Itella group presentation

Your first choice in postal,logistics and eCommerce

services

Itella in Brief

Itella General Presentation2

• Daily postal services• Financial administration

processes• Logistics solutions

Services Net sales

• EUR 1,947 million

Operations in 11 countries

Personnel

• Share of international net sales31%

• 27,500 professionals

Net sales by Business Group

Mail Communications

OpusCapita

Logistics

57%

13%

30%

2013


FinlandRussiaSwedenNorwayDenmarkEstoniaLatviaLithuaniaPolandGermanySlovakia

Operationsin 11 countries

2013

Three Business Groups


Itella Mail Communications• Letter, publication, and direct mail delivery solutions• Domestic and international parcel services• Posti shops, postal agency shops, pickup outlets, and SmartPOST automatic

parcel terminals• Comprehensive solutions for online commerce• Electronic postal services, Netposti• Online tools for marketing communication• Analysis, target group, and register corrections services

Itella Logistics• International & domestic Air, Sea and Road freight• International & domestic Road express• Warehousing and other contract logistics• Integrated supply chain information management

OpusCapita• Outbound services• E-invoice operator• Finance and accounting services• Outsourcing• OpusCapita cash flow automation• Electronic order-supply chain

2013

Almost a 400-year-old history


Governor-General Per Brahe establishes postal services in Finland

A central postal administration is established for the postal services of autonomous Finland

The Telegraph is merged with the Finnish Post to form Post and Telegraph

Posts and Telecommunications of Finland becomes a state-owned enterprise

Postal and telecom services are demerged into separate companies

Internationalization begins with acquisitions in the Nordic countries

The early morning newspaper delivery business acquired from Sanoma Osakeyhtiö

The parent company’s name is changed to Itella Corporation

The new Postal Act takes effect in June

2007

2003

2001

1998

1990

1927

1811

1638

2011

2013

A Remarkable Role in Society

• Solid background: owned by the stateof Finland

• Itella Posti Oy is the only company inFinland with a universal serviceobligation determined in the Postal Act

• Itella is the only publisher of stamps inFinland

• The Post Museum presents, studiesand records Finnish cultural heritageand the changing faces of Finnishsociety through the history of postalservices

Itella General Presentation6 2013

Along in the development of theindustry

Permanent membership in international• PostEurope• Universal Postal Union (UPU) and• International Post Corporation (IPC)

Membership in Finland in• the Finnish Service Sector Employers’

association PALTA (a member associationof the Confederation of Finnish IndustriesEK)

• the Finnish Federation forCommunications and Teleinformatics(FiCom), and

• Finnish Business & Society (FiBS)


Research and Development

Examples of development projectthemes are new payment solutions,automatic parcel terminals, Netposti, thetransport ordering system, and financialadministration service consepts.

Netposti• Letterbox in the Internet• A free service offered by Posti to all

Finns over 15 years


Itella’s Personnel December 31, 2012


Number of Personnel

27,500

Itella’s personnel by gender

Women 41%, Men 59%

Itella’s personnel by businessgroup

Itella Mail Communications 17 800Itella Logistics 7 400OpusCapita 2 200Others 400

2013

Personnel by CountryBreakdown of Employment Contracts

• Finland 21,820• Russia 3,700• Poland 560• Sweden 400• Estonia 390• Norway 250• Denmark 220• Latvia 220• Lithuania 120• Germany 100• Slovakia 20


%

0

20

40

60

80

100

7,674 part-time employees (28%)20,142 full-time employees (72%)3,048 fixed-term employees (11%)24,768 permanent employees (89%)

2013

Corporate Strategy


Itellan yleispresentaatio12

Inevitable decline in mail businesseCommerce explosion, while consumer decides

Russia as a growth marketAn era of slow growth in Europe

Satisfied customer

Succeeding withthe customer

Winningtogether

Takingresponsibility

Driving forimprovement and

innovation

Easy, fast, reliable and responsible.

High value solutions for customerMarket leader with profitable growth in Finland and in Russia

The engine of eCommerceStep ahead in postal industry transformation

Best workplace

Our mission is to provide smooth flow of tradeand ease of everyday life.

2013

Your first choice in postal, logisticsand eCommerce services.

VALUES

MEGATRENDS

STRATEGICGOALS

MISSION

CUSTOMERPROMISE

VISION 2020

Strategy

Recent financials


Financial targets

Operating profit to exceed 5%

Return on invested capital atleast 10%

Gearing not to exceed 35%

Annual net sales at least in par withmarket growth

14

Net sales in Russia to double by 2020


Key financial figuresJanuary-September

M€ 1-9/2013 1-9/2012

Net sales 1,448.0 1,404.1 Net sales declined in Mail Communications,but increased in Logistics’ road freight and inRussia.

