for an enhanced postal euromed multilateral postal … · cooperation within the euro-mediterranean...

POSTAL EUROMED PROJECT

For an enhanced multilateral postal cooperation within the Euro-Mediterranean region

August, 2009

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Invest In Med

The Invest in Med programme aims at developing sustainable trade relationships, investments and enterprise partnerships between the two rims of the Mediterranean. Funded at 75% by the European Union over the 2008-2011 period, it is implemented by the MedAlliance consortium, which associates economic development organisations (ANIMA, leader of the programme), CCIs (ASCAME, EUROCHAMBRES), and business federations (BUSINESSMED). The members of these networks, as well as their special partners (UNIDO, GTZ, EPA Euroméditerranée, World Bank, etc.), gather a thousand of economic actors - mobilised through pilot initiatives centered on key Mediterranean promising niches. Each year, a hundred operations associate the 27 countries of the European Union and 9 Mediterranean partner countries: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria and Tunisia.

www.invest-in-med.eu

This study has been produced with the support of the Invest In Med programme

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Postal Euromed Initiative

As economical, social and territorial players, individual postal operators play a key role in the daily life and development of their countries. They can help societies move towards sustainable development thanks to the nature of their business, the wide range of groups that they address, their societal responsibilities and the key role they play vis-à_vis companies. More generally postal services can initiate innovation and act as catalysts for development in their respective countries and region. In order to achieve this postal operators must share their know-how, experience and expertise.

A closer co-operation which leads to synergies, is in line with the commitment to developing economic partnerships in the countries around the Mediterranean basin.

Based on this common understanding, back in 2006 nine Mediterranean postal operators decided to get together to organise the 1st International Euromed Postal Service Convention, which took place in the city of Marseille, France, in July 2007.

This event in light of its success – more than 500 participants took part from 28 countries – was the first concrete illustration of the shared determination between postal operators to optimise co-operation in a region that is set to see extensive developments over the upcoming years.

Today, the Postal Euromed initiative counts 19 postal operators, which operate within the framework of 4 working groups under the hood of a Steering Committee.

In view of the challenging economic times, these postal operators, whilst pursing the projects in which they are already engaged, share the belief that a multilateral and mutually supportive co-operation framework can help the Postal Euromed initiative gain a new momentum.

http://issuu.com/euromedpostal

Postal Euromed Countries : Algeria, Cyprus, Egypt, France, Greece, Israel, Italy, Jordan, Lebanon, Libya, Malta, Morocco, Palestinian Authority, Portugal, Spain, Slovenia, Syria, Tunisia, Turkey.

Building the Euro-Mediterranean Postal Services of Tomorrow

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Disclaimer

This report is primarily for the use of Euromed postal Members and any relevant parties and or partners. No part of it may be reproduced for distribution outside this group and the Invest In Med programme without prior written consent of these parties. Requests should be directed to La Poste (European & International Affairs Division and/ or Anima Investment Network).

The study has been prepared by CVA under the management and coordination of the La Poste Group (France), for the benefit and use of the Postal Euromed members in order to indicate on a preliminary basis, the feasibility of further strengthening their co-operation. A co-operation which could be materialised through the implementation of concrete multilateral projects.

This publication has been produced with the support of the Invest in Med programme financed by the European Union. The contents of this publication are the sole responsibility of CVA, independent body, producer of the data aggregation, analysis and the La Poste Group and can under no circumstances be regarded as reflecting the views of the European Union. CVA has signed a non disclosure agreement: no data from the questionnaire parties have filled in, as a preliminary requisite, will ever be communicated to any participant or/and third party (including the La Poste Group). Furthermore, the material presented in this study does not necessarily reflect entire contents of discussions and bilateral interviews.

Financial services have not comprehensively been covered in this study since they are addressed in a second study, also co-funded by the Invest In Med programme.

Herewith we address a special recognition to Liban Post, Poste Slovenije, Poste Italiane, PTT Turkey, the La Poste group, CTT Correios, Cyprus Postal Services, Elta, Correos y Telgrafos for their active participation and commitment in returning us the Postal Euromed questionnaire. In this regard, it must be noted that for the sake of consistency in the data analysis and also mainly due to the relative low response rate to the questionnaire (10/19 posts), publicised UPU statistics have been used as a reference basis.

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Suggested approach

Phase 1: Preliminary opportunity study completed herewithcompleted herewith

– Main economical characteristics and trends of the Euromed area– Analysis of economical flows in the area– Evaluation of mail, parcel and financial services flows– Screening of common development opportunities in the area of quality, shared services and new products– Identification of three or four opportunities

Phase 2: Second preliminary opportunity

– Evaluation of these potential opportunities– Validation of lack of redundancy with other international organizations (UPU or IPC)– Evaluation of economical impact on postal operators in the area– Identification of interest for these opportunities by other external partners

Phase 3: Feasibility study GO/ NO GO

– Definition of the Postal Euromed vehicle: type of company, status, location, organisation, governance – Full inventory of future common services (not only those identified in the Opportunity study)– Analysis of relationship between EPC and UPU, IPC organisation, possible synergies– Business plan

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Glossary

Euromed:In the study, postal Euromed comprises 19 Mediterranean member states and countries (see “Introduction to the Postal Euromed project for more cooperation “)

Please note, for the sake of consistency, that any reference to the Euromed region made in this study, only refers to the Postal Euromed members countries

COFACE: Compagnie française d'assurance pour le commerce extérieur (French InsuranceCompany for external Trade)

Cont’d: continued

COPEAM: Conference permanente de l'audiovisuelméditerraneen (Permanent Conference of the Mediterranean Audiovisual Operators)

EPG: E Parcel Group (former European Parcel Group)

FDI: Foreign Direct Investment

GSM system: Global Monitoring system

HQ-to-HQ: Headquater to Headquaters

IMF: International Monetary Fund

IPC: international Post Cooperation

IPEMED: Institut de Prospectives Ecomiques du Monde Méditerranéan

ITA: Institut du Transport Aérien

KPG: Kahala Post Group

MIPO: Mediterranean Investment Project Observatory

MTC: Money Transfer Company

NPO: National Postal Operator

OCR: Optical Charcater Recognition

QS: Quality of service

QSF: UPU Quality of Service Fund

REIMS: Remuneration for the Exchange of International Mail Services

RFID: Radio Frequency Identification

TBD: to be determined

UPM: Union pour la Méditerranée

UPU: Universal Postal Union

UN: United nations

UNESCO: United Nations Educational, Scientific and Cultural Organisation

UNEX: External Quality of Service measurement system

WCO: World Customs Organisation

WEO: World Economic Outlook (IMF)

YYYYA vs. YYYYE: realised vs estimates resulted for the year YYYY

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Executive Summary

After around twenty years of deregulation, the world is probably witnessing the end of the era of dogmatic economic neo-liberalism and about to enter an age of re-regulation. Strongly converging views are emerging over the idea that this new regulation will take hold more on a regional scale than with the whole world economy (Alena, Mercosur, Asean, etc.): globalization is thus taking the form of regional integrations for which the Euromed region (1) would appear to be lagging behind other areas of the world.

The Euromed region is often presented as the area symbolizing the divide between North and South.Between Southern Europe and North Africa we do indeed still see the widest gap between neighbours in terms of per capita GDP. Not only is the ratio 1 to 6 - compared with 1 to just over 3 between the United States and Mexico - but also has it grown over the whole thirteen years that followed the signing of the Barcelona Process. However, any such study cannot be confined to economic indicators alone. The major human development indicators show that Southern Mediterranean countries really have made up a lot of ground: childhood mortality still sees the North and South at opposite ends of the scale but the gap is unquestionably growing smaller. Fecundity levels are also converging, and already several cities on the Southern shores of the Mediterranean are recording birth rates on a par with Western countries. Asymmetrical but nonetheless convergent, the region is far too complex to fit inside a simple North/South segmentation.

While real differences exist within the Euromed region, there is no escaping the fact that the area is a key player in the world economy: it is the 6th largest area population-wise and the 3rd largest in terms of GDP, just after Europe and North America…

The Euromed region is structured by a large number of flows on which rest economic reality, and a widely shared awareness of belonging to one and the same entity: 30% of exterior trade flows from the area and 50% of migratory flows internationally are in actual fact intra-zonal.

While regional integration here appears to be slower than in other areas of the world, initiatives for cooperation, widely supported by EU and national funds, are high in number in every sector of the economy (financing of projects, banking, transport, television, etc.) and are all precedents for the necessary postal service cooperation.

Footnote: (1)In this particular study & for the sake of consistency with the Postal Euromedmember countries, the Euromed Region comprises the following countries : Algeria, Cyprus, Egypt, France, Greece, Israel, Italy, Jordan, Lebanon, Libya, Malta, Morocco, Palestine, Portugal, Spain, Slovenia, Syria, Tunisia, Turkey.

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As no study characterizing the postal service sector has ever been conducted in the Euromed zone, we have set out here to pinpoint the main aggregates and characteristics.

The Euromed region’s postal sector today is a mature, profitable and buoyant market which directly employs almost 700,000 people. Total revenue generated by all the region’s post offices in 2007 was nigh on $55 billion, and despite low levels of regional integration within the Euro-Mediterranean area, postal service flows internationally account for almost 5% of total volumes.The regional asymmetry observed at the macro-economic level is naturally reflected in postal services: the French, Italian and Spanish postal services make a 90% plus contribution to the zone’s total postal service revenues and an 87% contribution to total volumes (60% and 43% respectively for La Poste Group alone). A more detailed analysis of postal service results in the Euromed zone also reveals significant disparities in terms of profitability, of exposure to international postal services and of levels of penetration with international integrators in the field of international parcel dispatch.

We have also attempted to assess the importance of intra-zone postal flows in order to estimate the potential of more highly developed postal service cooperation within the Euromed region. This represents about 18% of postal service revenue recorded internationally for the whole region. In 2007, intra-Euromed trading was very largely supported by inter-trading between countries from the north of the region.

The postal sector is a special sector of the economy owing to public service constraints, but is nonetheless growing. By 2015, we project an annual growth of 11%, sustained essentially by growth from postal services in the Southern Mediterranean. Total revenue generated by all post offices from the Euromed zone could be close to $58 billion in 2015, taking account of the world economic slow-down linked to the current economic crisis. Within the Euromed zone, international business is probably the leading growth driver for the postal sector: in 2015, international flows could represent one-third of total postal revenues. As Intra-Euromed exchanges are, structurally speaking, growing faster than international trading, by 2015 intra-Euromed postal flows could be making an 11% input to the zone’s total postal service revenues; this represents about 35% of postal service revenue achieved internationally for the region as a whole.

These results alone show the potential of more highly sustained postal cooperation within the Euromed region.

Executive Summary

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Given the growing share of intra-Euromed exchanges, the focus could be placed on four major avenues of cooperation: quality of service, customs and excise, the management of cash transfers by migrant populations and the development of electronic highways.

– All examples of cooperation in QS related projects clearly resulted in notable QS improvement. Adapted measures to the Euromed zone countries could thus most certainly help to boost the quality of service within the regional zone.

– The European customs directive of 2006, plus recently tightened security requirements in a certain number of countries around the world, have gotten the better of the postal service exception in terms of customs and excise. Potential for cooperation on the customs issue is huge and would help to anticipate multilaterally the adaptations and investment needed for the new regulations.

– On the question of migrant’s remittance transfers, Mediterranean zone postal services have long lost their natural market shares to independent operators and financial institutions: a concerted multilateral response could be the subject of a Euro-Mediterranean work group, especially since the busiest cash transfer corridors from migrant populations stretch across the Mediterranean Sea.

– Lastly, postal services cannot afford to miss out on the potential offered by the development of the Internet and related products such as hybrid mail. A certain number of European operators have successfully endeavoured to develop specific products. Regional cooperation on this issue could provide a considerable source of income for the future.

Regional cooperation is a first step towards the formation of a Euro-Mediterranean postal sector that measures up to its potential. The scope of action of Euro-Mediterranean postal services stretches very widely beyond the four avenues mentioned above.

The future of Euromed regional postal services will be played out according to their capacity to work together and to select and use the optimal aspects of cooperation and regional integration in the postal sector.

The Euromed postal community has to become the laboratory for the development of the Euro-Mediterranean economic space.

Executive Summary

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Note de Synthèse de l’étude

Après une vingtaine d’années de dérégulation, le monde est probablement en train d’achever l’ère du néolibéralisme dogmatique pour entrer dans celle d’une re-régulation. Une forte convergence de vues apparaît sur l’idée que cette régulation nouvelle se fera surtout àl’échelle des régions plus qu’à celle de l’économie mondiale (Alena, Mercosur, Asean, etc.) : la mondialisation prenant ainsi la forme d’intégrations régionales pour laquelle la région Euromed (1) accuserait un relatif retard par rapport aux autres régions du monde.

La région Euromed est souvent présentée comme la région symbolisant le fossé entre le Nord et le Sud.Entre le Sud de l’Europe et le Nord de l’Afrique subsiste, en effet, le plus important écart de voisinage au monde en termes de PIB par habitant : non seulement le ratio est de 1 à 6 alors qu’il est de 1 à un peu plus de 3 entre les Etats-Unis et le Mexique, mais il s’est accru tout au long des treize années qui ont suivi la signature du processus de Barcelone.

