Header Image Placeholder

Chief Executive’s Review

Image Placeholder on top of main text

Main Text Placeholder

Financial Performance

As the Chairman has indicated in his statement, our Transformation Programme has continued to produce significant results. The operating profit for the year of €31m, or 3.7% of turnover, is gratifying for a number of reasons. It reflects the effort and commitment of management and staff during 2008; it leaves us well positioned to prepare the group for a more challenging future in a fully liberalised postal market and it indicates the resilience of our core businesses.

This strong performance was driven by a combination of mail volume growth in the early part of the year, strong revenue throughout the year in retail counter services, efficiencies gained as part of the implementation of our Change Programmes and consistent adherence to strict cost discipline.

As the economic environment gradually deteriorated during the second half of the year, volume growth evaporated, leaving mail volumes for 2008 down 2% on the previous year. Group cash flow was strong, however, with cash of €44m generated from operations.

The significant increase in revenue generated by retail counter services was due to an increase in the number of Social Welfare recipients and the popularity of savings products operated by An Post on behalf of the National Treasury Management Agency. Postbank continued to perform well, in line with plans.

Over the last five years we have achieved a €74m turnaround in Group operating profits, maintained a firm focus on costs and made dramatic improvements in virtually every aspect of our business. This performance sets the necessary back-drop in the run-up to the full opening of the postal market. It places us in a better position to face the competitive challenges which will arise and also helps us to face the many difficulties posed by the current economic downturn. However, further progress is required to achieve the necessary level of competitiveness associated with success in a fully liberalised postal market.


Mails Quality Of Service

Mail collection and delivery are our core services. Consistently achieving independently measured quality of service targets is our top priority. Any failure to maintain this focus will quickly undermine our existing business and our future potential. Meeting service targets, along with improved efficiencies, are fundamental to our ability to withstand the challenges of full competition from 2011.

To this end, we remain committed to the achievement of our target of 94% next day delivery of domestic mail. During 2008, for instance, we designed, installed and implemented an electronic scanning system which enables us to track the times at which the mail in post boxes is collected. This has contributed to a two percentage points improvement in next day domestic delivery, which was recently reported at 79% for the full year, up from 77% in 2007.

We expect that further improvement, directly attributable to this scanning system, will be demonstrated when ComReg publishes Quality of Service statistics during 2009. Furthermore, we also expect it to lead to a reduction in customer complaints and to a higher level of customer satisfaction.

Last year, we invested a total of €39m to support the continued improvement in service quality, all of which was funded from operations. This is part of a multi-year €150m investment programme which will see the introduction of additional technologies, further capital expenditure on necessary infrastructure, investment in staff training and the adoption of new business processes.

An Post continues to consistently exceed the international mail delivery targets set by the International Post Corporation (IPC). In recognition of this, An Post was recently awarded the IPC Certificate for Excellence in the Management and Processing of International Letter Mail - having achieved and maintaineda standard of 95% next day delivery for incoming international mail and 85% for outgoing mail reaching its destination country next day. An Post is one of just 22 service providers worldwide to have received this standard of performance.

Customer Solutions

Customers expect us to be innovative in the development and delivery of products and services. To this end, we implemented a number of initiatives last year. These included a new on-line collections booking system, a new telephone system to improve the handling of customer queries and complaints and the launch of new Priority International Parcels and Express Letters services.

A number of postal vending kiosks were installed on a pilot basis in selected high density locations and these have proved to be highly successful. We have also entered into an agreement with Vodafone through which An Post will become a Mobile Virtual Network Operator later this year.

Ongoing Transformation

We have been engaged for some time in a major Transformation Programme, covering all aspects of our operations, to prepare for the full liberalisation of the postal market in Ireland in 2011. The Programme comprises a dynamic portfolio of projects, with new ones commencing as others are completed.

The initial driver for this Programme was the need to prepare for EU liberalisation of mail services, but it has become increasingly evident that it is necessary for our ongoing commercial success and has a central role to play in helping us to become much more customer focused, more responsive in addressing problems as they arise and in seizing business opportunities as they are identified.

I am pleased by the improvements already delivered by this Programme in a number of areas. The Attendance Management Project, for example, has seen us actively reduce the level of absence due to illness moving it to a level approaching the national norm. I believe that further progress can be achieved in this area in co-operation with staff through our Partnership Forum process.

