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  • Let’s get more specific and consider a post that:Retains its fixed cost and has fixed pricesIt owns all operations and is fully integrated along its supply chainIt maintains a letters network geared to large letter volumes and providing value mostly to senders for physical items.It does not leverage the information captured from its networkIt retains heavy social obligations and sticks to the core with few exceptionsIt is reluctant to partner and prefers to handle all innovation internally;It provides everything needed to deploy its services and retains international ventures.
  • Ec meeting 31 may

    1. 1. European Mail Industry Platform<br />The weight of print<br />In the invoicing balance<br />EC Meeting, 31 May 2011, Brussels<br />
    2. 2. a quick view on the postal sector<br />1<br />
    3. 3. PostEurop<br />50 European Public Postal <br /> Operators<br /> Linking 800m people daily<br /> Retail services – 175,000 <br /> counters<br /> Employing 2.1 million <br /> people<br />
    4. 4. Comparison Telcoms and E – Print and paper<br />Telcoms & EPrint & Paper<br />Key differences<br />Growing market Declining core market & competition with other media Residential revenue concentration Business revenue concentration<br /> Capital intensive Labour intensive<br />Out of Europe production European Production Based<br />Other differences, Post in focus<br />Easier capacity extension Extension limited by human factor<br /> Retail/wholesale No mandatory access<br /> Trans-national - EU top down Strong subsidiarity<br /> USO as start in the « ladder » USO as main business<br /> Renewed liberalisation discussion Liberalisation 2011 but yet inter-modal competition <br />
    5. 5. Business is sendingConsumers are receiving<br />From/To Business ConsumersTotal<br />Business 31 % 57 % 88 %<br />Consumers 6 % 6 % 12 %<br />Total 37 % 63 % 100 %<br />
    6. 6. 2<br />the context<br />-Declining core market and true competition<br />-Diversity of situations<br />
    7. 7. Declining core market & true competitionMore E-substitution to come<br />Domestic Addressed Mail Revenue vs. GDP (at market prices)<br />(Domestic Mail Revenue without Invoice to the State)<br />Acceleration of e-Invoicing adoption mainly in B2B sector<br />Start of the law legalizing e-Registered Mail<br />E-substitution:Unstructured doc. to email<br />GDP (inflation incl. – Base 100 = 1995)<br />Post Domestic Mail revenue (Base 100 = 1995)<br />Sources: Annual Financial Report of The Post SA 1993 – 2007, Strategic Plan forecasts, BNB, Federal Office of Plan, Ministry of Economic Affairs<br />
    8. 8. Declining core market & true competition<br />More recent years show a sharper decline for most Western EU PPOs<br />Domestic Mail<br />CAGR 2004-2007<br />Growth<br />Flat<br />Slight decline (< 1%)<br />Strong decline<br />Source: PostEurop data, UPU & Annual reports<br />
    9. 9. Declining core market & true competition <br />More recent years show a sharper decrease: TNT <br /><ul><li>Source: TNT annual report 2008 (p. 43)</li></li></ul><li>Declining core market & true competition … with fierce competition in large communication market<br />2009<br />Belgium<br />Year 2009<br />DM as fourth medium<br />with <br />a media share of <br />9,9 % but a strong ROI<br />Direct mail : 9,9 %<br />Sources Gross Media InvestmentsDM: DM pige (Mediaxim); other media: CIM-MDB (Mediaxim)<br />
    10. 10. Diversity of situationsMail dependency – Revenue Composition(2008)<br />Source: IPC, 2009<br />
    11. 11. 12<br />ESTIMATES<br />Diversity of situationsFixed costs (personnel costs)…<br />Personnel cost (2008*)<br />(Staff cost/ total cost)<br />* CZ, BG, HU, EE, LV,LU, SI, ES date 2007, SK date 2006<br />Sources: Study EC - ITA Consulting, WIK , info postal operators<br />
    12. 12. 13<br />ESTIMATES<br />Diversity of situations Addressed mail volume per capita<br />Domestic Addressed Mail volume per inhabitant p.a. (2007)*<br />Average 169<br />* AT & BE data 2008<br />Sources: Study EC - ITA Consulting, WIK , info postal operators<br />
    13. 13. 14<br />Diversity of situationsDifference between self-employed and employees…<br />*Defined as labour cost for a self-employed workerdivided by labour costs if worker were an employee <br />Sources: PWC report, May 2006 on ‘Postal Internal Market’<br />
    14. 14. Diversity of situationsInternet: an alternative?<br /><br />
