In order to maintain our success in the current economic climate, we are working even more closely with our customers, reviewing options for additional cost reductions and searching for new ways to improve our customers’ businesses in the various industries and regions where we operate.
We have launched a number of key initiatives that will help improve our financial performance in the coming years. For instance, we will optimise operational workflows, make supporting functions more efficient, optimise operating assets and continue to efficiently manage the portfolio. We intend to use these measures to further improve our earnings, working capital and cash flow as part of our Roadmap to Value.
Since the fourth quarter of 2008 global economic conditions have deteriorated in an unprecedented way across all industries and regions. We are preparing our businesses to cope with this downturn, the length of which is difficult to determine.
To mitigate adverse effects from materially lower business volumes our initiatives aim at reducing operating costs and also all indirect and overhead costs. We will also continue to rigorously manage the business to maintain a solid cash position by applying a tight policy on capex and M & A as well as further improving our working capital position.
The restructuring of our US express business is being executed according to plan. At this point in time, we have no reason to deviate from our target of reducing the loss of that business on an annualised basis to no more than US $ 400 million by the final quarter of the year 2009.
At the time of preparing the Group Management Report, economic visibility is currently limited, which makes it difficult to provide reliable guidance for the Group and its divisions. We will issue fresh guidance when economic prospects become clearer.
As announced we withdrew from the domestic US express business at the start of 2009 and will restructure our organisation accordingly. We will also streamline our management structure for sales and production in our MAIL Division with a view to improving our process management, optimising our costs and harmonising our approach to the customer.
We plan to make fewer investments in 2009. Property, plant and equipment will again attract the larger portion of spending, and more than three quarters will be allocated to the MAIL, EXPRESS and SUPPLY CHAIN/CIS divisions.
Funds allocated to the MAIL Division will be slightly higher than in the previous year and are planned predominantly for the domestic mail and parcel business. We plan to purchase machinery for processing standard and compact letters and flat mail more efficiently. In addition, we intend to install additional Packstations and continue modernising our retail outlets.