Toutefois, l’on ne saurait se limiter à l’étude des seuls indicateurs économiques. Les principaux indicateurs de développement humain montrent un véritable rattrapage des pays du Sud de la Méditerranée : la mortalité infantile oppose toujours le Nord au Sud mais l’écart se réduit incontestablement. La fécondité converge elle aussi. D’ores et déjà plusieurs villes de la rive sud de la Méditerranée présentent des taux de natalité à l’occidentale. Asymétrique mais néanmoins convergente, la région est bien trop complexe pour que lui soit appliquée la simple segmentation Nord/Sud.

Si de véritables différences existent au sein de la région Euromed, il n’en demeure pas moins qu’elle est un acteur incontournable de l’économie mondiale : 6ème zone en termes de population, 3ème zone en termes de PIB, juste après l’Europe et L’Amérique du Nord…

La région Euromed est structurée par de nombreux flux sur lesquels reposent la réalité économique, ainsi que la conscience largement partagée d’appartenance à une même entité : 30% des flux du commerce extérieur de la zone et 50% des flux migratoires à l’international sont en réalité des flux intra-zone.

Si l’intégration régionale semble ici plus lente que dans d’autres espaces du monde, les initiatives de coopération largement supportées par les fonds communautaires et nationaux sont nombreuses dans tous les secteurs de l’économie (financement de projets, banque, transport, télévision, etc.),sont autant de précédents à la nécessaire coopération postale.

Note: (1) la zone Euromed, telle que comprise dans le cadre de cette étude et de l’EuromedPostal intègre les pays suivants : Algérie, Chypre, Egypte, Espagne, France, Grèce, Israël, Italie, Jordanie, Liban, Libye, Malte, Maroc, Palestine, Portugal, Slovénie, Syrie, Tunisie, Turquie.

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Aucune étude du secteur postal dans la zone Euromed n’ayant jamais été réalisée, nous avons ici tenté d’en dégager les principaux agrégats et caractéristiques.

Le secteur postal de la région Euromed est aujourd’hui un marché développé, profitable et en plein essor, employant directement près de 700 000 personnes. Le chiffre d’affaires total généré par l’ensemble des postes de pays de la zone avoisine en 2007 les 55 milliards de dollars et, en dépit de la faible intégration régionale de l’espace euro-méditerranéen, les flux postaux à l’international représentent près de 5% des volumes totaux.L’asymétrie régionale constatée au niveau macro économique se retrouve naturellement au niveau postal : les postes française, italienne et espagnole contribuant à elles trois à hauteur de plus de 90% au chiffre d’affaires postal total de la zone, et à 87% des volumes totaux (respectivement 60% et 43% pour le seul Groupe La Poste). L’analyse plus détaillée des résultats postaux de la zone Euromed montre également de fortes disparités en termes de rentabilité, d’exposition de l’activité de postes à l’international ainsi que du taux de pénétration des intégrateurs internationaux dans le domaine des envois de colis à l’international.

Nous avons également tenté d’évaluer l’importance des flux postaux intra-zone afin de d’estimer le potentiel d’une coopération postale plus développée au sein de la région Euromed : les échanges internationaux intra-Euromed contribuent en 2007 à 5% au chiffre d’affaires postal total de la zone. Ceci représente environ 18% du chiffre d’affaires postal réalisé à l’international pour l’ensemble de la région. En 2007, les échanges intra-Euromed sont très largement soutenus par les échanges des pays du nord de la zone entre eux.

Le secteur postal est un secteur particulier de l’économie en raison des contraintes du service public mais néanmoins porteur. Nous prévoyons d’ici à 2015 une croissance annuelle de 11% essentiellement soutenue par le développent des postes du Sud de la Méditerranée : Le chiffre d’affaires total généré par l’ensemble des postes des pays de la zone Euromed pourrait avoisiner les 58 milliards de dollars en 2015, en tenant compte du ralentissement économique mondial lié à la crise économique actuelle. Au sein de la zone Euromed, l’international est probablement le premier vecteur de croissance du secteur postal : en 2015, les flux internationaux pourraient représenter le tiers du chiffre d’affaires postal total. Les échanges intra-Euromed augmentant structurellement plus vite que les échanges internationaux, les flux postaux intra-Euromed pourraient contribuer en 2015 à 11% au chiffre d’affaires postal total de la zone, ce qui représente environ 35% du chiffre d’affaires postal réalisé à l’international pour l’ensemble de la région.

Ces résultats démontrent à eux seuls le potentiel d’une coopération postale plus soutenue au sein de la zone Euromed.

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Compte tenu de la part croissante des échanges intra-Euromed, quatre axes majeurs de coopération pourraient être privilégiés : la qualitéde service, les douanes, la gestion des transferts d’argent des migrants et la création d’autoroutes électroniques.

– Tous les exemples de coopération sur la question de la qualité de service ont montré une nette et rapide amélioration de cette dernière. Des mesures adaptées à l’ensemble des pays de la zone Euromed pourraient très certainement permettre d’améliorer la qualité de service à l’intérieur de l’espace régional.

– La directive douanière européenne de 2006, ainsi que les exigences sécuritaires revues à la hausse dans un certain nombre de pays du globe ont eu raison de l’exception postale au niveau douanier. Le potentiel de coopération sur la question douanière est énorme et permettrait d’anticiper multilatéralement les adaptations et les investissements nécessaires aux nouvelles réglementations.

– Sur la question des transferts d’argent, les postes de l’espace méditerranéen ont depuis longtemps perdu leurs parts de marchénaturelles aux dépens d’opérateurs indépendants et des institutions financières : une réponse multilatérale concertée pourrait faire l’objet d’un groupe de travail euro-méditerranéen, d’autant plus que les corridors des transferts d’argent des migrants les plus importants traversent la mer Méditerranée.

– Enfin, les postes ne peuvent passer à coté du potentiel qu’offre le développement d’Internet et des produits qui y sont affiliés comme le courrier hybride. Un certain nombre d’opérateurs européens se sont employés avec succès à développer des produits spécifiques. La coopération régionale sur ce sujet pourrait être une source considérable de revenues pour le futur.

La coopération régionale est un premier pas vers la constitution d’un secteur postal euro-méditerranéen à la hauteur de son potentiel. Le champ d’action des postes Euro-méditerranéennes dépasse très largement les quatre axes que nous avons mentionnés ci-dessus. L’avenir des postes de la région Euromed se jouera sur leur capacité à travailler ensemble et à retenir le meilleur de la coopération et de l’intégration régionale dans le secteur postal.

La communauté postale Euromed se doit de devenir le laboratoire du développent de l’espace économique euro-Méditerranéen.

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• Scope of the project• Introduction to the Postal Euromed

Table of content

General Introduction

Presentation of the Euromed region

Overview of the Postal Euromed market

Conclusion and next steps

Appendix

Globalisation has been the world’s main disruption but also driver over the past decades. After many years of frantic neo-liberalism, the world is getting back to some form of regulation. The ALENA, the ASEAN+3, the MERCOSUR as well as European Union are a few examples of how regionalisation is structuring today.

However, when looking at Mediterranean integration, the region is clearly lagging behind partly due to weak political commitment in this area: Will the region miss the bus of regionalisation or will it be ready to become a major player?

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RATIONALE AND PRIORITIES

The postal sector is a key component of regional growth which contributes efficiently to:

– Regional transportation, environment, urban mobility policy, etc. – Access to information, education– The support to small and medium size companies– The reallocation of migrant’s money– Micro finance promotion

PROJECT BACKGROUND

The first Postal Euromed conference was organised by the La PosteGroup in Marseille in July 2007 around 4 major ideas of cooperation:

– Regulatory convergence– Migrant’s money– Common SME offer– Security

Following the Marseille conference, some participants asked whether a more business focussed but also more operationally-oriented approach could be considered

Initial Postal Euromed Members

Note (1) Slovenia asked to join The Postal Euromed initiative after the 1st Postal Euromed conference

Posta SlovenijeSlovenia (1)

Palestinian Postal ServicesPalestine

PTTTurkey

Correos y TelégrafosSpain

Syrian PostSyria

Algérie PostAlgeria

Cyprus Postal ServiceCyprus

Egypt PostEgypt

Groupe La PosteFrance

ELTAGreece

Israel PostIsrael

Poste ItalianeItaly

Jordan Post CompanyJordan

Liban PostLebanon

G.P.T.CLibya

Malta PostMalta

Poste MarocMorocco

CTT CorreiosPortugal

La PosteTunisia

Introduction to the Postal Euromed project for more cooperation

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LIntroduction to the Euromed Postal Community (EPC) project for more cooperation (Cont’d)

A new partnership tool covering the economical and commercial aspects was consequently proposed, named for the time being, “Euromed Postal Community (EPC)”.

The first kick off meeting of “Postal Euromed Community” took place at the Postal conference on Regional Postal Cooperation (in April 2008), organised by Egypt Post

Since then, the potential of the Euromed region has been globally acknowledged by postal operators and other Mediterranean union advocates like ANIMA who manages the Invest In Med programme

This study has been financed in part by the Invest In Med programme based on a request for initiative to which La PosteGroup responded on behalf of the Postal Euromed members. It was decided to give the mandate to carry out the study to CVA, an independent consulting firm, for the sake of preserving confidentiality around data considered to be sensitive by many posts

Another opportunity study focused on money order transfers and additional adapted financial services for postal operators, for the Euro-Mediterranean region, has also been granted financing under the same programme

NEXT STEPS

Both studies shall be presented and discussed on the occasion of a meeting to be held in Cairo this October

Postal Euromed members have been invited to sign a joint-declaration in favour of the constitution of a top level committee. This working group shall have the mandate to deliver a feasibility study to determine the structure of the future multilateral “Euromed Postal Community”: legal status, governance rules, mission statement, objectives, resources & financing, cost key sharing principles, opt in opt out, etc.

The Cairo meeting in October will also serve as the kick-off meeting of the top level committee.

Ultimately, the proposal of the working group is to be presented for discussion and decision on go ahead, to postal CEO’s at the Second Postal Euromed conference which is due to take place end of 2009 – beg. 2010 in Alexandria

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Globalisation and regionalisation

After many years of strong neo liberalism, the world is getting back to some form of regulation

Source: ESPON

Trade exchanges highlight the existence of economic preferential regional areasThe Euromed region clearly appears to be one of them structured by the Southern side of the European Union and the Northern sideof Africa and is meant to develop further as the neighbouring environment is developing

• “ Regionalisation is the dominant form of globalisation, for two reasons :

• Firstly, the enlargement of exchange scales provokes global flows but above all enhances all types of exchanges between a nation-state and its bordering areas. Firms find many interests in locating in remote dynamic areas; but they find it very convenient to ”near-shore” too. The strategic advantages of proximity are growing as the oil price increases and consequently travel and transportation costs rise.

• Secondly, the need to re-regulate the world economy is an important driving force here in response to the excesses of the era of borderless ‘footloose’ capitalism”

Source : ESPON

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The world main regions today and in the future

Source: CVA Analysis

The global economic environment is structured by 4 regional free trade areas: the Nafta, the Mercosur, the European Union and the AseanThis regional organisation of the global economic space is meant to strengthen by more integration at a continental scale

NAFTA 3

MERCOSUR 5 + 5

ASEAN 10 + 3

EU 27+ 8

Current regionalisation

Future possible

regionalisation

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Mediterranean regionalisation making up

Concrete cooperation (environment, etc.)

ProjectProjectSocial and political Union

ProjectProjectProjectLaw harmonisation

ProjectProjectFree trade area

28th November 19958th August 196726th Mach 19911st January 19941st November 1993Creation date

PostEurop/CERP

EUROPEAN UNION NAFTA 3

Postal Cooperation

Economic Union

Common Market

Custom Union

Preferential trade area

EUROMEDASEAN 10 +3MERCOSUR 5 + 5

Project

ASEAN Economic Community (2015)

Asian Pacific Postal Union

Source: Interview, CVA Analysis

Comparative table of Regional Integration and cooperation

• The Euromed region is clearly lagging behind others in terms of regional integration and cooperation partly because of weak political commitment in this region

• The Euro-Mediterranean Partnership (or Barcelona Process) started in 1995 with the Barcelona Euro-Mediterranean Conference. It was organised by the European Union to strengthen its relations with the countries in the Mashriq and Maghreb regions

• On July 13th 2008 French President Nicolas Sarkozy initiated the Mediterranean Union in the wake of the Barcelona Process, The Mediterranean Union would be a looser group than what the current EU is. President Sarkozy called on the Mediterranean people to "do the same thing, with the same goal and the same method“

• The 2008 Union pour la Mediterranée idea is to build economic/political privileged relationships between Europe, North Africa and the Middle East

UPAEP

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The potential of growing Mediterranean integration

“The Mediterranean can be turned into a sustainable growth driver for the world economy; it offers a new development model and a new model for international relations”

“Everything that is so sorely lacking in the North (young people, markets, energy) is to be found in abundance a few hundred kilometers to the South; likewise, everything that is lacking in the South (technology, organisation, investments, productivity and a favourable environment), is to be found in the North. Beyond being a cradle for new economic relations, the region has the potential to be a laboratory for a new development model that harnesses the region’s diverse civilizations to rise to the staggering challenges of climate change in the region and invent the energy of tomorrow”

IPEMED Political Patronage CommitteeApril 29th, 2009

The Euromed integration is perceived as a highly attractive opportunity

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Table of content

• Overview of the Euromed region


Presentation of the Euromed region



Appendix

The Euromed region is usually perceived to have economic, political and cultural differences between the Northern and Southern sides of the Mediterranean Sea that still need to be bridged. To what extent is this justified?