EBITDA 79.7 94.8 Sales margin declined in MailCommunications and in Logistics.

Operating result(non-IFRS)*

24.1(1.7%)

40.4(2.9%)

Operating result decreased in MailCommunications and during Q1-Q2 inLogistics. Operating result improved inInformation.

Operating result -2.4(-0.2%)

29.9(2.1%)

Operating result includes non-recurring itemsEUR 26.5 million. Operating result decreasedin Mail Communications and in Logistics. Theoperating result improved in Information.

*) non-IFRS = excluding non-recurring items

1

2

3

4

15 2013 Itella General Presentation

M€ 1-9/2013 1-9/2012

Consolidated cash flowfrom operating activities

9.8 55.8 Cash flow from operating activities declinedbecause of weaker operating result and thegrowth in working capital.

Return on investedcapital (ROIC), 12months

1.1 5.8 Return on invested capital is not on a targetedlevel.

Gearing 30.3 22.3 Because of seasonal fluctuation gearing isusually on the highest level in the end of Q3.

*) non-IFRS = excluding non-recurring items16

1

2

3

2013

Key financial figuresJanuary-September

Itella General Presentation

Net sales grew in July-September

17Target: At least in par with market growth

264.4 257.0

188.1 210.1

60.3 61.3

7-9 2012 7-9 2013Itella Mail Communications Itella Logistics Itella Information

445.6 457.0

+2.6%

1.7%

-2.8%

11.7%

M€


Net sales by georaphical areas inJuly-September 2013

18

Finland

Scandinavia

Russia and theBaltic countries

Other countries70 %

13 %

5 %12 %

M€ 7-9/2013 7-9/2012

Finland 319.5 295.0

Scandinavia 55.6 64.9

Russia and theBaltic countries

59.0 62.3

Other countries 22.9 23.3

Group 457.0 445.6


* The growth in Q3 net sales in Russia was+11% in local currency.

Operating result* declined

19 Itella Oyj

12.5

-2.9

5.9

Itella Mail Communications Itella Logistics Itella Information

2.50.2

8.0

7-9/2012 7-9/2013

11.9

-33.1%

22.7%

-80.0%

M€

30.10.2013

7.2

* non-IFRS = excluding non-recurring items

ItellaMail Communications


Itella Mail Communications


Net sales: € 1,167.6 million

Number of staff: 17,844

Deliveries: nearly 3 billion a year

Services

Countries of operation

Vision and mission

• Finland

• Estonia

• Russia

VisionThe market’s leading multi-channelforwarder of goods and information, asrequired by the customer’s recipients

MissionThe multi-channel distribution of society’sgoods and information

Key figures

• Letter, publication, and direct mail deliverysolutions

• Domestic and international parcel services• Posti shops, postal agency shops, pickup

outlets, and SmartPOST automatic parcelterminals

• Comprehensive solutions for onlinecommerce

• Electronic postla services, Netposti• Online tools for marketing communication• Analysis, target group, and register

corrections services

2013

Itella Mail Communications

Itella Mail Communications produces and developsmulti-channel distribution channel services forcompanies and communities. By doing thiscustomers can reach their own customerssuccessfully.

• Distribution services of the letters, packages andnewspapers in Finland. Through partnersworldwide.

• High-quality mail services under the Posti brandfor consumers.

• Direct customers are mainly companies andcommunities (about 95%).


Service development to corporatecustomers


• Letter and newspaper services develop whencustomers' communication needs change.

• Service selection becomes more simple.• New service wholenesses for small and medium-sized

companies also in the net.• An electric tool which can be used to improve the

addressing of the shipment lot and to facilitate apreliminary work which precedes mailing.

• New versatile alternatives for receiving the shipmentswhich arrive at the companies.

• Solutions for targeted marketing in Finland and inMoscow in Russia.

• Climate friendly Itella Green: a basic property of theletters and papers without the surcharge.

