The French La Poste and Swiss Post, two of the principal European postal operators, have announced their intention to combine their respective cross-border mail activities in order to further enhance and develop their international-mail business. The alliance could be operational in the course of 2012 in the form of a joint-venture company to be owned equally by La Poste and Swiss Post, and which would be positioned among the key players in this sector. This joint venture, which has been approved by the Boards of Directors of the two companies, is subject to all required regulatory approvals being granted.

International mail is a dynamic market with global revenues for 2010 estimated at more than EUR 10 billion. Over the last several years, in order to fully enhance and develop their activities in this sector, both La Poste (La Poste Global Mail) and Swiss Post (Swiss Post International) have built a solid international presence with subsidiaries and co-operative ventures in key international-mail markets such as the United States, the United Kingdom, continental Europe and Asia.

The two operators are complementary, both from a geographic point of view and with regard to the products they offer. They also share the ambition of offering global solutions to businesses that wish to develop in the international market.

By combining their expertise and networks in cross-border mail, La Poste and Swiss Post will further increase their capacity to serve their international customers, thereby strengthening their business dynamics and the value of their international investments.

The new company will be able to attract new clients by offering high-quality solutions that meet the growing needs of its customer base.

The new joint venture company will combine the strengths and values of La Poste and Swiss Post and will be headquartered in Paris and Bern. The new company will combine all cross-border mail activities of La Poste and Swiss Post, eliminating inbound and outbound cross-border mail business in France and Switzerland. The regulated universal service obligation of La Poste in France and Swiss Post in Switzerland will not be included in the joint-venture company. The joint venture is subject to all required regulatory approvals being granted.

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((La Poste)) ... “La Poste and Swiss Post confirm their intention to be a leader in the international-mail market in order to accompany their clients and partners in their development around the world,” says Jean-Paul Bailly, President of the La Poste Group

((Swiss Post)) “Both partners are complementary from both a geographical and market-offering point of view. The new company will thus provide the best available, value-added mailing solutions for its international clients,” emphasizes Jürg Bucher, CEO of Swiss Post.

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GROUPE LA POSTE

Groupe La Poste is a multi-national group with four principal operating activities: mail, express parcel service, banking, and the La Poste retail brand. In 2010, Groupe La Poste generated revenue of EUR 20.9 billion and employed more than 276,000 staff. Each year, La Poste’s 17,000 branches are visited by some 45 million individuals and 3.5 million business customers. La Poste sorts and delivers over 27 billion items per year. True to its values and public-service mission, and backed by the commitment of its postal workers, by 2015 Groupe La Poste aspires to become a European leader in local postal and financial services.

www.laposte.fr/legroupe

LA POSTE GLOBAL MAIL

Created in 1995, La Poste Global Mail (International Mail Division of La Poste) is a leading cross-border mail operator, with annual turnover of over EUR 700 million. La Poste Global Mail is established in the major outbound-mail markets with subsidiaries in France, the USA, the UK and Germany, and with sales forces which cover approximately 20 countries. Serving 170 countries through direct routes and with over 800 employees in France and abroad, La Poste Global Mail aims to be the partner of choice of French and international customers for cross-border mail, small-goods delivery and customer relationship management.

SWISS POST

Swiss Post is a publically traded company owned by the Swiss Confederation. The Group has 61,500 employees, with 7,700 staff members based outside Switzerland. In 2010, the Group’s operating income totaled CHF 8.7 billion and the operating result was CHF 930 million. Around 14% of operating income was generated abroad. In its domestic business, Swiss Post transports 2.4 billion addressed letters, 1.3 billion unaddressed items, 1.4 billion newspapers and over 100 million parcels each year and is a major player in Swiss retail banking.

www.swisspost.ch

SWISS POST INTERNATIONAL

Swiss Post International Holding Ltd. was established in 1996 as a wholly owned subsidiary of Swiss Post. The business unit has 1,250 employees in the USA, twelve European countries and four major Asian cities. Its operating income amounted to CHF 788 million in 2010, with an operating result of CHF 49 million. Swiss Post International offers a specialized range of cross-border postal products and industry-specific solutions for its international business customers as well as private individuals and business customers in Switzerland.

www.swisspost.com

Swiss Post International generated sales of EUR 303 million in the first half of 2011 and increased its operating result to EUR 22 million. After deducting extraordinary writedowns, the reported EBIT came to EUR 19 million. The communications service provider expects sales and the result for 2011 as a whole to be slightly better than in the previous year.

In the first half of 2011, Swiss Post International lifted sales slightly by EUR 3 million over the year-back period, generating a total of EUR 303 million. The company, which issues its reports in Swiss francs, adjusted its year-back results to the latest euro exchange rates for the purpose of comparison. In exchange-rate adjusted terms, growth has been generated primarily by international subsidiaries and the acquisition of new firms. Sales are still declining slightly in Switzerland. As was the case with sales, the operating result also edged up to EUR 22 million. The operating margin rose to 7.3% (compared to 7.1% the previous year). Nevertheless, as a result of extraordinary goodwill writedowns, the reported EBIT of EUR 19 million as of 30 June 2011 is below the year-back figure of EUR 21 million.

Growth as a communications service provider

"Owing to the strong economic activity in the first half of 2011 and thanks to the consistent implementation of our global sales strategy, we can expect sales and results for fiscal 2011 to be up somewhat on the previous year", says Daniel Bättig, Head of International Mail. Swiss Post International is focusing on steadily expanding its industry solutions and increasing its presence in regional markets. "Our growth is based on our offerings as an innovative and international communications service provider. We partner our business customers and enable them to optimize their value added."

