Delivering eCommerce - Australia Post

1 Annual Report 2015. Delivering eCommerce Everyone, Everywhere, Everyday ering eCommerce Deliv line and m ak e it easier for businesses to sell on ued to ses. This year, we contin llect an d retu rn their online purcha omers to co deliver, and for cust 15,591. 18,000+ Street Posting 4,406. Parcel Lockers Boxes Post Offices ater giving customers gre to making it easy for wh ere an d when enabling customers , ch oic e of ls or ret urn customers to send rcels send pa rce they collect their pa /7. receive a nd co lle ct 23 0+ loc at ion s online purchases 24. acros s their parcels Million+. 2 Million+ Million+. Last-Mile App Notifications MyPost Subscribers Downloads helped customers collect their parcels sooner 500 Million+ Million Chinese Delivery Points Helping hundreds of small businesses Consumers mean your online purchases can be Go and Grow s from can now buy good r ali an bu sin es ses delivered, no matte Austr Online using ou r Tm all and where yo u live vir tual storefronts Annual Report 2015 1.

2 Delivering a better future Our People We employed 36,743 people, in 3,832 communities across the country We continued to focus on creating a safety culture and achieved a improvement in our Lost Time Injury Frequency rate We supported our people by making operational changes that mean 35% of all parcels are now delivered by posties Our Customers We welcomed more than 344 million online and in-store customer visits We exceeded our Community Service Obligations by Delivering of letters on time or early We acted as agent for more than 750 government bodies and corporates to make it easier for our customers to do important tasks like paying bills.

3 Applying for a licence or getting a passport Our Community We engaged local communities in the future of Australia Post at 197 community events, held in 166 towns across the country We invested more than $210 million in Delivering our Community Service Obligations We provided more than $ million in cash, in-kind and operational support for community programs, and funded more than 110 community grants 2 Annual Report 2015. Australia Post is a self-funded government business enterprise, with the Australian Government as its sole shareholder. It does not receive taxpayer funds and, in fact, has paid dividends to the Australian Government of more than $ billion over the past 10 years.

4 As required under the Australian Postal Corporation Act 1989. we continue to balance our commercial objectives with the need to deliver our community service obligations. Any profit we earn, where appropriate, is used to pay a dividend to our shareholder and reinvested in our assets and services so that we are equipped to meet the changing needs of our customers and the community. This is the fifth year we have produced community. To ensure we delivered a an integrated annual report incorporating balanced and relevant review of FY15, our overall sustainability performance, we conducted a rigorous materiality including our financial, social and assessment to determine the issues of environmental activities for the 2015 greatest concern to our stakeholders.

5 Financial year. In doing so, we consulted with internal The report is prepared in accordance stakeholders (including representatives with legislative requirements, the Global of our Risk and Compliance, Stakeholder Reporting Initiative (GRI) G4 Guidelines, Relations, Workplace Relations, and the principles set out in the United Sustainability and Community Relations Nations Global Compact. areas) and drew on a number of source The report provides information for our four materials such as recent customer primary stakeholders our shareholder research and media coverage. These (the Australian Government), our outcomes were then tested with the people, our customers and the broader Australia Post Stakeholder Council.

6 Annual Report 2015 3. Contents Delivering eCommerce IFC. Delivering a better future 1. Leadership Chairman's message 4. Managing Director & Group CEO's message 5. Board and leadership team 6. Our Business What we do 8. An eCommerce future 10. Financial performance 14. Engaging our stakeholders 16. Our Stakeholder Council 17. Delivering eCommerce Delivering a better future 18. Investing to become an eCommerce leader 20. Building our parcels business 21. Transforming the post office 27. Embracing technology and innovation 30. Delivering a Better Future For our people 33. For our customers 38. For our community 42. G4 content index 48. Assurance statement 49.

7 Corporate governance statement 50. Financial and statutory reports 59. Community service obligations 107. Australia Post the statistics 123. Index 125. Glossary 127. About this report 128. 4 Annual Report 2015. Leadership Chairman's message This financial year marked in March 2015. At the time of and cultural attributes to cement our writing, those reforms are before leading role in the delivery of online a significant turning point the Parliament. shopping for all Australians. for Australia Post. We This is a crucial reform because it will We are very mindful that customer made important progress enable us to reduce the size of our behaviour continues to shift, rapidly, losses in letters, and remain a self- as customers, everywhere, seek in managing the decline funding corporation with the capacity greater value and convenience in this of letters, while developing to invest in contemporary services era of mobile connectivity.

8 For the benefit of all Australians. the customer-centric I am confident that Australia Post The reform also preserves those now has the right team, culture and attributes and culture that aspects of our service that the strategy to leverage our nationwide are required to succeed in community values most highly infrastructure and meet the rising the eCommerce market. including five-day-a-week delivery expectations of our customers. and the maintenance of 4,000-plus post offices. Thank you Reforming our letters service I want to sincerely thank my fellow That's vitally important for Australia , directors, our Managing Director The biggest challenge that Australia because our physical network & Group CEO Ahmed Fahour, the Post faced this year was, again, the underpins commercial activity, management team, our employees, accelerating decline in the use of letters, enables universal access to services, licensees, contractors and agents for as Australians continued to switch to and promotes social inclusion all of your hard work and commitment digital alternatives.

9 The per cent especially in rural and remote throughout this tough transition year. decline in addressed letters this year communities. brings the cumulative volume decline Our many achievements this year will to per cent since our mail peak in Delivering eCommerce stand us in good stead to return to a 2007/08. Our future is clearly linked to enabling sustainable and profitable position in and supporting the growth of the years ahead. Consistent with our forecasts, this was the year where the financial losses we eCommerce through our nationwide incurred in the letters service actually networks, as well as our growing range overwhelmed the profits we earned of trusted identity and payments from parcels, and retail and agency services.

10 Services. However, given the trend towards borderless commerce, the logistics John Stanhope Given the accelerating rate of volume Chairman market is becoming intensely declines and mounting financial competitive and increasingly global. losses in letters, we worked closely This year there was a noticeable trend with the Government on developing a of overseas operators entering our regulatory response to the structural domestic market. decline of this valued community service. The Federal Government In response, we have maintained announced that it would support the our strategic focus on creating more regulatory reform of the letters service customer-centric services, capabilities Annual Report 2015 5.