The Euromed Region has turned into a key player in the global economy structured by the reality of numerous intra-zonal flows. However, the lack of current common political willingness within the Euromed area, make regional integration and cooperation only achievable through concrete projects regardless of any sector in the economy.

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The Euromed gap ?Economic indicators: static overview

Source: IMF WEO (04/09), CNUCED, CVA AnalysisNote: (1) Cyprus, France, Greece, Italy, Malta, Portugal and Spain; (2) Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Syria, Tunisia, Turkey; (3) 2007A population weighted; (4) 2007A GDP weighted; (5) Report by Andrea Canino President of the Economic Cooperation Council and president of the EcoMed council $=US$

Comments

2007A figures % Euromed 2007A figures % EuromedPopulation (million) 188 42% 260 58%GDP 2007A ($bn) 6 704 83% 1 345 17%GDP per capita 2007A ($) 35 586 71% 14 656 29%Inflation rate (avg. consumer prices) 4% 9%Unemployement rate (%) 8% 9%FDI Inwards ($bn) 262 80% 70 22%

North Side South Side

1

23

4

(3)

(4)

• In terms of GDP per capita (PPP) the gap between the two sides of the Mediterranean sea is the world’s biggest (1-6)– This ratio for the USA compared to Mexico is only 1-3– This GDP gap has increased over the 13 years of the Barcelona process– According to the Economic Cooperation Council (5) at the current growth path it will take the south side of the Euromed area 20 years to

catch up the United States-Mexico 1-3 ratio

• Inflation is lower on the North side of the Mediterranean sea partly because of EU standards

• The unemployment rate is still rather high in both regions, on the south side of the Mediterranean sea, the job market is to suffer the pressure of the arrival of the new generations: economists forecast an average additional 2.5 million new workers to be absorbed per year in the South Euromed between 2009 and 2030

• FDI Inwards amounts in South Euromed countries have been increasing over the past 5 years thanks to a better business environment

2

3

4

1

(1) (2)

78%

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The Euromed gap ?Economic indicators: dynamic overview

Source: IMF WEO (04/09), CVA AnalysisNote: (1) Cyprus, France, Greece, Italy, Malta, Portugal and Spain; (2) Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Syria, Tunisia, Turkey

Economic indicators clearly highlight that the gap is already sizeable and growing between the 2 sides of the Mediterranean Sea

0

1000

2000

3000

4000

5000

6000

7000

8000

1980 1985 1990 1995 2000 2005 2010 2015

Euromed - North Side(1)

Euromed - South Side(2)

GDP (PPP) bn$FORECASTS

CAGR 1980A-2001A : 4%

CAGR 1980A-1985A : -3%

CAGR 2001A-2007A : 12%CAGR 2007A-2015E : 1%

CAGR 2001A-2007A : 14%CAGR 2007A-2015E : 4%

CAGR 1985A-2001A : 6%

CAGR 1980A-1985A : 2%

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Sources: http://stats.uis.unesco.org; http://www.who.intNote: Female illiterate population (%): Algeria 1987, Cyprus 1992, Egypt 1986, Spain 1981, Greece 198, Italy 198, Jordan 1979, Libya 1984, Malta 1985, Morocco 1982, Portugal 198, Slovenia 199, Syria 198,Tunisia 1984, Turkey 1980

The Euromed gap ?Nonetheless, development indicators, which must also be taken into consideration, clearly show the gap bridging between the North and the South side of the Mediterranean Sea

The Euromed area is a complex region; sharing a common culture and history for centuries. If economic differences prevail, humanindicators converge in the area and strengthen the consciousness of belonging to a common region

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Source: ANIMA, MIPO, CVA Analysis

The Euromed region is a complex region: non symmetrical yet convergent, the traditional North/ South segmentation is too simple to be applied to this regionForeign Direct Investments (FDIs) best reflect the complexity of this region

The Euromed region is strongly structured by the Latin Arc (Portugal, Spain, France, Italy, Greece, Slovenia)As far as FDIs are concerned, the area is clearly asymmetrical and the South side of the Mediterranean sea is dependant on Northern side investmentThere is no South/South solidarity as shown by the weakness of South/ South investmentNonetheless, Middle Eastern countries are to be counted among the main investors on the South side of the Mediterranean seaFDI policies highlight preferential bilateral relations between some countries of the area

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Because of credit market drying out? investment from the Gulf area have decreased in 2008, Europe taking over again as the first provider of FDI in the South Euromed region (c.41% of the region’s FDI)

France

Morocco

Algeria

Tunisia

LibyaEgypt

JordanIsrael

Cyprus

Turkey

Greece

LibyaEgypt

Jordan

Cyprus

Turkey

Germany

Libya

Turkey

Israel

Egypt

TunisiaMoroccoAlgeria

Malta

Spain

Libya

Turkey

Egypt

TunisiaMorocco

Algeria

Jordan

Italy

Egypt

Malta

Libya

Tunisia Israel

Turkey

United Kingdom

MoroccoAlgeria

Tunisia

LibyaEgypt

Israel

Malta SyriaCyprus

Turkey

10 000 5 000 1 000 100 1018 860

FDI outflow announcement amount (€m)

Source: Ipemed, MIPO, CVA Analysis

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A dynamic region

Source: IMF WEO (04/09), CVA AnalysisNote: (1) 2007A population weighted; (2) GDP weighted; (3) Mexico, Guatemala, El Salvador costa rica, Panama, Honduras, Jamaica, Ecuador, Colombia, Argentina, Chile, Bolivia, Paraguay, Uruguay, Brasil, Guyane, Surinam, Venezuela; (4) Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, VietnamSpain, Portugal, Italy, France, Malta, Cyprus have been counted twice for the Mediterranean Union and in the Euromed region

The Euromed region is a key player in the global economy

Population (million) 448GDP 2007A ($bn) 8 096GDP per capita 2007A ($) 17 950Inflation rate (avg. consumer prices) 5%Unemployement rate (%) 9%

The 3rd Regional GDP

EUROMED 2007 KEY FIGURES

(1)

(1)

(2)

GDP 2007A ($bn)

15 244

3 545

3 280

5 6571101

North America

South America (3)

European Union

EuromedSoutheast Asia +

Japan

China

India

GDP CAGR 2000A-2007A (%)

6 %

9 %

10 %

13 %

15 %

1%11%

(3)

(4)

16 906

(5)

8 096

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Focus on population

Source: IMF WEO (04/09), CVA AnalysisNote: (1) Mexico, Guatemala, El Salvador, Costa Rica, Panama, Honduras, Jamaica, Ecuador, Colombia, Argentina, Chile, Bolivia, Paraguay, Uruguay, Brazil, Guyana, Surinam, Venezuela; (2) Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam;(3) Spain, Portugal, Italy, France, Malta, Cyprus have been counted twice for the Mediterranean Union and in the Euromed region


Human and economic indicators clearly show that the Euromed region is a key player in the global economy

The 6th most populated region

Population (million)

North America

South America

(1)

European Union

EuromedSoutheast

Asia + Japan

China

India

335

485

492

1 169448

1 321

(2)

637

2007A GDP ($bn)

PopulationCAGR 1980A-2007A (%)

GDP CAGR 1980A-2007A (%)

2

3

4

5

6

7

8

9

-1 0 1 2 3 4

Algeria

France

Italy

Spain Turkey

Greece

Portugal

Israel

Egypt

Morocco

Libya

Slovenia

Syrian Arab Republic

Tunisia

Lebanon

Cyprus

Jordan

Malta

XXX

(3)

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5% 5%3%

1%

5%6%

2%Euro

med

S.A N.A

SEA+Jap

an

China

India EU

A dynamic region (cont’d)

Source: IMF WEO (04/09),CIA Factbook, CVA AnalysisNote: (1) 2007A population weighted, (2) GDP weighted; (3) South America, (4) North America; (5) Spain, Portugal, Italy, France, Malta, Cyprus have been counted twice for the Mediterranean Union and in the Euromed region


9%

5%

7% 6%

4%

7% 8%

Euromed

S.A N.A

SEA+Jap

an

China

India EU

8 096

3 545

15 244

5 6573 280

1 101

16 906

Euromed

S.A N.A

SEA+Jap

an

China

India EU

2007A Main indicators comparison

POPULATION (million)

GDP ($bn) INFLATION (avg. consumer prices)

UNEMPLOYMENT (%)

448 438 485 386334 849

637 198

1 321 0521 169 016

491 583

Euromed

S.A N.A

SEA+Jap

an

China

India EU

100%

(1)

(2)

(3) (4)(5) (5)

(5)(5)

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Source: ATKearney Shifting Geography of Offshoring

Thanks to relatively stable business environment and comparative advantages intelligently put forward, countries of the Mediterranean sea are among preferential outsourcing destinations


Southern Euromed is emerging as a very attractive offshoring destination for the WorldIn 2004, only 2 South Euromed countries were ranked amongst part of the 50 best locations for outsourcing, 3 years later, 5 more countries join the listInvestors are mainly attracted by:

– Relatively stable business environment• Relatively low economic, financial, security and

political risks• Low regulation burden and employment rigidity• Quality of the infrastructure facilities• Security of intellectual property

– People skills• Workforce availability• Qualified labour force• Global education and language

– Financial attractiveness• Relatively low tax and regulatory costs• Low infrastructure costs• Relatively low compensation costs

– Geography

Countries of the Mediterranean rim have successfully known how to enhance their competitive advantages to attract business investors

Countries of the Mediterranean rim are overriding Eastern European countries as investors outsourcing preferential areas for outsourcing in the eyes of foreign investors

9

13

3032

3840

44

6

1314

9

17

26

18

15

19

3336

16

37

24

18

12

41

4849

4543

49

38

50

46

Egypt

Jordan

Bulgaria

TunisiaEstoniaRomania

MoroccoCzech Rep

HungaryPolandSlovakiaFranceTurkeySpain

Portugal

2007 Rank

2009Rank

Israel

OUTSOURCING PREFERENTIAL DESTINATIONS

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Source: UN Comtrade Database, CVA Analysis

External trade is already the databone to cooperation for the Euromed region

Regional flows represent an average 30% of the region’s global external trade

$

$

$

$

$

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Source: UN Comtrade Database, CVA AnalysisNote: (1) International flows

The Euromed region is structured by concentrated intra-zonal flows(1) of all typesThe region is the main trading outlet of every country for the Euromed region

This represents respectively an average 31 % and 32% of total export flows for the countries located on the North and on the South side of the Mediterranean rim; 27% and 26% of their respective import flows

0%

10%

20%

30%

40%

50%

60%

70%

80%

Algeria

Cyprus

Egypt

France

Greece

Israel

Italy

Jorda

nLe

bano

n

Libya

Malta

Morocc

oPort

ugal

Slovenia

Spain

Syria

Tunisi

aTurk

ey

2007A Exportation to the Euromed Area (% of total)

2007A Importation from the Euromed Area (% of total)Euromed import (as of % World)Euromed export (as of % world)

nana

27%

31%

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Source: Source: Global Migrant Origin Database, Updated March 2007, CVA AnalysisNote: This map should be analyzed considering stopover migration especially when it comes to intra-European flows e.g. people from Brazil entering stopping over Portugal etc. (1) International flowsOnly legal migration flows have been represented

Human migrations have forged the region’s unity consciousness

If the majority of migrants flows are South to North flows, South to South migration to neighbouring countries is also very importantStudent and tourists migrations also correspond to very significant flows : intra-Euromed migrants representing over 50% of the international migration flowThe difficulties to be granted a visa accounts for the weakness of South to North flows

The Euromed region is structured by concentrated intra-zonal flows(1) of all types

2007

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Source: World Bank, University of Sussex, CVA AnalysisNote: (1) International flows

The Euromed region is structured by concentrated intra-zonal(1) flows of all typesHuman migrations stimulate intra-zonal remittance financial flows

Workers' remittance compensation represent circa 18% of the World’s total remittance flowsFrance and Spain are respectively the 5th and 6th countries in terms of remittance receipt for the year 2007

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Source: World Bank, CVA AnalysisNote: Only values over 100 have been represented

The Euromed region is structured by concentrated intra-zonal(1) flows of all types

Human migrations stimulate intra-zonal remittance financial flows (cont’d): Focus on main money transfer corridors