2013

24 Itella General Presentation2013

Itella Logistics


Itella Logistics in Brief

Turnover: € 781.5 million


Number of service warehouses: 45

Floor area of warehouses: Nearly one million square

meters

Number of road, air and sea shipments: 780,000

Services


Vision and mission

• Finland

• Sweden

• Norway

• Denmark

VisionRegional top performer in service logistics

MissionWe offer logistics to create customer, personneland shareholder value

Key figures

• Global road, air, and sea freight• Domestic freight• Warehousing services• Logistics information system

• Estonia

• Latvia

• Lithuania

• Russia

2013

Local Intimacy, Global Reach

26

FinlandHelsinkiLahtiTampereTurkuOuluKuopio

SwedenStockholmJönköpingBorås

NorwayOsloBergenStavangerKristiansandTrondheim

DenmarkHvidovreKoldingRisskov

LithuaniaVilniusKlaipedaKaunasLatvia

Riga

RussiaSt. PetersburgMoscowRostov-on-DonSamaraEkaterinburgNovosibirskVladivostok

EstoniaTallinn

2013 Itella General Presentation

Partnering with Itella in children'swear logistics


• Working with Itella is smooth and easy;the company is a true expert on

operating in Russia. The right products are inthe right place at the right time. This is thecornerstone for this type of industry, enablingus to efficiently expand our brand in Russia.

• Katariina KaislaLogistics Manager, Reima

”2013


OpusCapita

OpusCapita


Services


Vision and mission

Key figures

• Finland, Sweden, Norway, Denmark,

Germany, Poland, Estonia, Latvia,

Lithuania and Slovakia

• Presence almost everywhere in

Europe and North America through

the partnership network

Vision# 1 value provider in financial processesin Europe

MissionOptimization of financial transactionalprocesses

Net sales: € 270.1 million


Number of customers: 10,000

Number of incoming invoices: over

30 million annually

• Outbound services• E-invoice operator• Finance and accounting services• Outsourcing• OpusCapita cash flow automation• Electronic order-supply chain

2013

OpusCapita – Part of Itella GroupPan European Financial Process Innovation Company

Itella General Presentation

• Over 300 outsourced Financeand Accounting processes

• Over 30 million incominginvoices processed annually

• Approximately 140 millionelectronic transactions deliveredyearly

• 1 800 million paperdocuments processed per year

• 1 300 million documentselectronically archived annually

30 2013

OpusCapita’s Global Success

198201

247 247260

274 270

0

50

100

150

200

250

300

2006 2007 2008 2009 2010 2011 2012

Net sales (Meur)

• Operates in 10countries in Europe

• Roots in informationlogistics

• Strong growth byfocusing onfinancial processinnovation

• Over 20 years ofexperience with10,000 customers


Corporate Responsibility


Corporate Responsibility at Itella

• Responsibility has been the cornerstone of Itella’s operations for nearly400 years– Corporate responsibility is part of Itella’s strategy and based on our

values– Our Corporate Responsibility Principles define the essential

commitments and sectors of Itella’s corporate responsibility. Theprinciples are concretized in the Employee Code of Conduct

• We are committed to the UN Global Compact principles– Fundamental rights at work, the eradication of corruption,

environmental protection, human rights• We measure and prepare reports on corporate responsibility

according to the GRI guidelines (GRI = Global Reporting Initiative) andwe also follow the reporting model set for the state-owned companies

• Corporate responsibility comprises four sectors:finance, environment, people, society


34

SOCIAL RESPONSIBILITY- Reliability- Nationwide services in Finland- Ethical principles

PEOPLE RESPONSIBILITY

- Well-being at work- Good leadership- Diverse workplace

à The best empoyer in its sector

ENVIRONMENTALRESPONSIBILITY

- Energy-efficiency- Green products- Renewable energy

à Environmental efficiency

FINANCIAL RESPONSIBILITY

- Long term view- Proactiveness- Innovativeness

à Profitable growth

Itella is a reliable and open bearerof responsibility

à Functional infrastructure


Examples of Itella’s corporateresponsibility


• Because of Itella’s real estates’ energy saving program electricityconsumption reduced by 7% and heat consumption by 11% in 2011in Finland (saving of € 1.1 MEUR).

• In the fall of 2011, Itella’s natural gas vehicles switched to adomestic brand of renewable biogas, with exceptionally low carbondioxide and other greenhouse gas emissions as well as lowparticulate emissions in comparison to conventional fuels.

• The logistics center under construction in Pennala pays attention toenvironmental issues comprehensively.

• Already 70% of Itella’s staff works in an office that has ISO 14001environmental certificate.

• In 2011 Itella became the first postal company in the world to offerentirely carbon-neutral delivery services.

• Itella received The Environmental Achievement of the Year awardat the international postal industry fair in September 2011.

• Itella was granted the HR Deed of the Year competition for 2011with its project aiming to provide more well-being throughinteractive and participatory leadership.

2013

Smart Move

36 Itella General Presentation2013

Itella group presentation

Business

postal act itella

history of postal services

ecommerce services

telecom services

finnish post

postal agency shops

telecommunications of

countries net sales