    15. 15. 3<br />more EU regulatory initiatives impacting the postal operators<br />
    16. 16. Someconcreteexamples…<br /><ul><li>European regulators group for post/ERGP (DG Markt)
    17. 17. State aid & services of general economic interest (DG Competition)
    18. 18. Combating late payment (DG Enterprise)
    19. 19. Digital agenda (DG Infso)
    20. 20. E-commerce (DG Markt)
    21. 21. Aviation security (DG Mobility & Transport)
    22. 22. VAT (DG Taxud)
    23. 23. E-invoicing (DG Taxud)
    24. 24. Modernised Customs Code (DG TAXUD)
    25. 25. Postal & courier – GATS (DG Trade, WTO)
    26. 26. Data protection (DG Justice)</li></li></ul><li>Flexibility<br />Ambition Focus<br />1<br />4<br /><ul><li>Fixed Cost
    27. 27. Fixed Prices
    28. 28. Integrated
    29. 29. Variable Cost
    30. 30. Demand-driven </li></ul> Pricing<br /><ul><li>Structurally </li></ul> Separated<br /><ul><li>Internationalized
    31. 31. Full Service
    32. 32. Geographically</li></ul> Focused<br /><ul><li>Best Service</li></ul>Predominant Network<br />Core Value Provided<br />2<br />5<br /><ul><li>Letters with</li></ul> some Parcels<br /><ul><li>Parcels with</li></ul> some Letters<br /><ul><li>More Volume,</li></ul> Less Value<br /><ul><li>Most Value to </li></ul> Senders<br /><ul><li>Physical
    33. 33. Less Volume, </li></ul> More Value<br /><ul><li>More Value to </li></ul> Recipients<br /><ul><li>Hybrid</li></ul>Collaboration<br />Core Mission<br />3<br />6<br /><ul><li>Fast Imitation
    34. 34. Co-create and</li></ul> Partner<br /><ul><li>Traditional Core
    35. 35. Social Mission
    36. 36. Generate </li></ul> Information<br /><ul><li>Diversified
    37. 37. Commercial Mission
    38. 38. Own Information
    39. 39. Innovation
    40. 40. Go-it-alone </li></li></ul><li>Our strategy<br />4<br />Listen to the customer : sender and receiver<br />Rebalance the communication business, fromsenderbenefits to recipient value<br />
    41. 41. Price<br />Cost<br />Integrated<br />Letters <br />Network<br />International<br />Volume &<br />Value<br />Full Service<br />Sender/<br />Recipient<br />Physical/<br />Hybrid<br />Innovation<br />Info Ownership<br />Social/Commercial<br />Partnering<br />Core/Diversified<br />
    42. 42. Do not disturb?<br />We are changing…<br />
    43. 43. ChangingourCore…<br />TO<br /><ul><li>More Volume, Less Value
    44. 44. Most Value to Senders
    45. 45. Physical
    46. 46. Less Volume, More Value
    47. 47. More Value to Recipients
    48. 48. Hybrid</li></li></ul><li>The graphical value chain<br />5<br />
    49. 49. United we stand<br />5<br />3+<br />sectors covering entire value chain<br />million people employed<br />
    50. 50. To copewith 3 immediate challenges<br />Structurally<br /><ul><li>Substitution by electronic media
    51. 51. Sustainability misconceptions</li></ul>Cyclically<br /><ul><li>Recession-based budget cuts</li></li></ul><li>The misconceptions<br />6<br />
    52. 52. Do you have the global picture?<br />The mass adoption of e-invoicing within the EU would lead to significant economic benefits and it is estimated that moving from paper to e-invoices will generate savings of around EUR 240 billion over a six-year period[5]. Furthermore, due to the close link between invoicing and payment processes, the creation of the Single Euro Payments Area (SEPA) offers a launch pad for interoperable European e-invoicing schemes.<br />The Commission wants to see e-invoicing become the predominant method of invoicing by 2020 in Europe. The Commission is committed to working in close cooperation with the Member States and all other stakeholders who will need to play their part to achieve this target and create the right environment for the widespread deployment of e-invoicing.<br />Accordingly, this Communication addresses the following priorities:<br />- to ensure legal certainty and a clear technical environment for e-invoices to facilitate mass adoption<br />- to encourage and promote the development of open and interoperable e-invoicing solutions based on a common standard, paying particular attention to the needs of SMEs<br />- to support the uptake of e-invoicing by setting up organisational structures, such as national e-Invoicing fora and a European Multi-Stakeholder Forum.<br />COM(2010) 712 final<br />COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS<br />Reaping the benefits of electronic invoicing for Europe<br />