Towards the end of 2008, we began planning the next phase of the Transformation Programme. Focused on how An Post should compete in the future, this will help us formulate and implement strategies that will encourage customers to choose us over our competitors in the fully liberalised marketplace.

Cost and Efficiency

An Post is determined to make continued strong progress during 2009 in the areas of cost control and efficiency gain. One of the most important ongoing initiatives is in the area of mail collection and delivery. Our aim is to optimise efficiency in every aspect of this process, from work-flow management to structures and logistics, with the ultimate goal being consistency of service to all customers – and most particularly to the changing needs of our business customers.

Involving significant capital investment, to date the Collection and Delivery Project has been completed in 40 offices throughout the country. It has ensured that, in line with more streamlined processes, staff have the premises and equipment necessary to optimise mail delivery. I am confident that this ongoing programme will make a significant contribution to sustainable improvements in customer service.

Building Organisational Capability

An Post recognises that the service experienced by its customers is determined, to a large extent, by the behaviours and values of its employees and contractors. Part of my role as Chief Executive is to build employee morale and commitment, and to demonstrate that An Post can continue to be successful, provided we put the needs of our customers first and at the very centre of our mission.

We continued our investment in management and leadership development during 2008 with all of the Company’s senior and middle managers taking part in a major initiative specifically designed for An Post and the challenges we must overcome in the coming years. This investment in leadership development will be maintained in 2009 across all levels. This will build the capability of all our managers and staff in order to successfully meet the challenge of full market liberalisation from 2011.

The revitalisation of the partnership process within An Post continued in 2008 with all of us, both management and unions, using this customer-focussed process to discuss how best to cooperate and ensure that An Post competes effectively in the liberalised postal market. Likewise, several important internal communications initiatives were implemented to improve the flow of information, keeping everyone throughout the Company informed of developments within the business.


Retail services performed well during 2008 and there appears to be scope for further growth in our retail business as a whole, notwithstanding the current difficult economic climate. Some of this will be organic as customers increase their use of the Post Office for existing services.

In such a changing environment, the trustworthiness inherent in the An Post brand is of increasing importance to many people. This represents a significant opportunity for An Post, which manages one of the largest, best known and most trusted branch networks in the country. We will pursue these opportunities with vigour and determination in parallel with our investment in a new direction for the Retail Network.

New Postbank services were successfully rolled-out throughout our network in 2008. The introduction of the “Everyday” current account moved Postbank firmly into the territory of the larger retail banks and this was followed by the roll-out of new insurance services. It is intended to add personal loans, credit cards and mortgages to the company’s product portfolio in 2009.

Like many European institutions, Fortis Bank, our partner in Postbank, has not been immune from the uncertain business environment for financial services firms. However, we are confident that satisfactory and positive arrangements will emerge and that the objectives set for Postbank can be met to the benefit of customers, postmasters and An Post.


I would like to thank the Board for their assistance and guidance during 2008 and, in particular, I would like to thank our Chairman, John Fitzgerald, for his contribution and support. I would also like to thank all our customers for their continued support. I can assure them that we remain committed to doing everything in our power to be their service provider of choice in all aspects of our business.

Overall, 2008 was a year of significant achievement for An Post. We have clear objectives and a robust Transformation Programme designed to help us achieve them. We have clearly put customer needs and service quality right at the centre of our plans and we continue to work with our customers, both residential and business, to deliver efficient solutions to their needs. We are all fully committed to this approach and we are ready to meet future challenges with great confidence.

Everyone involved with An Post can be pleased with, and encouraged by, the progress made during 2008. However, while we can look to the future from a solid base of consistent performance improvement, there is no escaping the harsh reality that the short to medium term future is extremely challenging.

The economic downturn is bringing new challenges for everyone and is having a negative effect on mail volumes. Given the high level of fixed costs involved in the provision of our mail services, this has the potential to impact negatively on our ongoing profitability. This will also clearly make the task of preparing for full market liberalisation all the more difficult.

Ultimately, however, we must respond to the market as we find it. It is really important in these challenging times to focus on those things that we can control and, in doing so, be better prepared for the impact of those that we cannot. I am confident that, with a strong sense of common purpose established, we are prepared to meet these challenges and, by working together, we will adapt and succeed in our mission.

Donal Connell
Chief Executive
19 March, 2009

Right Column Image Placeholder

Right Column Text Placeholder


Cash generated from operations €44m 

Collection points 8,500

International incoming mail next day delivery 95%

Items of Post delivered daily 3.5m

Visits to Post Offices per week 1.7m