TPG targets 320 mln Euros in cost savings amid expected mail slowdown

AMSTERDAM (AFX) – TPG NV is targeting long-term cost savings of 320 mln eur at its PTT Post division amid expectations of a slowdown in mail volumes in coming years, said chief executive Peter Bakker in an interview with Het Financieele Dagblad.
The cost savings could compensate for as much as a 20 pct decline in mail volumes, Bakker said. Mail volumes are expected to fall due to increased use of email and electronic messaging.
Bakker, who takes over as CEO from today after previously serving as TPG’s chief financial officer, said that every 1 pct decline in mail volume results in 15 mln less profit for the company.
Using machines to sort post according to address is expected to save the company about 265 mln. Another 55 mln in savings is expected from merging and outsourcing call centre activities and the front office operations of post offices.
Bakker expects the company to complete the reorganization and realize the cost savings within seven to eight years.