Subsidiaries post excellent sales figures

Most Swiss Post subsidiaries achieved tangible sales increases compared with the previous year. With 30 subsidiaries and sales agents, the company is represented across the globe. Swiss Post International is continuing to penetrate its foreign markets. Partner companies are marketing services to business customers in decentralized regions of Germany, the UK, Ireland, Sweden, Italy and Spain. With a range of services aimed specifically at industry customers from the financial sector, distance selling, media/publishers and tourism, Swiss Post International is focusing on international growth markets.

International leader going forward

Swiss Post International continues to hold a leading position within the globally operating national postal organization. It remains in third position in the global, cross-border letter market, preceded only by Deutsche Post and French company La Poste. The wholly owned subsidiary of Swiss Post currently employs 1,250 people in twelve European countries, five major cities in Asia and in the USA.

Swiss Post uses decentralised digital newspaper printing, helping to safeguard resources and protect the environment. Two Swiss daily newspapers are now produced locally in holiday regions. Swiss Post is making a valuable contribution to protecting the environment, because resource-intensive transport by air is no longer required. With the innovative solution, publishers save the high shipping costs for delivery abroad.

The international edition of Neue Zürcher Zeitung, NZZ, is now available in Malta and Cyprus on the day it is printed. Swiss daily newspaper Blick, published by the Ringier Group, is also printed every day in Cyprus and sold locally in hotels, shops and from newsstands. “This new, environmentally friendly solution and the fact that the printing process is digital and decentralised make it possible to produce the newspapers locally on the actual date of publication,” says Carsten Vossmeyer, Head of Industry Press/Publishers of Swiss Post International. “Non Swiss publishers can also supply their newspapers quickly and environmentally friendly in popular holiday destinations abroad with the climate friendly solution from Swiss Post.”

Look and feel of a daily newspaper

Swiss Post flexibly manages the entire process for publishers. From forwarding print-ready PDF files to innovative printers to the distribution of copies and billing. “Publishers are able to focus completely on their core business and develop new target markets abroad,” explains Vossmeyer. The publications are printed locally, using four-colour printing on traditional newsprint. “The daily newspapers look and feel exactly like the copies holiday-makers would buy at home.”

Environmentally friendly solution for seasonal business

The environmentally friendly solution is particularly attractive for local newspaper publishers, and for small target markets which have a circulation of up to 1,000 copies a day. Decentralised digital printing enables publishers to develop such markets without high additional costs, gain new readers and further increase awareness of their publications. Vossmeyer says that especially during the holiday period “this solution is also attractive for subscribers, as they can continue to read their usual paper while on holiday without the environment being adversely impacted as a result of the newspapers being transported.” In Switzerland, foreign publishers also have the option of producing a small print run on Swiss Post’s latest digital newspaper printing equipment and delivering copies to their subscribers and newsstands on the same day they are published.

The Board of Directors of Swiss Post has approved the corporate strategy that was revised jointly with Executive Management. It is derived from the Federal Council’s strategic objectives for 2010-2013. In the next three years, Swiss Post will focus even more heavily on four areas of activity: communications, logistics, retail finance and public passenger transport. Swiss Post intends to consolidate its leading position in Switzerland in these four markets. Its strategy abroad provides for gradual, risk-aware growth. This will safeguard the business in Switzerland. The aim of Swiss Post is to offer its customers first-rate services at fair market prices, and also to provide a high-quality basic service and continue to be an attractive, socially responsible employer in the future.

Swiss Post has defined its corporate strategy for the next three years. The strategy for the Swiss Post conglomerate, which has been revised and approved by the Board of Directors and Executive Management, has been focused even more rigorously on the four core markets of communication, logistics, retail finance and public passenger transport. Swiss Post intends to consolidate its leading market position in Switzerland in these markets and achieve industry-standard returns for each of them. To defend the Swiss market against international competition, Swiss Post operates abroad in a risk-aware manner by focusing its activities mainly on the needs of Swiss customers abroad and providing them with access to the global network. With a low financial commitment, Swiss Post will endeavour to increase revenue gradually to a level in the tens of millions over the next three years, equivalent to approximately 15 per cent of anticipated total turnover.

Coordination with Federal Council requirements

The corporate strategy is derived from the Federal Council’s strategic objectives for 2010-2013. These provide for the safeguarding of basic services for postal and payment transactions in all regions of Switzerland and include targets for profitability, the increase of enterprise value and for a progressive and socially responsible HR policy. This statutory performance mandate has always been fulfilled extremely well by Swiss Post so far, according to reviews by owners and supervisory authorities.

Quantitative and qualitative targets

Swiss Post’s strategy includes measurable quantitative and qualitative targets. For example, Swiss Post is expected to make between 700 and 800 million francs in profit annually in the future. It needs these profits in order to remain an attractive and socially responsible employer, keep pension funds healthy, invest in the development of the company, strengthen equity and pay a contribution to the Confederation, and be able to fulfil its tax obligations in the future. In addition, a high level of satisfaction is to be maintained among both customers and employees. In terms of protecting the environment, Swiss Post has set itself a reduction objective: specifically, the units will introduce
a number of measures aimed at significantly reducing CO2 emissions. The strategy
assumes that the traditional postal business will continue to account for the lion’s
share of the profit over the years. By developing innovative solutions at the
interface of physical and electronic mail, it is focusing on future-oriented services
and new market opportunities.

Strategic thrusts for implementation

To ensure that its strategy is implemented successfully at the operational level,
Swiss Post is focusing on the following strategic thrusts: first-rate services for
private and business customers, fair-market prices, sustainable and profitable
growth, socially responsible cost efficiency, and optimum use of the regulatory
framework in force. Swiss Post is now a robust and prominent Swiss service
company. Its future economic success will create ideal conditions for continuing
to ensure a high-quality basic service. Swiss Post regards the mandate to provide
the basic service as an opportunity to prove that the trust placed in it will continue
to be justified in the future.