    53. 53. Do you have the correct image?<br />BENEFITS FROM ELECTRONIC INVOICING<br />Unlike paper-based invoices, e-invoices provide all data in digital format. Such e-invoicing offers substantial benefits over paper invoicing. It allows for shorter payment delays, fewer errors, reduced printing and postage costs and, most importantly, fully integrated processing. One distinctive feature of the e-invoice is therefore its potential for automation, especially if the invoice is sent in a structured format: e-invoices can be generated and transferred automatically and directly from the issuer’s or service provider’s financial supply chain systems to those of the recipient. Most of the economic benefits therefore do not arise from savings in printing and postage costs but rather from the full process automation and integration from order to payment between trading parties.<br />Furthermore, applying equal VAT rules on electronic and paper invoices is expected to reduce administrative burden on enterprises by up to a maximum of EUR 18 billion in the medium term as pointed out by the High Level Group on Administrative Burden[6].<br />Benefits from e-invoicing are also expected to affect consumers, in particular with regard to the convenience aspects of e-invoices in comparison with paper invoices. It should however be ensured that consumers with limited or no access to the internet should not be left behind and that consumers should always be allowed to ask for a paper invoice. In addition and in accordance with the EU Charter on Fundamental rights, e-invoicing should comply with the protection of personal data and the right of private life.<br />Finally, the environmental benefits of e-invoicing in terms of reducing paper consumption and energy costs for transportation are also significant, generating carbon savings which could amount to reductions in CO2 emissions of 1 million tonnes per annum[7] for the EU.<br />
    54. 54. Two industries, twoworlds…<br />7<br />
    55. 55. E-billing to save the trees and the earth? <br /><br /><br /><br />
    56. 56. E-billing to save the trees and the earth?<br />
    57. 57. And the consumer?<br />38.000 trees en 1512 tons C02 economy<br />
    58. 58. And the consumer?<br />
    59. 59. And the consumer?<br />A lot of customers say that they are not happy with the fact that their provider decide for them to send their invoice via e-mail... <br />“NOT ASKED and NOT DESIRED” <br />Source: Het Laatste Nieuws 02/12/2010<br />
    60. 60. Dematerialization «From atoms to bits»?1995 - MIT professor Nicolas Negroponte<br />Number of emails/day has increased dramatically over the last 10 years, but the number of post letters has only slightly decreased<br />Sources: Radicati Group, 2010; Mcafee, 2009; UPU, 2009 <br />
    61. 61. ICT and PAPER usage<br />Production of paper & board in CEPI countries, quarterly trend <br />2000 - 20101<br />Conclusion2:<br /><ul><li>Relatively small substitute effect
    62. 62. Large complementary and generational effect</li></ul>Sources: 1CEPI, 2010; 2Arnfalk, 2010<br />
    63. 63. Impact on resource extraction<br />GHG<br />BIO<br />TOX<br />TOX<br />Rare materials<br />Modern electronics contain up to 60 different elements1<br />800 laptops contain up to 1 kg of gold2<br />Intensive chemical refinement of materials<br />Water usage<br />250.000 M3 water is used for 1 tonne of gold3<br />Sources: 1UNEP, 2010; 2Umicore, 2007; 3CSIRO, 2007 <br />
    64. 64. Impact on resource extraction<br />GHG<br />BIO<br />BIO<br />BIO<br />Logging of mature virgin forests <br />56% of all woodsources in EU are PEFC and FSC certified1<br />Homogeneous replanting for logging<br />Source: 1 CEPI, 2009<br />
    65. 65. In Europe, only 15% of paper “raw material” comes from specific “thinning” (cutting of trees)<br />60% of paper production is made of “virgin” fiber<br />25% of these virgin fibers comes from specific “thinning”<br />Specific “thinning”<br />25%<br />Waste of forest industry<br />25%<br />50%<br />Sanitary “thining”<br />15% (= 25% of 60%) of paper “raw material” comes from specific “thinning”<br /> “Use of paper” DOES NOT mean “forest destruction”<br />Even environmentalist say that there is nothing wrong in using timber (large or small trees) for paper production, provided the forest is managed in a sustainable way<br />
    66. 66. GHG<br />TOX<br />Impact on production<br />Energy intense complex production<br />81% of life cycle energy use during production phase1<br />Chemical treatment<br />Source: 1Williams, 2004<br />