48%

North > North

42%

North > South

South > North South > South

48% of remittance flows circulate from countries of the North side of the Euromed to other countries of the same area. This is mainly due to the retirement pensions effect of the sixties Southern Europe migrants to France who returned to their home countriesIt is also important to highlight the importance of remittance flows from France and Spain to Morocco and Algeria representing c. 27% of the total intra-Euromed remittance flows

Slovénie

TurquieEspagne

Tunisie

Italy

Spain

Algeria

Tunisia

Turkey

Libya

Egypt

Israël

France

Morocco

Lebanon

1 5861 523

2 272 2 312

1 171

Portugal

Main remittance flows corridors

($,million)

100 -1 0001000-2000> 2 000

1 586 Value of flow

South to North flow

South to North flowNorth to North flow

3%7%

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Source: ITA, CVA AnalysisNote (1) International flows; (2): 10% North to South flows and 11% South to North flows

The Euromed region is structured by concentrated intra-zonal(1) flows of all types

In terms of volume, passengers flows are highly concentrated on the North side of the Mediterranean rim, intra North flow representing c.76% of the total of passenger flowsDespite the tourist potential of the Euromed area, flows between the two sides of the Mediterranean only represent c 21%(2) of passenger trafficOnce more the weakness of South to South flows (c.3% of the total flows) appears as a main trait of the Euromed region

Student and tourists migrations also contribute to very important intra-zonal migrants representing over 50% of the international migration flow

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76%North > North

10%North > South

11%

South >NorthSouth > South

Source: ITA, CVA AnalysisNote (1) International flows

The Euromed region is structured by concentrated intra-zonal(1) flows of all typesFocus on airway passenger flows (cont’d)

65%North > North

9%

9%North > South

South > SouthSouth >North

The majority of passenger flows are North to North flowsFlows from Southern countries of the Euromed region to other countries located South of the South side of the region, remain very weak

0%

20%

40%

60%

80%

100%

Alge

ria

Cyp

rus

Egyp

t

Fran

ce

Gre

ece

Isra

el

Italy

Jord

an

Leba

non

Liby

a

Mal

ta

Mor

occo

Portu

gal

Slov

enia

Spai

n

Syria

Tuni

sia

Turk

ey

Analysis by Country Global Regional Analysis

0%

20%

40%

60%

80%

100%

Alge

ria

Cyp

rus

Egyp

t

Fran

ce

Gre

ece

Isra

el

Italy

Jord

an

Leba

non

Liby

a

Mal

ta

Mor

occo

Portu

gal

Slov

enia

Spai

n

Syria

Tuni

sia

Turk

ey

Outbound Flow

Inbound Flow

Euromed North Side

Euromed South Side

2%

3%

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Source: Euromed TransportNote: Libya has observer status in the Euro-Mediterranean Partnership. (1) Cyprus and Malta joined the European Union in 2004 and are no longer considered as MEDA countries. Nevertheless, due to their strategic importance for transport in the Mediterranean region, they continue to be involved in this project.

A regional cooperation and integration to be built on concrete projects regardless of any sector in the economy

In the framework of the MEDA II programme the European Commission decided, in November 2001, to undertake the first Euro-Mediterranean regional transport project (‘EuroMed Transport Project’) with a financial allocation of €20m

General objectivesContribute to the overall economic and social development of MEDA countriesthrough increased and more sustainable transport flows, more competitive trade and better balanced exchangesImprove the quality, safety and efficiency of goods and passenger transport systems in the regionSupport the development of integrated multimodal transport networks and infrastructure, leading to improved transport flows, better connections and reductions in bottlenecks

Specific ObjectivesContribute to the development of the Euro-Mediterranean Free Trade Area and promote economic integrationImprove the functioning and the efficiency of the Mediterranean transport system by giving support to institutional and market reformsDeveloping and modernising the regional transport infrastructure network and ensuring its interconnection to the trans-European networks

Multimodal scope: The project examines all transport modes and sectors.

Participatory approach: Beneficiaries and stakeholders are closely involved in defining the project activities and outcomes.

Action-oriented outputs: The project focuses on short- and medium-term measures.

Multi-level focus: All policy-making levels are taken into consideration.

Objectives Approach Structure

The Main Contract focuses on institutional and policy issues, while the Infrastructure Contract targets the physical network of transport infrastructure.

The Motorways of the Sea (MOS) Contract specialises on measures aimed at reinforcing short sea shipping and intermodal transport in the Mediterranean.

Main beneficiaries are : Algeria, Cyprus(1), Egypt, Israel, Jordan, Lebanon, Malta(1), Morocco,

Palestinian Authority, Syria, Tunisia and Turkey€20m

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Source: Press

A regional cooperation and integration to be built on concrete projects regardless of any sector in the economyCooperation agreement between ten Euro-Mediterranean banks: concrete assertion of the geographical, cultural and economic identity of the Mediterranean region

On January 30th, 2009 ten financial institutions have signed a cooperation agreement, thus initiating twenty concrete projects

Objective: 20 projects focused on the following areas: financial transfers; products related to banking services, insurance and real estate; support and assistance geared at SMEs; the financing of infrastructures and major projects and the question of a permanent organisation

Two transverse projects involving the group as a whole:– Creation of a specific identity, via a permanent legal structure and brand name – Creation of a joint catalogue of products that each member will offer to migrant workers, published online on a joint website.

Projects designed to favour financial transfers:– Development of an efficient, open and flexible platform for the transmission of migrant workers' funds– Work on an "account to account" system between the members of the alliance in order to reduce the cost of fund transfers– Implementation of "bank card to bank card" transfer solutions along different corridors within the geographical region

Projects related to banking, insurance and real estate products:– Twinning of a savings product in the North with a savings product in the South– Definition of joint strategies designed to drag new customers through the definition of processes– Possibility to offer co-branded products -real estate products– Development of loyalty programs– Distribution of a pack for students from the South moving to Europe

Projects favouring financing solutions for SMEs:– Support for the international development of SMEs, support for migrant workers wanting to create their own companies etc. – Use of specialised loan models with the guarantee of various players to provide SMEs with better financing solutions– Facilitation of information exchanges related to business opportunities and, ultimately, the creation of a joint platform– Signature of a multilateral agreement to facilitate the growth of client SMEs

Projects related to the financing of infrastructures and major projects– A specific agreement has been signed to facilitate financing solutions of this type while simultaneously pooling the risks– Institutionalisation of an information exchange system between the partners– Sharing business opportunities– Commitment to develop investment or joint investment in investment funds

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Source: COPEAM

A regional cooperation and Integration to be built on concrete projects regardless of any sector in the economyThis type of cooperation has already given birth to concrete projects in some fields of the economy: focus on a TV project

The Postal sector through further development of the Euromed Postal Community could be one of the drivers of this win-win Euromed integration

Terramed is a channel devoted to selected programmes on culture, art, history, traditions, economy, tourism, food, environment, to be promoted in the whole Euro-Mediterranean regionThis experimentation aims at consolidating the partnership settled around an innovative TV product that fulfils the aim of favouring multilateral and international projects as well as of promoting Euro-Mediterranean contentsThe official launch of TERRAMED has taken place in the framework of COPEAM Conference of Cairo (16-19 April 2009)

EuroMed News is a broadcasting exchange program monitored by the French Group France Televisions and financed by the European CommissionThis initiative aims at informing the audience of the South Mediterranean region on the cooperation actions between EU and these countriesit consists in producing and broadcasting,

during 14 months, 9 documentaries, 40 magazines and 300 news

Med-Mem consists in digitizing, editing and uploading on a dedicated website the Mediterranean audiovisual archives The established partnership, grouping 18 organizations from 12 countries of the Euro-Mediterranean zone among which 10 public televisions, will cooperate during the next three years to achieve the following common objectives supported by the projects: preservation, valorisation of the Mediterranean heritage and its widest access by the audiences

.

@

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The Euromed Region benefits from special attention from the European Union and its members since the Barcelona conference in the frame of European neighbouring policyBut because of its economic potential the Euromed region also attracts private investors from all over the world especially form the Gulf, attracted by the natural resources of the areaFinally the political promotion of the Euromed area and the joint expressed commitment for more cooperation have led to the development of dedicated fund investing in countries or specific projects in the regionThe Euromed is dragging many financing from various actors. However, it is a very difficult exercise to provide a precise figure for the amount of money allocated to the region Still, the potential is huge especially when it comes to money coming from private investors

EUROPEAN UNION• European Investment Bank• Regional Programs• Bilateral Aid: France : 1st country with c.

€700m per year• European Neighbourhood and Partnership

Instrument: c. €3bn dedicated to South Euromed(1)

• Etc

PRIVATE INVESTORS

National fund, Islamic banks

DEDICATED FUNDS

Tunivest, Inframed, etc

€7,5bn (2007-2013)

SOUTH EUROMED FINANCING

INSTITUTIONSNational fund (inv. in

natural resources, etc.), African Dev. :

Bank, etc

OTHER

InfraMed• Created April, 30, 2009 by Caisse des Dépôts

(France), Cassa depositi e prestiti (Italy), EFG Hermes (Egypt) and Caisse de Dépôt et de Gestion (Morocco)

• Long-term investment fund and the first financing facility of the Union for the Mediterranean

• InfraMed will invest its €600m in infrastructure projects compliant with social and environmental responsibility criteria

European Union South Euromed

Source: PressNote : (1) No estimation can be made for this type of financing(1) Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Syria, Tunisia

TBD(1) TBD(1) TBD(1) TBD(1)

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Presentation of the Euromed area



Appendix

Table of content

• Overview of the Euromed area• Focus on intra-zonal flows

The Postal Euromed is a mature market, booming and profitable yet heterogeneous. The majority of Euromed international flows are in reality intra-zonal flows structuring the area at a postal level

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A growing region with a profitable postal market

Total Euromed region financial statement and key figures

Comments

Operating revenues for the total postal Euromed sector have increased by 10% CAGR from 2005A to 2007A mainly because of:

– The global increase of the postal volume

– Diversification of the product offer to higher contribution products

Operating margin has fallen from 28% to 8% because of:

– Negative net results of some postal operators in 2007A (e.g. Jordan Post company and Poste Maroc)

– Operating margin varies greatly from one country to another: Algérie Poste +28% vs. Elta 1%) partly due to national wages differences

Average postal item / inhabitant is rather high mainly because of Slovenia’s high average postal item per inhabitant

– The Euromed postal market is very heterogeneous and shows tremendous differences in national postal habits

Despite international exchanges within the region (especially remittances flows), the international exposure of the Euromed region is rather low (5%)

Postal financial penetration is increasing while the access to banking services is improving in the countries on the South Bank of the Mediterranean sea

Postal financial services have turned into a key growth driver for Posts in the upcoming years and thus represents a challenge andagreat opportunity for the Postal Euromed project at the same time

1

2

3

4

5

1

2

3

4

5

Source: UPU, CVA Analysis

BACKGROUND DATA 2005A 2006A 2007ATotal employee 692 740 695 282 692 681Total permanent post offices 52 415 52 610 57 195Total sorting centres 376 362 355Average postal items / inhabitant 92 73 79

FINANCIAL SERVICES 2005A 2006A 2007A# giro accounts 14,5 16,3 18,2# postal savings bank accounts 44,4 46,8 50,1

FINANCIAL STATEMENTS 2005A 2006A 2007AOperating revenue ($m) 41 349 45 813 54 197

Growth (%) 11% 18%Operating result ($m) 11 719 12 906 4 476Operating margin (%) 28% 28% 8%Net result ($m) 663 2 175 2 763

Growth (%) 228% 27%

VOLUME (million items) 2005A 2006A 2007ADomestic Volume 46 223 46 587 46 496International Volume Outbound 1 158 1 117 947International Volume Inbound 1 187 1 084 1 334

Total International 2 345 2 202 2 280TOTAL 48 568 48 789 48 776

% Domestic Volume 95% 95% 95%% International Volume 5% 5% 5%

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Source: UPU, CVA AnalysisNote: due to the lack of available data Israel Post, Liban Post and GPTC are not represented(1) including financial services

The strong weight of the Postal Euromed is due to the size of some operators such as the Spanish, the Italian or the French Posts representing altogether by themselves c. 92% of total Euromed weight in terms of operating revenue

The Postal Euromed appears to be a heterogeneous area characterised by a tremendous gap between operators

A growing region with a profitable postal market (cont’d)


National Postal operators (NPO) Operating Revenues(1) Euromed total Postal Operating Revenues(1)

Groupe La Poste

Correos y Telegrafos

Poste Italiane

TurkeyPost

CTT Correios

Egypt Post

Elta

Algérie Poste

Poste Maroc

La poste (Tunisia)

Cyprus Postal Service

Malta Post SyrianPost

Jordan Post Company

Posta Slovenije

G.PT.C.

