2009-10 Annual Report - Australia Post

our Business
MAnAging direCtor
And Ceo’s rePort
Ahmed Fahour Managing director and Chief executive officer
it is with great pleasure that i make my first contribution to an annual
report for this iconic australian business, which i’ve been proud to
lead since february 2010.
While 2009–10 was a difficult year for australia post, our financial
results are consistent with forecast projections. More importantly,
we have taken enormous strides towards returning the business
to profit growth in the near future.
in april, we embarked on a major change program – “future Ready”
– that will transform australia post from a postal enterprise largely
dependent on traditional mail to a highly competitive distribution,
retailing and e-services provider in australia and overseas.
My predecessor, Graeme John, did a remarkable job in transforming
this business and i am honoured to have the responsibility of leading
the next transition. Like Graeme, i am absolutely committed to the
commercial success of this business as well as to providing outstanding
community service.
Financial results
there has been a sudden deterioration in our financial results over the
past two years, particularly apparent in the year just passed. Revenue
for 2009–10 was $4.87 billion (a fall of 2.3 per cent) while our pre-tax
profit declined by 73 per cent to $103.0 million. ongoing sluggishness
in the global economy continued to be a factor, but the main threat
to our bottom line has been the recent downturn in letter volumes
as consumers switch to electronic alternatives. addressed letter
volumes declined by 5.5 per cent while costs increased as we
delivered to more than 100,000 additional delivery points nationwide.
electronic substitution affected other core business areas such as bill
payment and agency banking. However, this contraction was largely
offset by continued growth in international money transfer and identity
services, resulting in an overall decline of 3.3 per cent in revenue for the
agency services & retail merchandise portfolio.
the above scenario was the catalyst for our future Ready business
renewal program.
Significant achievements
although 2009–10 was a year of significant change, our 34,457 people
continued to perform admirably. for example, 96.1 per cent of domestic
letters were delivered on time, even as we implemented significant
efficiency measures. it is because of our people’s commitment and
can-do attitude that our customers continually rate australia post
as one of australia’s most trusted corporations.
there have been four significant achievements for the business
since i was appointed on 1 february.
firstly, we signed a memorandum of understanding with the unions
that represent our people, the CpsU and CepU. this contained an
acknowledgement from all parties that the existing combination of
rising costs and falling revenue is not sustainable for australia post,
its employees or the community. We are committed to implementing
structural change that will reduce our cost base, but we are also mindful
of managing this change in a way that is transparent and consultative.
agreement on a fair Work agreement was reached in July (after the
2009–10 reporting period).
secondly, we were successful in our application to increase the
basic postage rate. Given the profound changes to the environment in
which the letters business operates and the substantial efforts made
to improve our productivity, the aCCC did not object to the increase.
While we are reluctant to raise prices, an increase was necessary
to help offset the rising cost of delivering this essential community
service to a rapidly expanding network.
thirdly, the future Ready business renewal program is a highlight of
my first few months here. essentially, future Ready is about returning
australia post to sustainable growth by putting customers at the
centre of everything we do. Between announcing the program on
20 april and starting its roll-out on 1 July, an extraordinary effort
was required from many of our people to make future Ready a reality.
not only have we changed the structure of the business; we are also
introducing real, practical measures to achieve cultural change and
put our customers first.
fourthly, we have achieved strong results in our cost containment efforts
through the reduction of staff numbers in head offices, as well as reducing
costs associated with overheads.
today, australia post is well on the way to balancing its dual objective
of delivering healthy commercial returns to our shareholder and
delivering a reliable, accessible service to the entire community.
it’s a time of great challenges and even greater opportunities.
Thank you
My thanks to everyone at australia post for the warm welcome i have
received. i’m immensely excited to be leading the corporation through
a period of major change and grateful to have dedicated people behind
me every step of the way. so a big thank you to all our people, partners
and suppliers for what has already been achieved this year. there are
more challenges ahead, but also tremendous rewards. finally, i’d like
to express my gratitude to our customers, whose loyalty and trust are
at the heart of australia post’s success – now and into the future.
Ahmed Fahour
Managing Director and
Chief executive officer
AustrAliA Post AnnuAl rePort 2009–10 | RepoRt of opeRations 9