    67. 67. GHG<br />GHG<br />TOX<br />TOX<br />TOX<br />TOX<br />Impact on production<br />Production of pulp & paper<br />CO2 emissions have decreased by 42% per <br />tonne of paper pulp since 19901<br />Bleaching<br />COD used has decreased by 76.3% since 19901<br />Water usage<br />
    68. 68. Impact on usage<br />GHG<br />Continuous energy use <br />ICT GHG emissions are 2% of global total1<br />Global data centres GHG emissions comparable with those <br />of The Netherlands2<br />Sources: 1Gartner, 2007; 2McKinsey & Co, 2008<br />
    69. 69. GHG<br /> Impact on usage<br />Transport430 billion mail items send in 20091<br />Source: 1Arnfalk, 2010<br />
    70. 70. ICT sector’s current share of world greenhouse gas is 2% and it is expected to more than double by 2020<br /><ul><li>52% of the total energy used in the industry is biomass-based and the sector is responsible for 27% of the total production of biomass-based energy in the EU</li></ul>IT carbon emission breakdown<br />Source: Gartner – IT Vendors, Service Providers and Users Can Lighten IT’s Environmental Footprint, December 2007<br />A non polluting ICT vs a pollutingpaperindustry?<br />
    71. 71. GHG<br />BIO<br />BIO<br />TOX<br />TOX<br />Impact on waste<br />Landfill<br />Only 15% of global E-waste is recycled1<br />Yearly E-waste increase: 40 million tonner/year2<br />Quickly obsolete<br />Increasing life span of phone from<br />1 to 4 years decreases environmental impact with 40%3<br />Sources: 1Pike Research, 2010; 2UNEP, 2010; 3Umicure, 2007 <br />
    72. 72. Impact on waste<br />HGG<br />GHG<br />Landfill<br />Paper recycling rate in EU 2009: 72,2%1<br />Source: 1CEPI, 2009<br />
    73. 73. Comparing life cycles<br />2010 Sustainability Challenges<br />ICT and paper: linear versus circular system<br />15%<br />72%<br />
    74. 74. Mail and E mail Carbon Meter<br />
    75. 75. C02 EMISSION:<br />1 Letter mail = 2,0 times email<br />Simulating the effect of sending physical mail and email <br />
    76. 76. But…volumes are not the same !<br />Worldwide1:<br />430 billions paper mail<br />60.000 billions e mails (SPAM included)<br />Source: 1Arnfalk, 2010<br />
    77. 77. SPAM effect<br />Global CO2<br />email trafficup to 20 times<br />post letter traffic1<br />Source: 1Arnfalk, 2010<br />
    78. 78. BUT… !!!<br />
    79. 79. The electronic / graphical global picture<br />European basedindustry, fromEuropeans to Europeans<br />360° production system: fromsourcing to production, from production to recycling, fromrecycling to production<br />Complete master of ressources and energy<br />Investments in Europe, from Europe<br />A responsibleindustry, framed by certifications ( ISO, EMAS, FSC, PEFC, CarbonNeutral, … )<br />Regulated business<br />Non European basedindustry, fromoutside to Europeans<br />No 360° production system: no recyclingprocess, production conditions uncertained<br />No master of ressources ( Silicium? ) and energy ( nuclear? )<br />Investmentsoutside Europe<br />No certifications<br />No regulations<br />
    80. 80. Cloud computing, production, data centers, call centers…<br />
    81. 81. Sure?<br />2010 Sustainability Challenges<br />
    82. 82. The paper values<br />8<br />
    83. 83. Paperis the preferredchannel<br />Preferred media channel for relational communication<br />
    84. 84. P and e are complementary<br />
    85. 85. P and e are complementary<br />
    86. 86. Don’tunderestimatepaperplease…<br />
    87. 87. Don’tunderestimatepaperplease…<br />
    88. 88. Don’tunderstimatepaperplease…<br />
    89. 89. Don’tunderstimatepaperplease… <br />
    90. 90. Don’tunderstimatepaperplease… <br />
    91. 91. Don’tunderestimatepaperplease…<br />
    92. 92. The time for synergy<br />9<br />
    93. 93. We foster paper mail by promoting innovation in general and by creating the bridge between paper and electronic<br /><br />Addvalue to paper and prove synergies with electronic<br />
    94. 94. Our propositions<br />10<br />
    95. 95. Wemake a wish…<br />A fairview on the two media values withadvantages and inconvenients<br />Promotion of the advantages of the synergy of both media utilizedtogether<br />A review of figures based on sender AND recipients impacts and including consumer rights protection <br />A complimentarystudy on IT dependance for households and the cost impact of it<br />
    96. 96.
    97. 97. Sébastien HouzéMarketManager<br />E-mail:<br />Direct line: +32 2 773 11 95<br />