$ 750 m

$ 54 197 m

KEY FIGURES 2005A 2006A 2007AEuromed operating revenue (% World) 22,8% 22,6% 25,2%Euromed population (% World) 6,8% 6,7% 6,6%Euromed total number of employee (% Worl 12,7% 12,6% 12,5%Euromed number of post offices (% World) 7,9% 8,0% 8,7%

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A growing region with a developed postal market

Source: UPU, WEO (04/09), CVA AnalysisNote: (1) 2006 figures, (2) Liban Post as well as Jordan Post do not deliver mail at home, postal items are to be collected at post offices. We have aligned Liban Post on Jordan Post coverage

Focus on quality coverage

The Euromed region clearly appears to be a mature postal market with an average 90% of the population being delivered mail to their doorstepAccess to high development standards leads to a better geographical coverageJordan Post, Poste Maroc and the Syrian Post who are facing the challenges of irregular population density, are lagging behind the rest of Euromed countries in terms of coverage

40%

50%

60%

70%

80%

90%

100%

110%

0 5 000 10 000 15 000 20 000 25 000 30 000 35 000

% of people being delivered mail to

their home

# inhabitant/ office

Algérie Poste(1)

Turkey Post

Egypt Post

CTT Correios

Cyprus Post Services

Poste Maroc

La Poste(Tunisia)

Jordan Post Company

Syrian Post


PosteItaliane

Groupe La Poste

Liban Post (2)

Etla

Euromed Average

Israel Post

10 000 GDP per Capita

Malta Post

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A growing region with a developed postal market (cont’d)

Case Study: Comparison Euromed Area / Southeast Asia Area

Source: UPU, WEO (04/09), CVA Analysis

Focus on Postal Markets

The postal sector is more developed in the Euromed region with an average postal item per capita of 79 vs. 14 for Southeast Asia

International postal traffic in the Euromed region is five times as important as in Southeast Asia area

Despite the weight of regional postal markets, international traffic only represents a mere 5% of postal operators activity, which indicates that international flows are meant to become key growth drivers in the future

For the sake of this case study, we have retained the following scope of countries for the definition of "Southeast Asia" vary, encompass the following countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

Population (2007A)– Euromed: 448m people– SEA: 571m people

Developing economies of Southeast Asia can easily be compared to developing economies of the Euromed region

– Average 2007A GDP for South Euromed: c. $126Kbn – Average 2007A GDP for South East Asia: c. $141Kbn

A neighbouring sea forging ties for centuries– Trading ties– Human ties from intra-zone migration

Strong identity and a commitment towards regional cooperation:

– From Barcelona process (1995) for a free trade area to the UPM (2008) project

– Association of Southeast Asian Nations (ASEAN): geo-political and economic organisation (1967)

Various common characteristics facilitate comparisons between the two areas

(items, million, year 2007A) Total Euromed Total SEA

VOLUMESTOTAL VOLUME 48 776 5 520Total international volume 2 280 273

(% of Total Volume) 5% 5%

Domestic volume 46 496 5 247(% of Total Volume) 95% 95%

International outbond volume 947 97(% of Total International Volume) 42% 36%

International inbond volume 1 334 176(% of Total International Volume) 58% 64%

REVENUESTotal operating results ($m) 54 125 1 441

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-

+

Source: UPU, CVA AnalysisNote: (1) 2005 figures, (2) 2006 figures, (3) Ernst&young BaroMed Attractiveness SurveyDue to lack of available data, Israel Post, Liban Post and GPTC are not represented

-+

+-

A growing region with a developed postal market (cont’d)

Case Study: Comparison Euromed Area / Southeast Asia Area (cont’d)

The Euromed region benefits from well established postal infrastructuresTotal postal revenue for the Euromed region is c. 38 times bigger than Southeast Asia’s

Euromed Southeast AsiaArea total postal revenues = $ 1 441mArea total postal revenues = $ 54 125m

GroupeLa Poste


PosteItaliane

Turkey Post

CTT Correios

Egypt Post

Elta

Algérie Poste(2)

Poste Maroc

La Poste(Tunisia) Cyprus Postal

Service

Malta Post Syrian Post

Jordan Post Company

Posta Slovenije

G.PT.C.

$ 750 m

Indonesia(2)Malaysia

Myanmar

Philippines

Singapore

Thailand(2)

Viet Nam(1)

Brunei Darussalam(2)

Cambodia

Declared Investment intention in the area (3)

$ 750 m

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The heterogeneity of the Postal Euromed

Global Overview of Postal Euromed Operators

Source: UPU, CVA AnalysisNote: (1) Excluding Israel, Lebanon and Libya due to the lack of available data

(2) Excluding Jordan and Spain due to the lack of available data

2007A figures % Euromed 2007A figures % Euromed

Operating revenues ($m) 51 916 95% 2 622 5%Number of employees 514 597 79% 138 126 21%Operating revenue per employee ($) 100 887 18 982# inhabitants/ permanent office 5 341 17 771# postal items per capita 171 18

Total Volume (items,m) 45 918 99% 372 1%Total international volume (items,m) 1 627 96% 65 4%

North Side South Side

1

2

3

(1)

(1)

(2)

2007Operating revenue

South side

France + Italy + Spain91%

North side95%

5%

2007Total international

volumeSouth

side

2007Total volume

South side

North side99%

2007Number of employees

South side

France + Italy + Spain74%

North side79%

21%

North side96%

100887 103525

18982

2007Operating revenue/

employee

1 2 3

France + Italy+ Spain

81%

France + Italy+ Spain

87%

South side

France + Italy

+ Spain

North side

4%1%

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Euromed- North side

Euromed - South side

The heterogeneity of The Postal Euromed

Legal structure strongly impacts activity, demands on financial results and efforts to modernise

Slovenia

Turkey

Tunisia

Syria

Spain

Portugal

Palestine

Morocco

Malta

Libya

Lebanon

Privatization undergoingJordan

Italy

Israel

Greece

France

Egypt

Cyprus

Algeria

PRIVATE COMPANYSTATE-OWNED COMPANY

STATE ADMIN.

Overview of legal structures in the Euromed cross-section

Source: UPU, Posts

Focus on Euromed operators

# number of operators by type within the Euromed scope

1

6

1

45

1

StateAdministration

State ow nedcompany

Privatecompany

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Source: UPU, CVA AnalysisNote: (1) 2005A-2006A figures; (2) 2006A-2007A figuresDue to the lack of available data Israel Post, Liban Post, Syrian Post, Palestinian Postal services and G.P.T.C are not represented

The heterogeneity of the Postal Euromed

Focus on financial statement

The average operating revenue is rather high thanks to the impressive results of the French and Italian PostsThe average profitability is high and increasing on the 2005A-2007A period thanks to the general upgrading profitability trend on the Euromed Postal marketThe gap between operators in terms of operating revenue is due to big differences in the registered volumes treated for all kinds of product: may it be mail, parcels or financial services

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2 400 2 600 2 800 3 000

Operating revenues ($, m)

Operating margin 2007A (%)

-80%

-100%37 50030 00022 500

Algérie Poste(1)

Turkey Post

Egypt Post

CTT Correios

Elta


PosteMaroc

La Poste(Tunisia)

Euromed Average

Jordan Post Company(2)

Syrian Post(1)


Poste Italiane

Groupe La Poste

900750600450300150

Malta Post

Operating Revenue 2005AOperating Revenue 2007A

15 00010 5003 0002 7002 4002 100

PosteSlovenije

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The heterogeneity of the Postal Euromed (cont’d)

Source: UPU, CVA AnalysisNote: (1) 2005A-2006A figures; (2) 2006A-2007A figuresDue to the lack of available data Israel Post, Liban Post, Syrian Post and G.P.T.C are not represented.

Focus on financial statement (cont’d)

The average growth of the Postal Euromed is rather high portraying the global dynamism of the region at large

Cyprus, Malta and Spain, despite an increasing operating profit on the period have decreasing profitability

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2 400 2 600 2 800 3 000

Operating revenues ($, m)

Operating margin 2007A (%)

-80%

-100%

Algérie Poste(1)

Turkey Post

Egypt Post

CTT Correios

Elta


PosteMaroc

La Poste(Tunisia)

EuromedAverage

Jordan Post Company(2)

Syrian Post(1)


Poste Italiane

Groupe La Poste

Malta Post

24%

73%

16%

8%13%

11%

9%

12%

14%

-13%

-4%

10%

17%

10%12%

CAGR 05-07 Operating Revenuexx%

Operating Revenue 2005AOperating Revenue 2007A

37 50030 00022 500900750600450300150 15 00010 5003 0002 7002 4002 100

PosteSlovenije

10%

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Focus on the correlation between postal operating revenue and international volume to GDP



Operating revenues in the postal sector are closely correlated to GDPThis correlation should be lower in the future due to structural decrease for mail volumes because of mail items sensitiveness to substitution

1

10

100

1 000

10 100 1 000 10 000 100 000 1 000 000 10 000 000

Operating Revenue – GDP CorrelationInternational Volume – GDP Correlation

1

10

100

1 000

10 000

100 000

1 000 10 000 100 000 1 000 000 10 000 000

R2 = 0,727

Operating Revenue ($m)

GDP ($bn)

R2 = 0,7894

International Volume (m)

GDP ($bn)

1 Egypt Post, 2 Algerie Post, 3 Elta, 4 Israel Post, 5 Poste italiane, 6 Jordan Post Company, 7 Liban Post, 8 G.P.T.C, 9 Malta Post, 10 Poste Maroc, 11 CTT Correios, 12 Correos y Telegrafos, 13 Syrian Post, 14 La Poste (Tunisia), 15 Turkey Post, 16 Posta Slovenije, 17 Groupe La Poste

13

4

5

67

89

1011 1213

14

15

16

1

2 3

5

6

910

11 12

1314

1516

17

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0 10000 20000 30000

France

Italy

Spain

Turkey

Portugal

Egypt

Greece

Algeria

Slovenia

Morocco

Tunisia

Cyprus

Malta

Syria

Jordan

Source: UPU, CVA AnalysisNote: (1) 2006A figures; (2) 2005A figuresDue to the lack of available data Egypt Post, Israel Post, Liban Post, Syrian Post, Palestinian postal services and G.P.T.C are not represented.


Focus on product offering

Letter post items still represent the major part of NPO’s results for many posts. This is less true for Algeria, Agypt, Syria, Tunisia and TurkeyFinancial services are also an important part of results thanks to high access to banking services in developed economies and efforts made by postal operators to drag remittance flows from migrants by offering special services in developing countries

Mail

Parcel and Logistics

Financial services

Others

Operating revenues ($,m)

% of 2007AOperating revenues

(1)

(1)

(2)(2)

0 20 40 60 80 100

AlgeriaCyprus

EgyptFranceGreece

IsraelItaly

JordanMalta

MoroccoPortugal

SpainSyria

TunisiaSlovenia

TurkeyEuromed Average

(1)

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Source: UPU, WEO (04/09), CVA AnalysisNote: (1) 2006 figures; (2) 2007 figureslevel of economic openness = (import. + export.)/2*GDP

The heterogeneity of the Postal Euromed (cont’d)Focus on international exposure

International traffic still represents a very small part of Postal Euromed operators' activityCountries of the Southern side of the Mediterranean sea are more exposed to international traffic than countries on the NorthernsideThere is no obvious correlation between international exposure and countries’ level of economic openness

0

2000

4000

6000

8000

10000

0% 20% 40% 60% 80% 100%

level of economic openness (%)

Total volume (items, million)

12 000

14 000

Turkey Post

Malta Post

Etla

G.P.T.CLiban Post

La Poste (Tunisia)Israël Post

CTT Correios

PosteMaroc(2)Egypt Post

Syrian Post(1)AlgeriePoste(1)

Posta Slovenije

France

2007A International volume(% of 2007A total volume)

Jordan Post Company

Posta Slovenije

CTT Correios

Poste Italiane

Israel Post

Turkey postElta

La Poste (Tunisia)

Malta Post

G.P.T.C

Algérie PostCyprus Postal service

Liban Post

Egypt Post

Correos y TelegrafosSyrian Post

Average Euromed

Poste Maroc

La Poste

74%46%

43%36%

25%26%

22%22%

11%9%

6%4%4%4%

3%2%2%1%

19%

Jordan Post company

% International

1,3 Operating revenue ($, m)

Correos Y Telegrafos

Poste Italiane

La Poste

13 455

5 557

21 210

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Source: UPU, CVA AnalysisNote: (1) 2006A figures; (2) 2005A figuresFor no available data Egypt Post, Israel Post, Liban Post, Syrian Post,Palestinian postal services and G.P.T.C are not represented.

