Annual report 2016

Society

One stamped letter per month

Postal services are facing a major transformation in Europe as digitization reduces mail delivery volumes substantially. Lower volumes, strict regulations and the general rise in costs are significantly increasing the unit costs of the delivered products. Today’s mail delivery volumes are 30 percent lower than five years ago.

Posti is the only operator in Finland to provide five-day delivery services that cover the entire country. The universal service obligation covers the entire country, with the exception of the Åland Islands. The Finnish Communications Regulatory Authority supervises compliance with the obligation.

Following the amendments to the Finnish Postal Act in June 2016, the entire postal market is now open to free competition. This means that Posti’s competitors are allowed to deliver mail anywhere and at any time without a specific delivery day obligation. Posti, however, is still subject to the five-day delivery obligation throughout the country, which puts Posti on unequal footing with regard to competition with the other players in the market.

Posti’s universal service obligation currently covers a very small share of all postal items, namely letters and postcards paid by stamps. In 2016, Posti delivered some 2.1 billion items in total. Of this amount, approximately 109 million items (less than 6 percent) were covered by the universal service obligation. Christmas cards accounted for 28 million of these. Christmas cards are sent over a period of just a few weeks.

Finns currently receive an average of approximately 11 stamped letters per year, or about one letter per month. The lower the volume of mail delivered, the higher the costs for each item. Things must be done differently to keep costs under control. Otherwise, maintaining the universal service in the future will be under threat financially. The second phase of the reform of the Postal Act is underway, with new amendments expected to enter into force in June 1, 2017.

During the year, Posti delivered items that fall within the scope of the universal service obligation on five weekdays to all households in accordance with the Postal Act. In areas that are difficult to reach, Posti deviated from the five-weekday obligation in the case of approximately 91 households, with the maximum allowed number being 300. Posti processed 1,910 inquiries related to normal letters during the year. Of these inquiries, 652 were unresolved, 456 items were declared as having been lost, while 802 lost items were found. Inquiries related to letter items represented 0,00024 percent of the total volume.


A jubilee year for the Postal Museum

The Postal Museum is an active 90-year-old. Established in 1926, the Postal Museum studies, records and exhibits historical and present-day phenomena related to postal operations, mail communications and data and goods traffic. Maintained by the Postal Museum Foundation, the museum is located in Museum Centre Vapriikki in Tampere. Its collection includes artifacts and images from Posti’s archives as well as all of the stamps ever published in Finland. The Postal Museum also comprises a special library focused on the industry.

The Finnish postage stamp remarkably celebrated its 160th anniversary in 2016. The mock-up sheet of Finland’s first stamps and the die used to produce the stamps are exhibited at the Postal Museum. The Postal Museum is responsible for the archival, presentation and information services related to Posti’s nearly 400-year corporate history. The museum also manages Posti’s art collection.

The relocation of the Postal Museum from Helsinki to Tampere in 2013–2014 has proved to be an excellent decision: the number of visitors has tripled and feedback from the public has been positive. The year 2016 was a record year: the total number of visitors was 168,784. A high level of event activity and educational work with institutions ranging from day-care centers to universities are also part of the museum’s day-to-day operations. The Postal Museum engages in research collaboration with various universities and publishes the results of research both digitally and in traditional book format. One of the focus areas of the museum’s research activities has been communications in times of crisis and wartime correspondence.

The exhibition activities in 2016 covered themes ranging from covert correspondence between jaegers to all the stamps of Christmas, the story of the Finnish humor magazine Pahkasika and the illustration of Posti’s long history and present-day challenges in the Messengers exhibition. The Postal Museum also highlighted the change in the equipment used in mail transport and fixed up the first electricity-powered delivery vehicle, a 1992 Elcat. The vehicle was included in the exhibition From Minivans to Pick-ups – The History of Delivery Vehicles and Transportation held at the national automobile and road museum Mobilia. The Postal Museum cooperates on a networked basis with various parties and is a member of international networks. The Postal Museum will hold special events to celebrate the centenary of Finland’s independence!

 

Transparency and profitability are at the core of financial responsibility

Posti’s financial responsibility is based on transparency and profitability. Posti wants to grow profitably, as only a financially sound company can implement its sustainability practices. Posti complies with responsible business practices in all of its operations.

Posti plans its finances from a long-term perspective, anticipating changes in the market, customer demands and risk scenarios in Finland and abroad. Posti develops innovative and efficient solutions in both physical and digital services.

Posti is a state-owned company that operates on market terms. Posti’s operations are entirely based on the revenue received from the customers. Posti bears its financial responsibility through the renewal of its business and by improving its profitability in line with its strategy.

Posti’s financial targets are: the operating profit is more than 5 percent, the return on capital is at least 10 percent, gearing does not exceed 35 percent and more than 10 percent of the Group’s net sales will come from new business areas in 2018. The financial impact of Posti’s operations is comparable to those of the banking and telecommunications sectors, as the services are used by hundreds of thousands of private and public sector operators every day, in addition to consumers.

Financial impact in accordance with the income statement

 

 

Posti supports development and well-being throughout the country. The Group’s operations span the entire country, and Posti is an important employer in Finland. At the end of 2016, Posti had 20,497 employees in Finland. In addition to providing employment, Posti’s operations generate well-being in and tax revenue for Finland.

The geographical distribution of Posti’s employees in Finland on December 31, 2016