La Poste perspectives Daniel Le Goff Deputy Director...

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Worldbank Conference/New Dehli

La Poste perspectives

Daniel Le Goff

Deputy Director International Development

June 15, 2005

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La Poste, outlines

State Owned Enterprise since 1991

320,000 employees, 200 subsidiaries

17,000 branches all over the territory

A new regulatory framework

Universal Service provider

Customer oriented organisation

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3Transposition of UE Directives : the French Postal Law

In France, until now, the State has played the role of the regulatory authority

New regulation authority (ARCEP) : 6 months after the vote (November 2005).

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Content of the new law

Perimetre of universal service offer

La Poste, universal service provider

Financing of the universal service

Price-cap and Quality of Service

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The European environment

An ongoing process of liberalisation

An increasing pressure of competition

An increasing effect of substitution

A changing behaviour of customers

Permanent need of adaptation

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Among the largest postal operators

56.456.4

0

10

20

30

40

50

6043.243.2

18.718.713.213.2 12.612.6

Turnover € billion (2004)Turnover € billion (2004)

220220

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The European Mail Market

La Poste18,5% Royal Mail

16,5%

Deutsche Post19% Poste Italiane

7%

TPG7%

Autres32%

Total Value of the market : € 57.5 bn

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Breakdown of revenue 2004

0

10

20

30

40

50

60

% of turnover

LettersFinancial ServicesParcels/ExpressLP Grand Public

58.2 %

23 %18.7 %

0.2 %

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StreamliningStreamlining

RegulationRegulation

CompetitionCompetition

SubstitutionSubstitution

Economicsituation

Economicsituation

Factors having an impact on mail volume

Anticipation 2004-2007 : -10%

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Becoming global and offeringsolutions on our 3 markets

Our 3 markets

- Direct Marketing

- Document and Mail Management

- Written communication for individuals

Our choice

- Being leader on the 3 markets

- With a clear position on each market

- Offering solutions that help businesses growth

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For individuals, making mail easy andsimple

1. An accessible and personalized offer

2. A simplified posting

3. Diversified ways of acceptance

4. A reinforced secured offer

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Outsourcing of document management : the trend has been confirmed

In house document management represents a cost of 5 to 10% ofturnover

Outsourcing has seen an annual 30% growth during the past fewyears

67% of companies and 70% of French major accounts usedoutsourcing in 2002 compared with 60% in 1999

According to UPU studies, in 2005 hybrid PC/Web mail shouldrepresent 6,5% of the total volume of postal mail

Its annual growth is estimated at almost 30% in the next 4 years

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Increase our sales offer andmodernise production

MailMail

Become one of themajor bank in France

FinancialFinancial ServicesServices

Adapt our 17,000 post offices according to new way of life

Post offices NetworkPost offices Network

Secure our 3rd rank in Europe and improve our

competitive edge

ParcelsParcels

La Poste Perspective : 2007 a key milestone

HugeHuge investmentsinvestments

3.4 3.4 €€ billionbillion ModernisationModernisation of production facilities, transport and delivery networks

20072007

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- Re-defining the mail process (streamlining sortingfacilities, transport and delivery networks)

Focusing on quality of service improvement, provision of taylor-made services with a committment regarding delivery times for business customers and direct marketing offer

Launching new added value services matching withcustomers needs (Maileva, electronic registered mail, track and trace, etc…)

Increasing revenue, a permanent objective

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Focusing on costs reduction

Whatever the activity taken into consideration

- Mail services

- Parcels & Express

- Financial services

- Retail network

decision makers will concentrate their efforts on reduction of costs in order to achievesustainable profitability

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Taking advantage of new opportunities

Developing financial services in creating a Postal Bank by January 2006 (providing housing loans without preliminarysavings)

Developing Parcels & Express activity in order to gain a worldwide coverage (today pan-European)

Getting benefit from new technologies in developing hybridmail solutions and e-commerce (54% growth in France in 2003 with a 6 € bn revenue)

Improving profitability of our post offices network (adaptation and flexibility)

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Key issues of the post offices network

-Serving the three businesses

-Adapting permanently the structure

-Improving customer access

-Downstream access issue

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Key figures : 3.5 million visitors/day

€ 2.6 billion sales in 2004

(14 % of turnover)

17,000 outlets

€ 4.4 billion in net funds

collect

28 million clients for financial services

80,000employees

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Breakdown of revenue and operations

Revenue Operations

85 % Mail 47 % Mail

12 % Parcels 6 % Parcels

3 % Others 46 % Fin Services

1 % Others

The provision of financial services enables to maintain a wide P.O. network

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Objective: Increase Advise to Customers

- 6 000 financial advisors promoting banking and insurance products

- 500 mortgage advisors for savings-linked home loans

- 450 family wealth advisors

- A new function: customer advisor

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Customer appreciation

Strenghs WeaknessesDense localpresence (92 %)

Waiting time

Efficiency of postoffice clerks (87 %)

Opening hours

Friendly welcome Modernisation offacilities

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Easier access

Cities % of outlets % ofpopulation

< 10,000 82.8 % 51 %

> 10,000 17.2 % 49 %

The network doesn’t fit with population settlement

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Easier access

% of outlets Daily activity

19 % Less than 1 hour

14 % Between 1 hour and 2h30

19 % Between 2 h 30 and 5h00

Customers are not satisfied

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Principles of network evolution

La Poste intends to 1. Maintain its 17,000 branches2. Modernise and adapt its network to reflect

changing behaviour3. Support social cohesion on a nation-wide

scale4. Optimise network access in collaboration

with local authorities

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Diversification of postal presence

- In densely populated urbanareas

- 550 outlets in 2004

- Wide range of ready to mail products in stationarydepartments of hyper andsupermarkets-

Partnership with hyper and supermarket

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Diversification of postal presence

34,000 tobacconists sellstamps

> 3,000 propose a widerange of ready to mai products

Remuneration based on percentage of sales

Partnership with tobacconists

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Diversification of postal presence

« Points poste », postal agencies

-Mainly in semi-rural andrural areas

-Over 500 outlets in 2004

-Local retailers providingmain postal services

-Remuneration on a monthly basis withpercentage on sales

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Diversification of postal presence

Community postal agencies

-Mainly in rural areas

-More than 1,500 agreementssigned

-Postal activity located in town halls

-Logistic backup by a nearbyP.O.

-Remuneration based on levelof activity

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Diversification of postal presence

« Allo facteur »

- In rural areas, service used by elderly

- Phone call required the daybefore

- Main counter operations providedat home

- Insured 6 days a week by 1,500 postmen along their route

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Refurbished post offices

• 5 years plan for refurbishing andmaintance of 4,000 P.O.

•Renovating, repainting, improving lightning andsigns

•Priority given to lowcosts improvements

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Conclusion

Whatever the challenges are I am confident in our capacity of adaptation and I do believethat mail business still has a future but nowdays, taking into consideration thechanges hitting the postal environment I amconvinced that diversification remains one ofthe most important factor of everlastingness.

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World Bank Conference/New Delhi

Thank you for your attention

daniel.legoff@laposte.fr