As for international traffic, mail items are still much more important than parcel itemsInternational parcel traffic suffers from international integrators competition especially on the southern side of the Mediterranean mainly due to low QS standards from domestic operators

0 500 1000 1500 2000 0 2 4 6 8 10

Mail Parcel

Volume (items, m) Volume (items, m)

AlgeriaCyprus

EgyptFranceGreece

IsraelItaly

JordanLebanon

LibyaMalta

MoroccoPalestinePortugalSlovenia

SpainSyria

TunisiaTurkey

7000

AlgeriaCyprus

EgyptFranceGreece

IsraelItaly

JordanLebanon

LibyaMalta

MoroccoPalestinePortugalSlovenia

SpainSyria

TunisiaTurkey

22

International mailDomestic mail

International parcelDomestic parcel

(2) (2)

(1) (1)


Focus on international exposure: International / Domestic segmentation by product

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Source: UPU, CVA AnalysisNote: (1) 2006A figures; (2) 2005A figuresDue to the lack of available data: Egypt Post, Israel Post, Liban Post, Syrian Post, Palestinian postal services and G.P.T.C are not represented

The heterogeneity of the Postal Euromed (cont’d)Focus on International exposure: Inbound /Outbound segmentation by product

Outbound flows are globally higher than inbound flows in the north side of the Mediterranean sea

0 500 000 1 000 000 1 500 000 2 000 000 0 100 000000

200 000000

300 000000

400 000000

Mail (year 2007A) Parcel (year 2007A)

Volume (items, m) Volume (items, m)

OutboundInbound

AlgeriaCyprus

EgyptFranceGreece

IsraelItaly

JordanLebanon

LibyaMalta

MoroccoPortugalSlovenia

Spain

SyriaTunisiaTurkey

(1)

(2)

nana

0,4

AlgeriaCyprus

EgyptFranceGreece

IsraelItaly

JordanLebanon

LibyaMalta

MoroccoPortugalSlovenia

Spain

SyriaTunisiaTurkey

(1)

(2)

0,4

0,7 1,1

0,6 1,3

1,00,5

0,8 0,6

1,1 1,0

0,5 0,9

0,6 0,5

0,4 0,30,1 0,8

0,3 0,3

0,4 1,1

0,7 0,3

1,1 0,5

0,9 0,1

0,8 0,1

0,7 0,2

0,1

Outbound/inboundratio

0,4

OutboundInbound

Outbound/inboundratio

0,4

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Integrators’ market share is higher when NPOs don’t offer international products at level with integrators On the South side of the Mediterranean sea, they almost have 100% market share on international Express traffic and it will probably be hard for NPO’s to regain market share

Source: CVA EstimatesNote (1) traffic issued from the country for export

Global integrators increasing market share is the main regional challenge

100%60%

International(1)

Integrator penetration (as of % of market share)

Slovénie

Malta

Turquie

Greece

PortugalEspagne

LebanonnTunisie

Algérie

Italy

Cyprus

Spain

Slovenia

Algeria

Tunisia

Turkey

Lybia Égypte

SyriaIsrael

France

Morocco

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Source: UN Comtrade Database, CVA Analysis and estimatesNote : (1) International flows

Operating revenue breakdown: focus on intra-zonal flows

International products represent c. 18% of total Postal Euromed operating revenuesInternational intra-zonal product represent c. 29% of Euromed total international activities and c. 5% of total Postal Euromed operating revenues

Part of Intra-Euromed (1) traffic by country 2007A (% of operating revenue for international traffic)

Total operating revenue 54,2 $bn

International operating revenue

International Euromed operating revenue

9,6$bn

2,8 $bn

100%

Domestic 82%

18%

71%

29%International

Otherinternationalflows

International Intra-Euromed flows

100%

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Source: UN Comtrade Database, CVA Analysis and estimateNote : (1) International flows

Overview of intra-zonal(1) postal flows within the Euromed region

• The Postal Euromed Community is only meaningful because of the importance of intra-zonal postal flows in the region

• Intra-zonal flows represent an average 29% of postal Euromed international traffic in term of operating revenue

• International flows should be considered as a main growth driver for different reasons:

• Domestic markets : declining everywhere in the countries situated on the North side of the Mediterranean rim and underdeveloped in the countries of the South side of the Euromed region

• Globalisation, etc.

Part of Intra-Euromed(1) traffic by country (% of operating revenue for international traffic)

29%

2 0 0 7 A

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

Algeria

Cyprus

Egypt

France

Greece

Israe

l

Italy

Jorda

nLe

bano

n

Libya

Malta

Morocc

oPort

ugal

Slovenia

Spain

Syria

Tunisia

Turkey

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Intra-zonal(1) mail flows within the Euromed region

Source: Institut du Transport Aérien, CVA AnalysisNote: (1) International flows

Air mail flows are very representative of Postal Euromed international mail flows since air is the privileged means of transportation used for international mail traffic

Mail flows are structuring the Euromed regionIn terms of volume, mail flows are highly concentrated on the North side of the Mediterranean rim, intra North flows representing c.50% of the total of mail flowsIt is important to highlight the importance of North/ South flows which are almost equally balanced between the 2 sides of the Mediterranean rim Once more the weakness of South / South flows (c.4% of the total mail flows) appear as a characteristic of the Euromed region

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50% North > North

19%

North > South

27%South >North

South > South

43% North > North

24%North > South

26%South >North

South > South

Regional analysis

The majority of mail flows circulate from countries of the North side of the Mediterranean rim to countries of the same areaFlows from Southern countries of the Euromed region to other countries of the South side of the area are very weak

0%

20%

40%

60%

80%

100%

Alge

ria

Cyp

rus

Egyp

t

Fran

ce

Gre

ece

Isra

el

Italy

Jord

an

Leba

non

Liby

a

Mal

ta

Mor

occo

Portu

gal

Slov

enia

Spai

n

Syria

Tuni

sia

Turk

ey


Outbound Flow

Inbound Flow

Euromed North Side

Euromed South Side

0%

20%

40%

60%

80%

100%

Alge

ria

Cyp

rus

Egyp

t

Fran

ce

Gre

ece

Isra

el

Italy

Jord

an

Leba

non

Liby

a

Mal

ta

Mor

occo

Portu

gal

Slov

enia

Spai

n

Syria

Tuni

sia

Turk

ey

4%

4%

Intra-zonal(1) mail flows within the Euromed region

Source: ITA, CVA AnalysisNote: (1) International flows

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Intra-zonal(1) cargo flows within the Euromed region

Air cargo flows mainly concern the North of the Euromed region


As for freight traffic, the vast majority of flows are operated within the North side of the Mediterranean seaThis Northern traffic represents an impressive 80% of the flows

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80%

North > North

12%North > South

South >North South > South

80%North > North

20%North > South

South >North South > South

Intra-zonal(1) cargo flows within the Euromed region

Regional analysis


The majority of cargo flows circulating from countries of the North Side of the Mediterranean rim to countries of the same areaFlows from Southern countries of the Euromed region to other countries of the South side of the area are very weak

0%

20%

40%

60%

80%

100%

Alge

ria

Cyp

rus

Egyp

t

Fran

ce

Gre

ece

Isra

el

Italy

Jord

an

Leba

non

Liby

a

Mal

ta

Mor

occo

Portu

gal

Slov

enia

Spai

n

Syria

Tuni

sia

Turk

ey


Outbound Flow

Inbound Flow

Euromed North Side

Euromed South Side

0%

20%

40%

60%

80%

100%

Alge

ria

Cyp

rus

Egyp

t

Fran

ce

Gre

ece

Isra

el

Italy

Jord

an

Leba

non

Liby

a

Mal

ta

Mor

occo

Portu

gal

Slov

enia

Spai

n

Syria

Tuni

sia

Turk

ey

4%3%

5%3%

n.a

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Table of content

• The Postal Euromed in 2015• Proposal for further integration

Introduction to the Postal Euromed Project




Appendix

The Postal Euromed is meant to grow as economies of the South side of the Mediterranean rim develop. The potential of the regionis huge and the question of cooperation and integration appears to be the best win-win strategy for all countries of the Euromed area

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Projective overview of the Postal Euromed in 2015

Focus on intra-Euromed flows – Operating revenue analysis

Source: UPU, IMF WEO (04/09), CVA Analysis and estimation on the basis on IMF external trade and GDP growth forecasts

An 11 % annual growth for the Euromed region is forecast as for intra-zonal flows to 2015EThe South side of the Euromed is clearly catching up with countries of the North side of the Mediterranean sea and sustains the

Postal Euromed growth

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

2007A 2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E

CAGR 2011E- 2015E = 14%

1/ 10 000

60 / 100 000

30 / 100 000

80 / 100 000

40 / 100 000

CAGR 2007A-2011E = 6%

Operating revenue ($m)

CAGR 2011E- 2015E = 25%

CAGR 2007A-2011E =18%

Operating revenue as of 0/ 00 000 of Postal Euromed GDP

Euromed Region

North Side of Euromed area

South Side of Euromed area

CAGR 2007A-2011E = 7%

CAGR 2007A-2011E = 15%1

1

0/ 00 000 of Postal Euromed GDP

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Source: UN Comtrade Database, CVA Analysis and estimation on the basis on IMF external trade and GDP growth forecasts


Focus on intra-zonal flows – Operating revenue analysis

Part of Intra-zonal traffic by country (% of operating revenue for international traffic)

2007 - Total operating revenue 54,2 $bn

2015 - Total operating revenue 57,4 $bn


InternationalEuromed operating

revenue

9, 6 $bn

2, 8 $bn


International Euromed operating

revenue

18,8 $bn

6, 6 $bn

International flows are becoming one of the most important key drivers of the postal economy in the Euromed regionIn 2015A, international products could represent c. 33% of the total Postal Euromed’s operating revenuesInternational intra-zonal products represent c. 35% of the total of Euromed’s international activities and c. 11% of total Postal Euromed operating revenuesAs another evidence of regionalisation, intra-Euromed flows will grow faster than international traffic itself

100%

Domestic 82%

18%

71%

29%International

Otherinternational flows

International intra-Euromed flows

100% 100%

Domestic 67%

33%

65%

35%International

Otherinternational flows

International intra- Euromed flows

100%

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Source : ITA, CVA Analysis and estimation on the basis on IMF external trade and GDP growth forecasts

Focus on cargo flows

50% North > North

19%

North > South

South >North

South > South

43% North > North

24%

North > South

South >North

South > South

North > North27%

North > South10%

South >North

South > South

North > North23%

North > South13%

South >North

South > South

As for the parcel market, countries of the Southern side of the Mediterranean sea will represent the major part of intra-zonalcargo flows in 2015

Outbound Flow

Inbound Flow

Outbound Flow

Inbound Flow

Intra-zonal cargo flows year 2007A Intra-zonal cargo flows year 2015A

4%

26%

27%

4%

9%

54%

7%

58%

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Source: UN Comtrade Database, CVA Analysis and estimation on the basis on IMF external trade and GDP growth forecasts

Projective overview of the Postal Euromed in 2015 (cont’d)

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

Algeria

Cyprus

Egypt

France

Greece

Israe

l

Italy

Jorda

nLe

bano

n

Libya

Malta

Morocc

oPort

ugal

Slovenia

Spain

Syria

Tunisia

Turkey

• Regionalisation is meant to strengthen the importance of the intra-zonal traffic especially in countries of the Southern Mediterranean rim (Turkey being a case apart in light of its for its special relation to Germany)

• In 2015E intra-zonal flows could represent in terms of perating revenues an average 35% of postal Euromed international traffic

Part of Intra-zonal traffic by country (% of operating revenue for international traffic)

2007A

2015A

29%

35%

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Postal cooperation: a win-win gamePostal operation could be structured around 4 main projects

Migrants money represent an impressive $300bn flowsPostal operators’ market share is important due partnerships with Money transfer Companies such as Western union This represents real business opportunity for local posts as flows between the 2 sides of the Mediterranean rim riseThe Postal Euromed offers the opportunity to considerably enrich their current service offering, which would enable them to gain a real hedge in an already competitive business

Cooperation on QS issues

COOPERATION ON QUALITY OF SERVICE (QS)

COOPERATION ON CUSTOMS ISSUES

POSTAL FINANCIAL SERVICES: MIGRANTS MONEY ALLOCATION

As any other carriers, postal operators are subject to customs’control for both outbound and inbound flows

National postal operators used to have privileges regarding customs’obligations but more recently the willingness to strengthen security practices has led to the progressive disappearance of the postal exception

Two main challenges: customs clearance and the electronic declaration

Postal cooperation on customs’issues represents a real opportunity for the Postal Euromed community

Postal operators from the Euromed region are facing the necessity to identify further growth revenues to generate new revenue streams to compensate for shrinking margins due to increasing competition and/or structural mail volume decrease

DIGITAL HIGHWAYS

Developing a common product to develop a competitive productEuromed Postal branded able to find a positioning on the Exprès market :

– Delay guarantee– High QS standard– Track & Trace system– Etc.

