Changing the Postal Market Place

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Changing the Postal Market Place
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Table of Contents

• Industry Overview
• Company Overview
• Focussed strategy
• Operational excellence leads to quality
• Quality leads to volume
• Financials
• Conclusion

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Industry Overview
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European postal consolidation game started
The Dutch postal market is target market for
global players

• The European Union have adopted the plan to
  liberate the European postal market between 2007
  and 2012
• Today, consolidation of European players started
• The Dutch Government decided to liberate the
  Dutch postal market in 2007
• Today, the Dutch postal market is in practice the
  most liberated postal market in Europe
• Most of the global strategic players have not yet
  managed to enter The Netherlands (La Poste,
  Royal Mail, USPS, Canadian Post etc)

2007
2007
2007
2009
Relative size of the free market
Source TPG website
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The liberated Dutch addressed market will double
in 2007
Dutch postal market liberalisation offers
compelling business opportunity
Dutch postal market
Liberated
Partly Liberated
Monopolised
Unaddressed
Value 300 million Size 10 billion
pieces Characteristic Poor quality levels
Reserved Area
Liberated Market

• Definition Mail letters gt 100 gram
• Value 1.1 billion
• Size 2.7 billion pieces
• Characteristic
• 80 presorted bulk mail
• Mainly commercial mail magazines
• Moderately sensitive to quality
• Market size and value stable

• Definition Letters lt 100 gram
• Value 1.3 billion
• Size 3.0 billion pieces
• Characteristic
• 90 presorted bulk mail
• Mainly transactional mail
• Highly sensitive to quality
• Market size and value declining

Free from mid 2007
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All free market segments are being penetrated in
2005
Liberated Market 15 converted in 4 years time
Charity 200 mio pcs.
15 switched
Lettersgt100 g 350 mio pcs.
Homeshoppimng 300 mio pcs.
33 switched
Liberated Market
5 switched

• Value 1.1 billion
• Size 2.7 billion pieces
• Characteristic
• 90 presorted bulk mail
• Mainly commercial mail magazines
• Moderately sensitive to quality
• Market size and value stable

Sponsored Media 200 mio pcs.
Publishing 550 mio pcs.
25 switched
5 switched
15 switched
Direct Mail 1,1 bio pcs.
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Room for 3 national bulkplayers in the Netherlands
Due to current market entry barriers, no new
player is expected
Market share of currently liberalised market
Less than 1 of total market
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Company Overview
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Sandd will be ready for full liberalization in
2007
Sandd has a strategy that ensures a growth focus

• Objective
• To increase market share to 20-25 marketshare in
  2008
• Operational excellence, highly profitable
• To be perceived as a top-quality player

• Strategy
• Penetrate the cash-cow segment of the market
• Apply focussed logistic processes, discipline
  sales marketing effort to fit this process
• Controlled growth
• Stay competitive through variable costing
• Positioning as a professional and
  entrepreneurial, quality player

• Product
• Delivery of addressed bulk mail (database)
• Delivery on Tuesday and Friday
• Flexible pricing - on average 20 below market
  leader
• Quality almost equal to that of the market leader
• Service levels above market standard

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Sandd can keep pricing flexible due to its
proprietary systems
Sandd competes with a former monopolist based on
operational excellence
Traditional Postal Delivery
Fixed Pricing
vs.
Variable Pricing
Sandd Postal Delivery
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Tracking and improving quality
Depotnet provides Sandd with a competitive
advantage for improving quality
Depotnet screenshots
Total quality
Delivery Areas
Each underlined item is a link to a detailed
description of the delivery (below)
Quality is being tracked per address
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Quality Sandd delivery almost at TPG level
Delivery timeframe¹
Customer perceived market position
Commercial price in
Deliver quality in
Delivery dayThues-/Friday
¹Research by
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Quality controlled growth leads to tremendous
growth
2001-2004
2005-2006
2004-2006

• 100 coverage street addresses
• 100 po-boxes coverage
• from 80 to 100 depots
• implementation semi-automated processes

• 8000 mailmen
• 600 customers
• 8 marketshare
• product development

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Sandds track record is growing rapidly
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Sandd is well prepared for the big jump in
2007-2008
A proven track record in achieving growth
2003
2002
2004
2005
2006
2007
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Turnover (million)
32
50
70
gt 90
130
210
300
60
30
Volume (million pieces)
gt 400

--
---
EBITDA



negative
negative
Operational Cash Flow
positive
positive
positive
positive
lt 2
Investments (million)
10-20
10-20
lt 2
lt 2
lt 2
20
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Conclusion
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Liberated market will dramatically change until
2008
Within 6 years from monopoly to balanced tri-opoly
2007
2005
2004
In volume (pieces)
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Sandd, changing the postal market place

• Company
• 2 player in the Dutch postal services market
• First European private postal player of its kind
  unique, proprietary process
• Ability to provide comparable quality combined
  lower prices (compared to former monopolist)
• Clear value proposition to customer
• Proprietary operations and significant
  intellectual property base
• Scalable operations with significant fixed and
  variable cost leverage
• Highly dedicated, entrepreneurial organization
• Market
• Large, deregulating market
• Economies of scale provide barriers to entry for
  smaller competitors and new entrants
• Strong visibility into future piece volumes and
  revenues

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