Our goal is to continue operating highly profitably. In the domestic mail business, our
exclusive licence for letters weighing less than 50g lapsed on 31 December 2007. With a view to making good the anticipated loss of market share, we are pursuing three aims: extending our range of services, reinforcing our position abroad and making our transport and delivery network costs more flexible.

Clear parameters for 2008

Ahead of the complete liberalisation of the German mail market, key parameters that will shape our business in the future were defined. Mail prices will continue to be regulated by the Bundesnetzagentur (German federal network agency). The new regulations allow us to keep postage costs for private customers stable whilst establishing more flexible pricing for business customers. There are currently no plans to impose value-added tax on mail carried under the postal universal services obligation.

Extending range of services

Deutsche Post has long since emerged as more than a company that simply carries and delivers mail and parcels. We now offer services at every link in the mail value chain. In the
dialogue marketing segment, we are seeking to establish a position as a provider of cross-media services. Williams Lea is pursuing a strategy of performing additional services for existing partners and harnessing these credentials to acquire new customers.

Our goal in the parcel business is to be readily accessible anywhere, any time. For this reason, we are expanding the existing network of some 900 Packstations to a total of 2,400 machines by 2010. In the initial phase, we are also installing 1,000 Paketboxes across Germany.

Boosting customer satisfaction

Recent studies have confirmed the success of our strategy: Customers in all segments – private customers, small and large businesses as well as key accounts – have indicated their significantly greater satisfaction year-on-year with the scope and quality of our services.

Reinforcing position abroad

An opportunity exists for us in the further opening of mail markets abroad as we either enter them for the first time or continue to develop our local business in line with the extent of liberalisation. The timetable agreed in Europe envisages opening up the markets in two steps, in 2011 and 2013. This serves to set the future parameters for our business also in this area.

Making costs more flexible

In recent years, we have made our network costs more flexible, allowing us to adjust them rapidly in response to volume changes. To this end, we have come up with a detailed range of measures. Amongst the requirements are a decrease in the number of mail cargo flights at night and a reduction in outsourced operations, such as transport by lorry. State-of-the-art IT systems enable us to more accurately predict the order intake and optimise capacity utilisation according to traffic volumes. We have also further increased the flexibility of our staff costs in the past two years.