1. The weight of print In the invoicing balance Sébastien HouzéPostEurop Market Manager EC Meeting, 31 May 2011, Brussels

2. a quick view on the postal sector 1

3. PostEurop 50 European Public Postal Operators Linking 800m people daily Retail services – 175,000 counters Employing 2.1 million people

4. Comparison Telcoms and E – Print and paper Telcoms & EPrint & Paper Key differences Growing market Declining core market & competition with other media Residential revenue concentration Business revenue concentration Capital intensive Labour intensive Out of Europe production European Production Based Other differences, Post in focus Easier capacity extension Extension limited by human factor Retail/wholesale No mandatory access Trans-national - EU top down Strong subsidiarity USO as start in the « ladder » USO as main business Renewed liberalisation discussion Liberalisation 2011 but yet inter-modal competition

5. Business is sendingConsumers are receiving From/To Business ConsumersTotal Business 31 % 57 % 88 % Consumers 6 % 6 % 12 % Total 37 % 63 % 100 %

6. 2 the context -Declining core market and true competition -Diversity of situations

7. Declining core market & true competitionMore E-substitution to come Domestic Addressed Mail Revenue vs. GDP (at market prices) (Domestic Mail Revenue without Invoice to the State) Acceleration of e-Invoicing adoption mainly in B2B sector Start of the law legalizing e-Registered Mail E-substitution:Unstructured doc. to email GDP (inflation incl. – Base 100 = 1995) Post Domestic Mail revenue (Base 100 = 1995) Sources: Annual Financial Report of The Post SA 1993 – 2007, Strategic Plan forecasts, BNB, Federal Office of Plan, Ministry of Economic Affairs

8. Declining core market & true competition More recent years show a sharper decline for most Western EU PPOs Domestic Mail CAGR 2004-2007 Growth Flat Slight decline (< 1%) Strong decline Source: PostEurop data, UPU & Annual reports

10. Diversity of situationsMail dependency – Revenue Composition (2008) Source: IPC, 2009

11. 12 ESTIMATES Diversity of situationsFixed costs (personnel costs)… Personnel cost (2008*) (Staff cost/ total cost) * CZ, BG, HU, EE, LV,LU, SI, ES date 2007, SK date 2006 Sources: Study EC - ITA Consulting, WIK , info postal operators

12. 13 ESTIMATES Diversity of situations Addressed mail volume per capita Domestic Addressed Mail volume per inhabitant p.a. (2007)* Average 169 * AT & BE data 2008 Sources: Study EC - ITA Consulting, WIK , info postal operators

13. 14 Diversity of situationsDifference between self-employed and employees… *Defined as labour cost for a self-employed workerdivided by labour costs if worker were an employee Sources: PWC report, May 2006 on ‘Postal Internal Market’

14. Diversity of situationsInternet: an alternative? http://ec.europa.eu/information_society/policy/ecomm/doc/implementation_enforcement/annualreports/15threport/comm_en.pdf

15. 3 more EU regulatory initiatives impacting the postal operators

17. State aid & services of general economic interest (DG Competition)

18. Combating late payment (DG Enterprise)

19. Digital agenda (DG Infso)

20. E-commerce (DG Markt)

21. Aviation security (DG Mobility & Transport)

22. VAT (DG Taxud)

23. E-invoicing (DG Taxud)

24. Modernised Customs Code (DG TAXUD)

25. Postal & courier – GATS (DG Trade, WTO)

27. Fixed Prices

28. Integrated

29. Variable Cost

31. Full Service

35. Social Mission

37. Commercial Mission

38. Own Information

39. Innovation

41. Price Cost Integrated Letters Network International Volume & Value Full Service Sender/ Recipient Physical/ Hybrid Innovation Info Ownership Social/Commercial Partnering Core/Diversified

42. Do not disturb? We are changing…

44. Most Value to Senders

45. Physical

46. Less Volume, More Value

47. More Value to Recipients

49. United we stand 5 3+ sectors covering entire value chain million people employed

52. Do you have the global picture? 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. 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. Accordingly, this Communication addresses the following priorities: - to ensure legal certainty and a clear technical environment for e-invoices to facilitate mass adoption - 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 - to support the uptake of e-invoicing by setting up organisational structures, such as national e-Invoicing fora and a European Multi-Stakeholder Forum. COM(2010) 712 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Reaping the benefits of electronic invoicing for Europe

53. Do you have the correct image? BENEFITS FROM ELECTRONIC INVOICING 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. 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]. 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. 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.

