Brussels 2011: “Change is here to stay”
Delegates at a leading European postal conference heard that “change is here to stay” as the continuing drop in mail volumes forces postal operators to alter their strategies. An intriguing blend of senior executives took to the stage in Brussels on the first day of main conference at the 2011 World Mail & Express Europe.
The event – organised by Triangle Management Services – is currently taking place at the Conrad Hotel, in Belgium’s capital city. The main conference is operating under the banner: ‘Delivering Growth, Addressing Decline’, as the mail and express industry positions itself for development in light of digitalisation.
A diverse range of differing postal strategies were discussed as postal companies explore different avenues in a bid to build for the future.
Johnny Thijs, chief executive of bpost, elaborated on his company’s success – through a long-term strategy with “clear agreements” and “transparent communication”. To back-up this success, Thijs (pictured) said that the operator’s EBIT has grown to EUR 319m in 2010, compared to minus EUR 79m in 2003.
“bpost needs to be part of the modern environment; competing for new business…Status quo is not an option,” Thijs said, before placing importance in “multi-annual planning”. He added that in Belgium the decline in volumes was not as sharp as other European countries, but that would not last. “We need to build a new company through innovation. We have large direct mail projects that work,” he said, before stating that operators should explore what can be done to support their core businesses.
Away from traditional mail, Thijs discussed bpost’s recent ventures including the electronic ID card and medical subscriptions. He confirmed that bpost had agreed a deal to provide number plates in Belgium, on a ten-year contract worth EUR 30m per annum.
Thijs stated that strong performance is needed to attract investors, including: low growth yield stocks, high sustainable dividends, compensation for the decline in mail; well run operations; strong cash flow; and a cost cutting track record. Furthermore, he suggested that an investment from venture capitalists allows a business to concentrate on profitability over politics.
He concluded by stating that “we have done well… but the day is not over” before adding that “change [within the postal industry] is here to stay.”
Stefano Gori, head of international business strategy, Poste Italiane, said that “innovation and integration are most important. They move hand in hand.” He added that Poste Italiane had invested in order to “innovate and streamline our postal business.”
Gori said it was imperative to learn how your own customers perceive your business. In light of the operator’s trusted reputation, Poste Italiane was able to launch an insurance arm seven years ago. Other non-mail services include PosteMobile. Since 2007, more than 2.3m new customers have chosen the service, and so far EUR 240m has been transferred through 7m mobile financial transactions, Gori claimed. As a result of pursuing new initiatives, only 39% of Poste Italiane’s revenue came from post during 2010; compared to 54% in 2003.
When quizzed over the operator’s potential privatisation, Gori said that it is “not in our hands – we have been ready for the past five years”. He added that privatisation plans were floated when the business was struggling, but now Poste Italiane is delivering a strong net profit of around EUR 1bn annually – suggesting that the government is satisfied with the income from its national operator.
