1World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Key Figures Austrian Post

Revenues: EUR 1,723.2m

Employees: ca. 26,000 FTE*

EBIT: EUR 93.7m

Austrian Post Group (Q1-3 2009)

Subsidiaries in 11 countries

Revenue: EUR 561.3m

Employees: ca. 4.000 FTE*

Shipments: ~100m p.a.

* Periodical average

Parcel & Logistics Division (Q1-3 2009)

Services provided in 11 countries

* Periodical average

2World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Parcel deliveryBecoming part of the customers' sales process

3World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Market and Competition

2004 2007 2008 2009e 2010e

2004 2007 2008 2009e 2010e

5,3% 0,9%

CAGR 04 - 07

CAGR 07 - 08

National CEP-Markets 2004 - 2010(€ bn Turnover)

International CEP-Markets 2004 - 2010(€ bn Turnover)

23,627,6 27,8

30%32% 32%

70% 68% 68%

Express

Standard

+7,5%

+4,3% +1,4%

+0,1%

8,6% 2,2%

CAGR 04 - 07

CAGR 07 - 08

9,2

11,8 12,1

60%59% 58%

40% 41% 42%

Express

Standard

+8,0%

+9,5% +4,9%

+0,3%

29%-7,0%

71%

27,2

+- 0%

11,3

48%

52%-20,0%

+- 0%

- 2,2%

CAGR 08 - 09

-7,1%

CAGR 08 - 09

46%

54%

28%

72%

ca.27,0

ca.11,5

-0,7%

1,7%

-9,8

+2,8%

+0,2%

+3,6%

CAGR 09 - 10

CAGR 09 - 10

Market development 2009

■ Decline of European market volume by approx. 10%

■ Enforced (price-) competition

■ Switch from Express to (cheaper) standard services

■ Decrease of volume- and turnover, declining margins

■ B2C segment is (only) growth market

Competition 2009

■ Trend towards “cost-cutting” (fixed-costs, personnel, marketing, subcontractors etc.)

■ Increases focus on sales activities (aggressive pricing, special offers, new products etc.)

■ Increased focus on B2C Segment

Expectations 2010

■ Volume development is seen slightly optimistic

■ Expectation of stable prices, competition remains hard

■ Sustainable change of demand from express to standard

■ B2C segment as main market driver (due to rising revenues in e-commerce)

■ In 2010, most market participants will be seeking to grow cautiously while maintaining careful cost management

4World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Momentum in parcels in the past and expected development in near future

“The international air express market should recover this year after a 6.9% volume decline in 2009” (New study from aviation consultants Air Cargo Management Group)

“The global express market size is expected to reach US$209.92 billion in 2012, growing at an annual growth rate of 4.87%.” (Global Courier, Express & Parcel (CEP) Market - 2009 Edition)

Per capita expenses for Express- and Parcel services

“German mail order and online business grows 2 digit, whereas stationary trade is expected to grow 2% in 2010“ (German E-Commerce and Distance Selling Trade Association)

“Turnover in mail-order business reaches ~30bn in 2009“ (German E-Commerce and Distance Selling Trade Association)

B2C E-Commerce Sales of Major Global Companies, 2006-2008

Country

of Origin 2008 2007 2006

Amazon.com USA 13.098 10.842 8.537 +29.2 +38.5

Otto Group Germany 5.500 4.889 4.048 +12.5 +20.8

Staples USA 5.262 4.093 3.905 +37.5 +14.3

Office Depot USA 3.280 3.581 3.427 -2.0 +14.0

Dell USA 3.280 3.069 3.108 +14.3 +7.7

Arcandor Germany 3.500 3.000 n.a. +16.7 n.a.

Hewlett-Packard USA n.a 2.485 2.471 n.a. +9.7

Tesco  UK 2.393 2.339 1.792 +18.8 +31.0

OfficeMax Inc. USA 2.119 2.339 2.232 -3.1 +14.3

Apple USA 2.460 1.973 n.a. +33.3 n.a.

Growth %

'08/'07

Growth %

'07/'06Company

Web Sales (bln EUR)

Source: yStats.com

0

50

100

150

200

USA AU JP NZ

EU-27

W.E

urope

S.Euro

pe

E.Euro

pe

19982008

in EUR

5World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

What do our customers expect?

Customer Expectations remain constant for about 20 years now …

1= not important 2= less important 3= important 4 = quite important 5 = very important

Reliability features

Price

6World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

What do we do? (1)

Market Research

DesignProduct-

ion StorageMarketing

TradeDelivery

Customer

Extend the value chain …

7World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

1. Consult the Experts

3. Cut WISMO (“where is my order”) Inquires

2. Automate Tasks

4. Extend Your Focus to the Return Trip

5. Get a Grip on Inventory

Top 10 Shipping Tips for 2010 By a Vice President of Customer Technology Marketing of one of the Integrators

6. Compete on an International Level

8. Integrate Your Shipping Processes

7. Ship to the Right Address

9. Pick the Right Mode of Transportation

10. Stay Connected

What do we do? (2)

8World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

And this is how we did (1) …

“With less staff due to layoffs, it is no wonder that this year, we saw an increase in the error rate.”

“For the most part, our readership made great strides in decreasingcosts. But they paid a price for those decisions.”

Source: www.PARCELindustry.com

9World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

And this is how we did (2) …

January 2010 Snapshot of “Verkehrsrundschau” in Germany

18 (mostly small) companies rank higher in Customer satisfaction than any of the key players in the (German) Market

19

20

10World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Parcel deliveryBecoming part of the customers' sales process

A good crisis wasted

11World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Our Thinking vs. Customer Expectations

FactoryProduct-

ionCustomerFactoryFactory

Product-ion

Product-ion

CustomerCustomer

Industrial Thinking

Innovation CustomerFactory InnovationInnovation CustomerCustomerFactoryFactory

We need to turn the process around

Market Research

DesignProduct-

ion Storage Marketing Trade Delivery Customer

Extending the value chain

12World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Innovations?

„The biggest innovation in the (financial) industry over the past 20 years had been the cash machine.“

Paul Volcker, Former Federal Reserve Chairman (1979 to 1987), now chairman of President Obama’s Economic Recovery Advisory Board; during a conference of high-level bankers on 8th December 2009

13World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

Customer expectation ?

1= not important 2= less important 3= important 4 = quite important 5 = very important

My Logistic partner creates offers which inspire me instead of only managing my demand

My Logistic Partner does not “sell” flexibility, but changes processes where needed to create value for my customers

My logistic partner supports my products

My Logistic Partner works with me to find solutions which be import for my customers in future

My Logistic partner understands my market

My Logistic partner helps me to sell more

My logistic partner understands different geographic markets and offers more than “one size fits all”

Illustrative

14World Mail & Express Americas 2010 | 23rd February 2010 | C.-G. Mende | Austrian Post

A (good?) crisis wasted