Example : PRIME

Hybrid mail : mailing being digitalized and later physically produced and then directly injected in the postal operators delivery network + value added services

DM Hybrid mail: digital mailing, later physically produced then directly injected in the postal operators delivery network + value added services

All these issues are closely linked together: changes in the customs legislation countries are not ready to face might negatively impact QS while digital requirement of new customs rules hence QS standard will only be met through the development of digital highways

EUROMED POSTAL SCOPE OF COOPERATION

QS

Customs

D.H.ways

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To complement quality of service initiatives taken by national Posts, the UPU's International Bureau undertakes worldwide quality tests each year and publishes end-to-end delivery standards against which Posts can measure their progress


Postal cooperation: a win-win game - Improving QS

The main advantage for Postal Euromed countries to participate in these UPU tests is for them to implement standard and regular QS measurement processesThe UPU Quality of Service fund could thus be viewed as an opportunity for Euromed countries to work hand in hand on QS issues by pooling QSF resources together to finance Euromed projects

UPU QUALITY OF SERVICE FUND (QSF)QSF was set up in 2001 Objective: Finance projects for improving the quality of service of Posts in developing countries The QSF is financed by a supplement to terminal dues paid by industrialized countriesCountries can donate their QSF resources to countries in greater need : The People's Republic of China and the Republic of Korea have given a total of 150,000 USD for emergency projects to help countries affected by the 2004 tsunami A few figures:

– c. 300 projects since April 2001– Funding for these projects amounted to $39.6m. c. 50

million USD is still available for new projects– The QSF also promotes a regional approach :13 regional

projects have already been financedThe QSF has around the world certainly contributed to arise the level of QS. It has also helped to strengthen solidarity between countries

UPU MEASUREMENT SYSTEM

UPU MEASUREMENT TESTSContinuous testing of transmission times for international priority letter-post items on over 900 international linksObjective: provide postal administrations with a simple, effective tool for measuring international quality of service.The main characteristics of the testing:

– "end-to-end" tests– The testing is continuous – Geographical distribution of test participants has been

simplified– Neutral and independent body (Universal Postal Union's

International Bureau), combining and checking results and produces the results

– Detailed results are processed confidentiallyThe UPU assists Posts in implementing quality of service improvements by sending consultants to selected countries to ensure that internationally accepted procedures are followed and to make recommendations Global Monitoring System (GMS) project (available 2013-14?): flexible & low cost QS measurement system. Countries of the Gulf have been selected to pilot the first GMS tests

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Remuneration for the Exchange of International Mail Services (REIMS) as an example of cooperation on QS issues

Source: Interviews IPC& IPC members, CVA Analysis, UNEXNote (1) see HQ to HQ measurement tests

REIMS Agreement members : for these countries almost twice as much mail was delivered in two days compared to 1994

Independent measurement tool:

– Countries of the North Side of the Mediterranean sea are members of the REIMS Agreement

– The UNEX measurement system is not adapted to all countries of the Postal Euromed since it is expensive and requires high standards of QS with adequate monitoring equipment

– A solution could be envisaged through a UPU project that would establish a global measurement tool

– The UPU fund for QS (QFS) designed to fund QS improvement projects in developing countries could also serve this purpose

Establishment of QS standard general objectives

Publication of QS test results

Knowledge sharing on QS issues

HQ-to-HQ measurement tests at lower cost (1)

FEASIBILITY OF APPLYING SYSTEM TO THE POSTAL EUROMED

43,5%

98,0%96,2%

7,7%

84,3%

92,4%

69,1%

99,5%99,3%98,9%

15,8%

97,9%94,9%

82,3%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

J+1 J+2 J+3 J+4 J+5 J+6 J+7

86%

93%94% 93%

94% 94% 95%

1998A 2000A 2004A 2005A 2006A 2007A 2008A

J+3 Performance

1994 UNEX-18

2007 UNEX-18Comparison of aggregated 1994 and 2007 results for the groupof 18 countries that have been monitored by UNEX since 1994


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In early 2008, PostEurop expressed a need for an international, flexible, simple, diagnostic and the operational QS measurement at the lowest possible cost. On this basis, IPC developed IPC HQ to HQ RFID measurement system

Source: IPC, CVA Analysis

The interest for certain Postal Euromed members to participate in IPC HQ to HQ RFID tests is establish regular measurement links based on a proven system between Postal Euromed countries which are not already covered either by UNEX or by the UPU continuous test measurementsThis low cost test is an opportunity to have an independent party measuring and publicizing QS, setting precedent to working group on the issue

BACKGROUND AND OBJECTIVESInternal flexible system which combines the existing IPC UNEX, RFID software and capabilities but using postal staff in postal headquarters to act as sender and receiver panelists (internal panelists versus external panelists)The pilot was launched on September 8th, 2008 between 16 PostEurop members headquartersThe HQ to HQ RFID measurement is a system which is based on the following 5 basic elements:

– Internal measurement between postal operators (headquarters to headquarters)

– IPC manages and runs the system– The test items are produced by the sender panelists– Use of internal systems: IPC has developed the software to

run internally a complete simple measurement system– The administration is kept to the minimum possible as well

as the costs

DETAILED DESIGN & METHODOLOGY1 test letter posted per day per link (approx. 250 test items per link per year)All test items include a transponderThe measurement source can also come from private addresses in any city decided by the postAs a principle a link is always reciprocal (measurement of the link A to B and of the link B to A) External publication of the HQ results outside the concerned participants is strictly prohibited.

COSTSThe HQ to HQ system has been fixed at zero cost for the participants in the first yearThe estimated cost for the work done by IPC is approximately 1€ per test item. IPC supplies transponders but countries must be equiped with a gate diagnostic equipment (~6500€). Today over 60 countries are equipedTo limit the costs, the administration of the HQ-HQ measurement is limited to the minimum.

HQ-to-HQ RFID MEASUREMENT SYSTEM


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PRIME is a postal program for postal operators to work together to develop value-added products

– To improve & expedite customer service– To grow our revenues & to protect existing Express, Registered &

Insured Revenues– Optimising use of Posts‘ Universal Letter Network– Working together with PostEurop, IPC & UPU, successfully– 7 countries were initially part of PRIME, today 53 countries (15 EU

members) have joined the organization

Post Exprès is an example of a PRIME product– Posts market the service under Local names e.g. in Ireland it is

called Expresspost, In the United Kingdom it is known as Airsure, In Portugal it is named Correio Azul Prime

– However, the patented Post Exprès logo is used by all Posts: as part of Market development & Customer & staff awareness strategy in a growing international Internet fulfillment market

Value added Priority Letter Services (Express, Registers & Insured) -positioned within Post’s portfolio of services between normal priority/airmail letter and EMS :

– Value Added– Specified delivery standard -reliable delivery service– Electronic confirmation of arrival in destination OE– Electronic Confirmation of delivery– Agreed customer service response times included in an expedited

web based customer service enquiry system for Express, Registers & Insured items

The key of the Prime system is providing electronic Delivery Confirmation for certain Priority Letters up to 2 kg A Pay for Performance system works – rewards excellent delivery & scanning & quick return of the information Performance is monitored and REPORT CARDS issued together with a ready reckoner to make it easy for posts to invoice each other

South Euromed Postal operators are not all equipped with scanning technology

The idea is to brand a common product under Postal Euromed control and to work on improving QS on this very specific product

This product could be discussed and developed under a working group authority. It would focus on the introduction of scanning devices and technologies to monitor QS

Financial incitation could be introduced as countries develop accurate Track & Tracing technologies

EU Euromed Posts already members – all welcome to become members – Totally free to posts in Group 4 & 5 UPU classification system. Groups 2 & 3 free for 2 years from 2010


PRIME, as an example of cooperation on QS issues

Source: PRIME, Interview, CVA Analysis

Postal cooperation: a win-win game

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E Parcel Group : a good example of a partnership between postal operators gathering locally marketed products

Source: EPG, Interview, CVA Analysis

EPG TRAIL BREAKEREstablished in 1996 with 9 operatorsContinuous expansion & improvements since inception23 members in 2009 (22 posts & 1 delivery agent)14 million parcels in 2008

EPG OFFERINGQS Assured Service standards: 1 to 2 days delivery after arrival in inbound OEDeductible Customs Clearance timePersonalised branding and sales for member posts Monthly Payment & Performance Reports, central IT Help desk, Customer Service System over the internetEPG Membership and IPC Guidance and Support

EPG STATUSA delivery agreement, no obligation to export Day certain delivery parcel with signature (POD)Competitive Delivery rates and StandardsPayment for items scanned at inbound Office of Exchange

No inbound scan no paymentAgreed liability and compensation system for loss or damage

Maximum 450 SDR per parcel (637 Euro)Penalty System for:

– for late delivery and late data transmission - 25%, – missing delivery information - 100%– 12 months period without penalties for new Partners

Central Customer Service system links national CS centers– Standard workflow for enquiries – Attendance hours for Customers for each partner 9-17 (CET)

In 2002, in the wake of the EPG initiative, six postal operators of South East Asia and the US established the Kahala Post Group (KPG) to develop a service insipered from EPG features to respond to the strong competition in their region, regain market share from competition and build an additional revenue stream:

– Reciprocity agreement– High financial penalties

In 2009, 10 members have joined, amongst which European Postal operators (FR, UK, ES).

Alike Prime, EPG could be a base case of successful postal cooperation around QS issues on the parcel’s segment.

The introduction of a penalty based system boosted QS results dramatically : in the case of EPG, time delivery results (J+1 and J+2) are stable around 90% on average throughout the entire network.


Postal cooperation: a win-win game

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Customs issues: In the short term (4 years), postal operators will be considered just like any other carrier regarding customs rules


CUSTOM CLEARANCE POLICY– Taxes & fees calculation by postal operators – Digital customs clearance

POSTAL RESPONSABILITY– Postal operators are clients’ legal representative

regarding custom authorities– In case of incomplete information, postal operators are

granted the right to open items to estimate of good, taxes and fees to be paid

Multiplication of declared itemsNew sorting process requiredNew information system required New accounting system requiredReorganisation of international sorting centersNew RH policies required New product marketing and economic analysis requiredRequirement vis à vis customersIncrease of costs and processesDigital CN 22/23

SECURITY PRE-WARNING (Pre-alert)For every product in Europe, China and in the United States

Digital CN 22/23 New information system required New inner process required Cooperation with other postal partners required Requirement vis à vis customersIncrease of costs and processes

2 MAJOR CHANGES IN PERCEPECTIVE ECONOMIC AND SOCIAL IMPLICATIONS

3 levels of norm co exist at customs’ levelInternational rules from the UPU and WCO (World Customs Organization) Supra national laws (EU)National Legislations for taxation rules and Customs’ relations between Posts

Euro

pean

Uni

on d

irect

ive

Dom

estic

rule

s

Impact of these changes on postal operators in terms of level of constraints & responsibilityPostal operators are not ready today to face such changes: they do not have the technology readily available, trained staff to meet these new customs legislations

Postal cooperation: a win-win game – Customs’ issues

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Customs’ issues: Cooperation is the key to quick and cheap adaptation to the new legal environment


Cooperation should be considered to save development and implementation costs : e.g. Euromed training sessions, cooperation on standard issues, communication to customers, R&D costs sharing, etc..

Cooperation is also to be considered as an operational level: Multilateral typing farms to tackle digital CN 22/23 issues (with or without OCR system on technological development, Multilateral custom clearance platform to take the most of fiscal integration and cooperation, multilateral mail and parcel service centers (handles items that cannot be processed and delivered due to the lack of information) for more efficiency, etc.

Cooperation could finally be considered to develop efficient regional custom clearance offer to clients

• Develop NPO international activities

• Stay amongst the most attractive providers for corporate while respecting restrictive legislation

• Develop a personalised customs clearance offer to corporate

• Keep up improving Quality of Service standards despite substantial increase of potentially checked items

• Keep on being a universal service provider for individuals and small companies at low price

• Appear as a modern and trustable actor in the eyes of custom authorities, clients an other actors in the sector

ISSUES AT STAKE FOR POSTAL OPERATORS

AXIS OF COOPERATION

Postal cooperation: a win-win game – Customs’ issues

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Global migrants’ remittances amount c. $300bn for the year 2008. Remittances from French, Italian and Spanishmigrants to Maghreb countries represent c. €10bn for the same periodMigrant remittances cannot be considered as mere savings since it is a form of aid for families for basic products and other emergency expenses

Source: African Development Bank, CVA Analysis, Interviews

Postal operators seems to be natural players on the migrant’s money order transfer market thanks to their comprehensive post office networkPostal operators have been at a loss to develop a competitive product to run against Western Union‘s service offeringThe partnership between Western Union and postal operators makes it difficult for postal operators to sell their other productCompetitive solutions using new technologies exist like cards, Mobile Phones (see the Vodafone example in Kenya) and Electronic Payment Terminals. Postal operators could work hand in hand with such providers to develop a new generation of products which enable them to regain lost market shareThe opportunity for postal operators lays in the offering of comprehensive financial products: insurance, savings, micro-financeOnly a corporate organisation would be able to take market share over the leading Western Union (e.g Eurogiro in the BtoC, BtoB segments, Swift in the banking sector…)

MONEY TRANSFER COMPANIES (MTC)

Very high QS : extremely fast (10min) and safeVery large territory coverageCash-to-CashContributes to the reduction of the informal sector through its adapted offerMonopoly hence high commission fees (20%)Historical domination of Western Union (65% to 100% market share depending on the corridors) because of strong partnerships e.g. with the Banque Postalein FranceEuropean directive (implemented Nov. 2009 in France) to reduce capital required and soften legislation to ease competition on the MTC market and pull prices down

BANKING INSTITUTIONS (banks and micro finance institutions)

Function of countries use of banking services rate

Cash to account, account to account

Relatively low QS : high prices (lower than MTC’s though) and relatively slow (2 days)

Comprehensive offer: insurance, real estate, etc.

