EU – China Seminar on Postal and Express Services

1. EU – China Seminar on Postal and Express Services Beijing International Hotel 12 -13 February 2009

2. The state of play and development trends of European express services Ilse Wilczek, Group Director Public Affairs TNT Beijing International Hotel, February 13, 2009

3. Global provider of express and mail services 161,000 employees 64 countries Network covers 200 countries • Largest in express in Europe • 47 aircraft • 26,760 vehicles • 228 million consignments • Best postal operator in the world • Mail networks in eight European countries • 4.7 billion addressed mail items in Holland

4. History of TNT 1799 Foundation of the Dutch National Post 1986 Postbank split off (now part of ING) 1989 Corporatization of the Company into KPN (Post and Telecom Combined) 1994 Flotation of KPN shares 1996 Acquisition of TNT 1998Demerger and listing TNT Post Group / TPG; Dutch State 34,5% shareholder 2004 Sell down of Dutch State shares to approx. 19% 2005Name changed to TNT 2006 The Dutch government sold its remaining stake of 10.9% in 2006, including its ‘golden share’

5. Jiamusi Jiamusi Jiamusi Haerbin Haerbin Haerbin Changchun Changchun Changchun Urumchi Urumchi Urumchi Shenyang Shenyang Shenyang Jingzhou Jingzhou Jingzhou Xuzhou Xuzhou Xuzhou Huhehaote Huhehaote Huhehaote Dalian Dalian Dalian Nantong Nantong Nantong Yangzhou Yangzhou Yangzhou Beijing Beijing Beijing Tangshan Tangshan Tangshan Nanjing Nanjing Nanjing Wuxi Wuxi Wuxi Kunshan Kunshan Kunshan Y Y Y antai antai antai Tianjin Tianjin Tianjin Shijiazhuang Shijiazhuang Shijiazhuang Shanghai Shanghai Shanghai Changzhou Changzhou Changzhou Taiyuan Taiyuan Taiyuan Qing Qing Qing d d d ao ao ao Yinchuan Yinchuan Yinchuan Ji Ji Ji ’ ’ ’ nan nan nan Suzhou Suzhou Suzhou Jia Jia Jia x x x ing ing ing Xi Xi Xi ’ ’ ’ ning ning ning Hangzhou Hangzhou Hangzhou Ningbo Ningbo Ningbo Zhengzhou Zhengzhou Zhengzhou Lanzhou Lanzhou Lanzhou Xi Xi Xi ’ ’ ’ an an an Jinhua Jinhua Jinhua Hefei Hefei Hefei Wenzhou Wenzhou Wenzhou Wuhan Wuhan Wuhan Chongqing Chongqing Chongqing Chengdu Chengdu Chengdu Changsha Changsha Changsha Nanchang Nanchang Nanchang Fuzhou Fuzhou Fuzhou Guiyang Guiyang Guiyang 56 Hubs Shant Shant Shant o o o u u u Guangzhou Guangzhou Guangzhou Xiamen Xiamen Xiamen Dongguan Dongguan Dongguan Liuzhou Liuzhou Liuzhou Kunming Kunming Kunming 1100 depots Foshan Foshan Foshan Huizhou Huizhou Huizhou Nanning Nanning Nanning Shenzhen Shenzhen Shenzhen Jiangmen Jiangmen Jiangmen Zhongshan Zhongshan Zhongshan Zhanjiang Zhanjiang Zhanjiang TNT Hoau China network

6. Express market segment Speed Sameday • Time certain, next day or fastest by road (intra-continent) day certain delivery • Consignments transported through a scheduled network • Door-to-door track and trace of individual items/consignments • Often (partial) money-back guarantee • B2B focus Time certain/ Next day Express Economy Express Day certain Expedited Day uncertain/ Standard > 1 kg 1,000 kg 31.5 kg Weight Documents Services Office Parcels Trade Distribution Centre Freight/pallets Production Factory

7. R Example of a shipment cycle Local Station(Origin) Country Gateway (outbound) PICK-UP Customer 5.30 PM 7.30 PM 9.30 PM EXPORT CLEARANCE 11.30 PM Hub Consignee Local Station(Destination) Country Gateway (inbound) DELIVERY 9.30 AM 08.30 AM 05.30 AM IMPORT CLEARANCE

8. Express industry enables tradeand economic development Scope • Express services reduce the biggest trade barrier of distance and connects business to world markets Supply chain Investment • The express industry is a key enabler of foreign trade • Express services help to reduce purchasing and inventory costs • Express services facilitate foreign direct investment • Express services enable small and medium sized companies to operate internationally by contracting out the management in the process Service 7

9. Market trends Environment There is growing consensus amongst the general public, politicians and others that climate change is threatening the environment. Increasing levels of carbon dioxide (CO2) in the atmosphere are trapping more heat, thus increasing global temperatures. Demographic Demographic trends are changing the composition of the population across the globe. For example, in the largest Western European countries it is estimated that between 20% and 25% of the population will be above the age of 65 by 2020. Digitisation Digitisation is a trend that TNT has faced for quite some time. As a result of continuously improving technologies, documents can be digitised, transmitted and reproduced without requiring delivery of the printed material. Supply chain Driven by globalisation, intercontinental trade is growing continuously.

10. Current conditions in the express market are very challenging • In 2008, the European express market grew slower than the economy: • The industry is one of the first to notice a drop in volumes demand • Not all express players could pass inflationary pressures on to customers • The impact of the economic downturn is high: • Significant drop in express volumes • Shift from air to road transportation • Blurring of industry boundaries between express and e.g. freight • Competition in the fragmented market furtherintensified especially from parcel operators, there was further market consolidation in Eastern European markets • In the mature Western European markets, the focus has been on improving efficiency, improving customer service, and expanding coverage as well as service levels • The business to consumer segment is growing, mainly driven by electronic commerce • Express operators increasingly invest in Green initiatives, like TNT’s Planet Me

11. Express services differ from (universal) postal services Key objectives • EU companies are dependent on express services for around 3% of their sales on average – worth around EUR 450 billion • By 2013, over 5% of EU sales are expected to be dependent on express services • Europe’s success in fast-growing economic sectors will increasingly be facilitated by the express industry • Hindering the competitiveness of the express industry will hinder the competitiveness of the economy as a whole Express services are a premium value added service that differs from (universal) postal services. Express delivery companies should be able to conduct their business under the general commercial and legal rules that apply to normal competitive services. 10

12. Express trade associations • Trade associations have been established in almost every part of the world to enable express delivery companies to engage governments in a constructive way

13. Our programme to fight climate change: Planet Me • We measure and manage our CO2 footprint through our Count Carbon initiative • We increase the CO2 efficiency of our operations through our Code Orange initiatives • Choose Orange engages our employees to participate at work and at home with their families