2.3 PLANS OF THE POŠTA SLOVENIJE GROUP IN 2021

We are planning the continued growth of the Pošta Slovenije Group in 2021, despite taking into account the changes in the environment, the replacement of conventional services with e-services (e-substitution) and the changes in customers’ habits. We also include the effects of projects from the SDP 2025 and the Intereuropa subsidiary in the business plan. Revenues from parcel and logistics services will remain key to achieving growth, while letter and IT services, and network services remain important.

The following objectives were set for 2021:

The Pošta Slovenije Group is planning 4% growth in net sales revenue in 2021, generating 50.6 percent of its income from logistics and parcel services, which in terms of the comparative share of these services in total revenues ranks us alongside the most advanced postal operators in the EU.

A ROE of 2.2% and an EBITDA margin of 9.5% are in line with the expectations of the owner.

The volume of postal and financial services has continued to decline in recent years, while the structure of such shipments is also changing due to the migration to e-operations, legislative changes, changing customer habits and competition on the postal and financial services market. Similar trends are also present at other postal operators in the EU and around the globe.

We will maintain our leading position on the domestic market in the area of letter mail. Given the rapidly changing needs of the population and according to the legislation, priority and non-priority mail items will be introduced together with process and postal network optimisation. In addition, we will further optimise and robotise the preparing of unaddressed direct mail, introduce the automation of import procedures for goods, and adapt them to legislative and customer requirements, introducing new products for the delivery of goods in letter mail, standardising the delivery of goods with letter mail with delivery options that apply to parcel mail.

The parcel market has been recording growth for several years, both in Slovenia and globally, and that trend will continue in the future as the result of growth in online sales and supply chains. In product development, we pursue the objective of improving the user experience, primarily in terms of improving the quality of the provision of services, introduction of new solutions for business users and addressees, and upgrading the level of information support. In the area of parcel distribution, our aim is to become the leading and best provider of parcel services in Slovenia and the region. We will therefore focus on increasing capacities, on improving the efficiency and the quality of services, and on expansion to regional markets through acquisitions and partnerships.

With the purchase of a majority shareholding in Intereuropa, the Pošta Slovenije Group’s main focus in the area of logistics services will be on the successful integration of Intereuropa and thus expansion to regional markets. Our aim is to become an outstanding provider of comprehensive logistics services in Slovenia and one of the key providers in Southeast Europe.

The Group’s development-commercial activities will focus on the search for new transactions, the realisation of which will be based on providing a comprehensive range of high-quality and reliable logistics services tailored to the needs of customers for all market and business segments (mass consumption, household appliances, car logistics, heavy industry, pharmaceuticals, chemicals, fuels, hazardous materials, etc.).

In the area of IT services, we will enhance the portfolio and increase market share primarily in the areas of digitalisation and paperless operations. Under the Posita brand, we will launch a comprehensive platform for information services for contemporary digital operations, which in one place provides information infrastructure, a business information system, document solutions, the digitalisation of documentary material and long-term secure storage, electronic exchange and delivery of documents, and trust-based services.

With its range of products and services, Posita will serve as a partner for the development and implementation of digital transformation solutions in various economic sectors and in public administration.

Given the rapid global growth in online commerce and the associated increased growth trends in parcel and logistics services and the e-commerce segment, we are continuing with investments in the expansion of the capacities of mail sorting and logistics centres, and the construction of additional warehousing and transhipment capacities. In addition to upgrading existing services and the development of new services, we have been investing in the modernisation and computerisation of operations in recent years. An investment in the construction of a hall is currently underway at the site of the Ljubljana mail sorting and logistics centre.

Pošta Slovenije follows global postal and logistics developments, and is opening new channels through which we reach customers with our services. In accordance with trends in online sales, we will also link the plug-in that facilitates the selection of alternative delivery options with information solutions for labelling shipments and exchanging e-data, and thus further satisfy the needs of online retailers. In the scope of the alternative delivery options we plan to expand our parcel delivery box network and continue with the introduction of information solutions for customers to be able to use these boxes. We will also upgrade the portfolio with the introduction of electronic document signing (for signing delivery notes, contracts, the receipt of shipments in postal outlets, etc.), and self-service automated machines for labelling shipments. We will also continue to expand the network for accessing postal services with the inclusion of new petrol service stations. The provision of services in the above-described ways provides customers greater flexibility in terms of the time and place of the provision of services. Of course, we are careful to combine these solutions with the traditional post office network.