54. Two industries, twoworlds… 7

55. E-billing to save the trees and the earth? http://www.digi.com http://www.greencitizens.net http://www.timewarnercable.com

56. E-billing to save the trees and the earth?

57. And the consumer? 38.000 trees en 1512 tons C02 economy

58. And the consumer?

59. And the consumer? 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... “NOT ASKED and NOT DESIRED” Source: Het Laatste Nieuws 02/12/2010

60. Dematerialization «From atoms to bits»?1995 - MIT professor Nicolas Negroponte Number of emails/day has increased dramatically over the last 10 years, but the number of post letters has only slightly decreased Sources: Radicati Group, 2010; Mcafee, 2009; UPU, 2009

62. Large complementary and generational effectSources: 1CEPI, 2010; 2Arnfalk, 2010

63. Impact on resource extraction GHG BIO TOX TOX Rare materials Modern electronics contain up to 60 different elements1 800 laptops contain up to 1 kg of gold2 Intensive chemical refinement of materials Water usage 250.000 M3 water is used for 1 tonne of gold3 Sources: 1UNEP, 2010; 2Umicore, 2007; 3CSIRO, 2007

64. Impact on resource extraction GHG BIO BIO BIO Logging of mature virgin forests 56% of all woodsources in EU are PEFC and FSC certified1 Homogeneous replanting for logging Source: 1 CEPI, 2009

65. In Europe, only 15% of paper “raw material” comes from specific “thinning” (cutting of trees) 60% of paper production is made of “virgin” fiber 25% of these virgin fibers comes from specific “thinning” Specific “thinning” 25% Waste of forest industry 25% 50% Sanitary “thining” 15% (= 25% of 60%) of paper “raw material” comes from specific “thinning”  “Use of paper” DOES NOT mean “forest destruction” 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

66. GHG TOX Impact on production Energy intense complex production 81% of life cycle energy use during production phase1 Chemical treatment Source: 1Williams, 2004

67. GHG GHG TOX TOX TOX TOX Impact on production Production of pulp & paper CO2 emissions have decreased by 42% per tonne of paper pulp since 19901 Bleaching COD used has decreased by 76.3% since 19901 Water usage

68. Impact on usage GHG Continuous energy use ICT GHG emissions are 2% of global total1 Global data centres GHG emissions comparable with those of The Netherlands2 Sources: 1Gartner, 2007; 2McKinsey & Co, 2008

69. GHG Impact on usage Transport430 billion mail items send in 20091 Source: 1Arnfalk, 2010

71. GHG BIO BIO TOX TOX Impact on waste Landfill Only 15% of global E-waste is recycled1 Yearly E-waste increase: 40 million tonner/year2 Quickly obsolete Increasing life span of phone from 1 to 4 years decreases environmental impact with 40%3 Sources: 1Pike Research, 2010; 2UNEP, 2010; 3Umicure, 2007

72. Impact on waste HGG GHG Landfill Paper recycling rate in EU 2009: 72,2%1 Source: 1CEPI, 2009

73. Comparing life cycles 2010 Sustainability Challenges ICT and paper: linear versus circular system 15% 72%

74. Mail and E mail Carbon Meter

75. Simulating the effect of sending physical mail and email C02 EMISSION: 1 Letter mail = 2,0 times email

76. But…volumes are not the same ! Worldwide1: 430 billions paper mail 60.000 billions e mails (SPAM included) Source: 1Arnfalk, 2010

77. SPAM effect Global CO2 email trafficup to 20 times post letter traffic1 Source: 1Arnfalk, 2010

78. BUT… !!!

79. The electronic / graphical global picture European basedindustry, fromEuropeans to Europeans 360° production system: fromsourcing to production, from production to recycling, fromrecycling to production Complete master of ressources and energy Investments in Europe, from Europe A responsibleindustry, framed by certifications ( ISO, EMAS, FSC, PEFC, CarbonNeutral, … ) Regulated business Non European basedindustry, fromoutside to Europeans No 360° production system: no recyclingprocess, production conditions uncertained No master of ressources ( Silicium? ) and energy ( nuclear? ) Investmentsoutside Europe No certifications No regulations

80. Cloud computing, production, data centers, call centers…

81. Sure? 2010 Sustainability Challenges

82. The paper values 8

83. Paperis the preferredchannel Preferred media channel for relational communication

84. P and e are complementary

85. P and e are complementary

86. Don’tunderestimatepaperplease…

87. Don’tunderestimatepaperplease…

88. Don’tunderstimatepaperplease…

89. Don’tunderstimatepaperplease…

90. Don’tunderstimatepaperplease…

91. Don’tunderestimatepaperplease…

92. The time for synergy 9

93. We add value to paper and prove the synergies with electronic We foster paper mail by promoting innovation in general and by creating the bridge between paper and electronic http://www.printpower.eu/mailing

94. Our propositions 10

95. Wemake a wish… A fairview on the two media values withadvantages and inconvenients Promotion of the advantages of the synergy of both media utilizedtogether A review of figures based on sender AND recipients impacts and including consumer rights protection A complimentarystudy on IT dependance for households and the cost impact of it

96. 70

97. Sébastien HouzéMarketManager E-mail: sebastien.houze@posteurop.org Direct line: +32 2 773 11 95