Addressed Mail related 1,500 1,000 UK Germany Italy Other countries Rationalisations are paying off Germany: - Reduced start up losses - Path to break even identified - Milestones Divestments in unaddressed lines of business and in other countries Underlying figures International million million EBIT excl network expansion Germany EBIT FY 09 ~5 ~(40) Q4 09 Q3 10 ~15 ~(20) 19

20 Leading challenger with value opportunities in selected European countries Mail has a solid footprint in UK, Germany and Italy in addressed mail Mail has a unique business model in each country. Mail is able to increase its market share. Mail is in the best position to realise the maximum value of its presence in these countries, and benefits from: - Proven two way operational knowledge sharing - Cross selling - Platform to roll out parcel capabilities into a European parcels broker model Market volumes in Europe (addressed) Market volumes in Europe (addressed) Total TNT Post* Market Share Germany 21 * Volumes handled by TNT Post (2009) All volumes are presented in billions items 1 5% UK % Italy % 20% 23% Germany 24% 21% UK Italy NL France Other 6% 6% 20

21 Agenda Business update Mail Further details - Mail in NL - Parcels - International Outlook 21

22 Mail outlook (underlying * ) Q Q3 10 million TOTAL Revenues ~4,300 EBIT ~620 Operating Margin ~14% Cash EBIT ~360 Cash EBIT margin ~8.4% 2015 Outlook % * The underlying figures are at 2009 fx rates and exclude one-offs 22

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