Innovation : e.g. Jan. 2007 : partnership Attijariwafa - Santander network alliance, 0% commission, package of services

MFI operates as intermediaries of MTC in areas where populations scarcely access/use baking services

POSTAL PRODUCTS

CtoC products

– 8-15% market share

– Very slow still cheap (5days)

– The traditional paper money order transfer (MOT) is declining (except for the elderly migrants segment). In some countries cash flow breaches in the past have discredited the product

– IFS (developed by UPU) a new electronic express MOT named IPS : cheap and fast (12h

BtoB, BtoC

– Eurogiro MOT

PLAYERS OF MIGRANTS’ REMITTANCE TRANSFERT MARKET

INFORMAL SECTOR

Difficult to estimate but could represent between 30% to 70% of market share

Cheaper than any other solutionLow security

“Holders”(c.70% of the informal sector), fax system (c.30%), etc.

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In the south side of the Euromed region, where relative low access to banking services rate prevails, the postal network is far bigger than the banking network

Source: UPU, BLE, Press, CVA AnalysisNote: Due to the lack of available data, Israel, Jordan, Libya, Syria

Postal integration: a win-win game - dragging migrant’s money

Thanks to their comprehensive network, postal operators appear to be natural player on the migrants’moneytransfer market

Italy

Postal vs. banking network

(years 2006-2007) (as of % of market share)

Malta

Greece

Portugal

Cyprus

Spain

Slovenia

Algeria

Tunisia

Turkey

Lybia

Egypt Israël

France

Morocco

10 301

28 000

742 489

16 405

54 908

3 6121 553

6 4322 833

10 962

4 2631 869

16 640

Jordan

25 619

6 000

Lebanon

18 388

6 6722 632

1 726

18 090

3 7331 698

3 5882 874

13 692

1 00833 326

Syria

7 98110 463

19 999

10 328

Postal outlet per capita

Banking outlet per capita

Banking/postal outlet per capita ratio

10,5ND

> 1

1 > 3

3 >

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80%

70%

60%

50%

40%

30%

20%

10%

0%-

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

EMEASA (51,8%)

APAC (8,2%)

Americas (40,0%)

3 5483 988

4 4704 900

5 282

2004A 2005A 2006A 2007A 2008A


Source: World bank, Western Union, CVA AnalysisNote (1) Workers' remittances, compensation of employees, and migrant transfers(2) Europe, Middle East, Africa & South Asia; (3) Asia Pacific; (4) rebased

Postal operators should learn how to make the most of the booming and profitable migrants’ remittance market

A BOOMING MARKET A PROFITABLE MARKET: THE WESTERN UNION CASE STUDY

Euromed remittance flows increase less than the global remittance trend, a proof that the South Euromed is catching up in terms of developmentWestern Unions, impressive financial results (26% operating margin in 2008) clearly show the underlying financial potential of migrants’ money transfer for postal operators

Global remittance flows(1)

Euromed’s remittance flows(1) (rebased)

Euromed’s remittance flows as a % of global flows

US$,million

CAGR 1970-2008 : 15%

CAGR 1970-2008 : 11%

REMITTANCE FLOWS EVOLUTION 1970-2008US$,million

Operating margin

CAGR 2004A-2008A : 10%

WESTERN UNION OPERATING REVENUES EVOLUTION 2004A-2008E

CONSUMER TO CONSUMER SEGMENT OPERATING REVENUE GEOGRAFICAL SPLIT

(2)

(3)

20%

22%

24%

26%

28%

30%

32%

34%

(4)

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Italie

Espagne

Maroc

France367 M€

1 507 M€

570 M€733 M€

USA244 M€

ROW652 M€

The migrants’ remittance market represents c. $4bn (year 2008)

Focus on Remittances to Morocco

A DEVELOPED AND COMPETITIVE MARKET

Overview of Morocco migrants’ remittance market

Money Transfer Companies hold c. 75% of the migrants’remittance market

Banking institutions play a key role ; 4 Moroccan banks share the migrants’ money market thanks to:

– their successful implementation strategy in issuer countries

– their comprehensive product offering packages (insurance real estate, money investment..)

The informal sector is rather weak mainly because of: – Good offer supplied by banking services– MTC comprehensive network– Beneficiaries will for secrecy

Use of banking services rate of

Moroccan population

4574MTC

Coverage

73

0

Formal transfer rate

47%WesternUnion

17%

Money Gram

10%Other MTC

26%Other

551

Investment

1 6801 842Morocco

Real EstateFamily BudgetVolume estimate (€m) Year 2008

Source: African Development Bank, CVA Analysis

Moroccan Case Study


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GENERALA comprehensive range of insurance product could be developed including special Euromed productEducative rent : for children until they finish studiesA special rent could be implemented for people studying in the North Side of the Mediterranean seaSpecial cultural packages: e.g Mecca Pilgrimage package with financing and insurance, etc

MIGRANT TARGETED SERVICESPostal operators could seize the opportunity to offer more than mere money transfer system so as to secure the loyalty of the existing money transfer basis of clients. Special product could hence be develop in addition to the one mentioned above, e.g:

– Repatriating insurance for migrants in case of serious injury or death

– Money transfer insurance: in case the migrant is not able to send money to his/her family, the insurance will sent the insured amount

e.g TEKEMEL : product developed by the French Banque Postale

OFFERING INSURANCE SERVICES - EXAMPLES

Source: African Development Bank, CVA Analysis

On the money transfer market, postal opportunities lay in the comprehensive development of banking service offer from postal operators to capture market shares

Postal integration: a win-win game – going further into financial cooperation: Euromed insurance & micro finance services

The goal is to develop micro-finance institutions within Postal organisations and posts outletsThe micro finance institution serving as a client capturer for Postal services while banking rate is slowly increasing in the countries A win-win partnership:For the Postal operator:

– Outlet leased to the micro finance institution– Commission taken on the micro finance institution activities– Micro-finance institution client could in the end be encouraged

to start using Postal operators financial services (insurance, etc)

For the micro finance institution:– Postal operators commitment to develop a marketing policy

directed to its own clients

MICRO FINANCE EXAMPLE OF COOPERATION

Local Postal Operator ShareholdingMicro

finance institution

Bill repayment

Marketing

Leased area

% fee

Outstanding bills

Euromed Cooperation on these financial issues could probably lead to greater client basis and pile pressure on prices to offer comprehensive but low cost services

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The increasing Internet penetration potential

Source: International Telecommunication Union, World Bank, Forester ResearchCVA Analysis

Postal integration: a win-win game – Digital Highways

E-commerce is probably one of the most interesting opportunities for parcel operators in the future

– High margin • Transportation and logistics is

estimated to be 10% of the item price

• International flows increase the operating margin and offer the opportunity to build a global network

• Consumers are ready to pay a security premium

– An opportunity to take a “revenge” on integrators by adopting a stronger positioning

• E-commerce high growth rate forecasts

• Postal operators’ great logistic expertise and network

– An opportunity to rebuild strong brand image

Some Postal operators like Deutsche Post, Poste Italiane have already seized the potential of e-commerce

E-COMMERCE: POTENTIAL FOR POSTAL OPERATORS

942

985

1086

10721052

1029

934

850

900

950

1000

1050

1100

2008 2009 2010 2011 2012 2013 2014

EUROPE AVERAGE E-SPENDING PER CAPITA (€)

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Source: CVA Analysis

Postal operators from the Euro-Mediterranean zone are facing the necessity to identify further growth opportunities and to generate, new revenues streams to compensate fro shrinking margins due to increasing competition and/or structural mail volume decrease

Postal integration: a win-win game – Digital Highways

OPERATIONAL COOPERATION

Example: Cooperation on both direct marketing and hybrid mailing through a “EUROMED MAIL FACTORY”

– Innovative, ready to use mail outsourcing solution

– Additional BtoB added value services to support SMEsand larger companies in the development of their direct marketing programs (mostly retail and consumer goods sector) and in the efficiency of their administrative processes (mail intensive companies)

SERVICE OFFERING

CORE OFFERINGDesign and generation of mailing campaign (for administrative or direct marketing purposes)

Mailing being digitalized and later physically produced and directly injected in postal operator delivery network

EXTENDED “END TO END” DIRECT MARKETING AND ADMINISTRATIVE OFFERINGS, THROUGH

PROVISION OF ADDITIONAL ADDED VALUE SERVICE

Upstream services– Upstream direct marketing consulting

services– Access to local/regional database– Other

Complementary mass producing services– Administrative mail : document management

(value archiving, etc..)– Direct marketing campaign– Customers’ response handling– Campaign efficiency assessment

Downstream services– Mail tracking and reporting

At shareholder level– A low capital intensive activity– An Estimated 8% (?) market growth

At local incumbent operator level– Creation/development and preemption of new

domestic market with new revenue generation– Development of incumbent operator customer’s

loyalty– Access to a sustainable innovation stream &

best in class practice– Shortened time to market & pooled costs

+

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Source: APPU, CVA Analysis

Applicable to every level of the value chainAcquisition costs : cheaper prices thanks to higher volumes, optimization of taxes, custom fees & payment conditionProcurement costs : lower number of suppliers and lower number of orders & bills to deal with reduction of transactional & follow up costsStandardisation & industrialisation of procurement processes enhancing overall QSChoice : access to a wider choice taking benefit of GlobalisationCompliance : less out-of framework contracts purchasesKnowledge : deep knowledge of suppliers & product leading to better compliance with need & qualityFocus : In house team focus in strategic tasks; less transactional or administrative tasks Guarantee : enforcement of guarantees due to mutual engagement from postal operators &suppliers and mutual risk sharingQuality : suppliers are more performance-oriented considering the postal pool’s power

PURCHASING ALLIANCE PROJECT

THE POSTAL EUROMED: SCOPE OF COOPERATION

KNOWLEDGE SHARING

Best practices

Opportunity to share studies

Platform for high level conferences

Training for middles & senior mamanagement

Success story : Asian Pacific Postal College (APPC) based in Bangkok

Knowledge sharing through the Asian-Pacific Postal College (APPC) which provides basic & advanced training programmes geared to meet the specific needs of the Posts in the region

The traditional point-to point logistic model is questioned today by increasing cost of fuel & raising environmental concerns

Consequently, a “Postal Euromed logistic’sHUB” could contribute in cost savings by providing high quality air transportation & transit services to local postal operators:

– Simplification: improvement of operating schedules & processes

– Visibility: better understanding of mail flows, better planning

– Guarantee: enforcement of guarantees due to mutual commitments

– Responsiveness: standardization of logistics processes enhances QS

– Knowledge leading to better compliance– Focus: in-house team focus on strategic

tasks– Environment: reduction in carbon

emission

Use of different transports modes could be considered if air route reveals prove to be inadequate

BUILDING an OPERATING STRUCTURE

Postal integration: a win-win gameAdditional avenues of postal cooperation which could be explored within the framework of a strengthened regional cooperation

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Introduction to the Postal Euromed Project


Overview of the Euromed Postal Market

Conclusion and introduction to phase 2 - 3

Appendix

Table of content

• Euromed Postal Questionnaire• Projection model methodology

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PTT

La Poste

Syrian Post

Posta Slovenije

Correos y Telégrafos

CTT Correios

Palestinian Postal Services

Poste Maroc

Malta Post

G.P.T.C

Liban Post

Jordan Post Company

Poste Italiane

Israel Post

ELTA

Groupe La Poste

Egypt Post

Cyprus Postal Service

Algérie Post

Operator Answer to the QuestionnaireCountry

Slovenia

No participationPalestine

Turkey

Spain

PendingSyria

¨PendingAlgeria

Cyprus

PendingEgypt

France

Greece

PendingIsrael

Italy

No participationJordan

Lebanon

No participationLibya

PendingMalta

No participationMorocco

Portugal

No participationTunisia

Postal Euromed Questionnaire

Upon completion of this study, 9 countries out of 19 have entirely or partially answered the Euromed Postal questionnaire

Therefore, other postal sources have been used such as UPU statistical data for instance

We would like to thank Liban Post, PosteSlovenije, Poste Italiane, PTT Turkey, The La Poste group, CTT Correios, Cyprus Postal Services, Elta, Correos y Telgrafos and other contributors to the study : UPU, IPC, IPEMED, ANIMA and the project coordination management at La Poste Group

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EVALUATION OF INTRA-ZONALOPERATING REVENUES

INTRA-ZONAL OPERATING REVENUE

2015 ESTIMATE

• + • International/domestic split : no

information on prices available• Split by product : no

information on cost structure available nor any information on international /domestic split

DIRECT METHODOperating revenue

international and product split analysis

INDIRECT METHODTriangle Estimation

through another Indicator GDP

• + • Country information• GDP• External trade (export an

import)• Total external trade with

Euromed partners

• Calculation

• Result : Total export (import) as of GDP %

• Total Euromed export (import) as of GDP %

Intra-zonal outbound / inboundOperating revenues

(all product)

Missing data estimated through gravity model

Previsional growth rate calculated

on prevision externall trade rate (IMF)

Synergies

• The gravity model of trade in international economics predicts bilateral trade flows based on the economic sizes of and distance between two units.

• Fij = G*Mi*Mj/Dij• Where F is the trade flow• M is the economic mass of each

country, D is a variable accounting for geographic distance, language, relationships,etc, G is a constant we define thanks to the variable we already have

1

2

3

1

2

3

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