A strategic business investment opportunity for Postal Messaging © Copyright Ben Livson 1999-2000....

A strategic business investment opportunity for Postal Messaging

© Copyright Ben Livson 1999-2000. All rights reserved. Confidential.

@Post Corporation


AgendaIntroductions 5 min

Background: Postal Messaging 10 min

The @Post Opportunity 30 min

The Business Opportunity 5 min

Product concept 10 min

How it can be structured 5 min

Projections and conclusion 10 min

Discussion & Questions 30 min

The Way Forward 15 min

1. The Business Opportunity


Planned @Post Float > $1b

• Projected Y3 revenue > $300m

• Projected Y3 profit > $50m

• Projected float value > $1b


Why an @Post float makes sense

• PS accesses major share pre-dilution of the @Post business for a low price

• Unlocks real value in PS’s assets

• This provides capital for PS to invest in other products and services that will take it into the 21st century

• Expands future options for floating other parts of Postal Service Business

2. The @Post product concept


@Post Product Concept

• @Post is unified messaging integrating: Postal letter service E-mail & Web Voicemail Fax, Pager, EDI and SMS

+ other key service features like redirection & print-on demand


PublicInternet

Postal ServicesFinal Distribution

WebService

Activator

WebService

ActivatorWebTracker

WebTracker

Web-enabledCustomer

Care

Web-enabledCustomer

Care

Surface MailSurface Mail

Royal MailUSPS, IDP..

GatewayGatewayVoice MailVoice Mail

HelpHelp DeskRobot

Intelligent Addressingand Distributed Nodes

Managed InterfacesManaged Interfaces

GHM Intranet

@Post Unified Messaging

EmailEmail

Fax, EDI, Pager & SMSFax, EDI, Pager & SMSDirectoryServices

DirectoryServices

@Post+ePOST+IDP


The @Post team has backed its vision with IP

investments

Method for Integrating Internet SMTP Electronic Messaging with Postal Services

(US Patent Pending App# 09/113,344)

Scratch Cash Method of Payment for Electronic Commerce

(US Patent Pending App# 09/211,485)

3. Structuring the investment


@Post Equity Funding Proposal

• Starting @Post would need a $20m investment over its first two years.


@Post Equity Funding Strategy

• Mezzanine Equity - $10m by Postal Service and Executive Team:

• PS: Cash, IP and Postal Services• ET: Cash, IP and discounted management

fees for 5 years• Initial Dilution - $10m funded by Strategic

Investor for approx. 25% equity• Final Dilution - IPO approx.10-20%

4. Projections and conclusion


Global Hybrid Mail Market 2002

• 124b letters world-wide

• 27% of total letter mail traffic

• 38% of the market potential for hybrid mail

• Web-based @post potential 18-to-40% of GHM depending on country (USA 40%)

• Source: by Jean-Francois Rodriguez, Business Development Manager, IDP 1999


@Post Revenue Projection

• Extrapolated from Finland Post PC ePOST:

• 1Y 20m items $30m

• 2Y 100m items $150m

• 3Y 200m items $300m

• 4Y onwards 30% growth until year 10

• Profit target for 3Y: $50m

• Float: > $1b


@Post Direct Mail Market

• Direct Mail Growth > 30% pa achievable see UPU Direct Mail Survey 97-98

• Target 100 direct mails/capita -> 2b letters• @Post Direct Mail target: 200m (10%)• Contra –4% pa business-to-business SP 98• SME Business-to-Consumer is prime @Post• Markets: 1 - Direct Mail and 2 - Billing


@Post Billing Services Market

• Aust. Market: 400m+ bills & invoices pa

• Bills & invoices are 10% of letter services

• 5% of VLEs = 65% bills

• 95% SMEs = 35% bills @Post 140m

• Hybrid bill preference 80% vis electronic

• @Post marketing target 50m bills in 3 years

• Hybrid e-bill part of Sweden Post’s @Post


Moving ForwardEnd date

PS response to @Post 1 month

Review and confirm equity options 2 month

Heads of Agreement 2 month

JV documentation 3 month

Detailed Business Plan 3 month

Operational Marketing Plan 3 month

Due Diligence 4 month

@Post start 5 month

SUPPORTING MATERIAL

Section 1. Industry revolution


The Wheels Are Spinning FASTER

• It took 38 years before 50 millions Americans were listening to radio;

• Television reached 50 million in 14 years;

• Internet reached 50 million in 4 years.

• This is a wake up call for Postal Services

• Projects: Defence=5-10 years, MIS=1 year and E-Services=1-3 months.


@Post offers Postal Services

• Seamless Web & E-mail Integration with Postal Services

• Maximise Return On Investment

• Optional Deployment of Tumbleweed Posta™ Integrated Messaging Exchange used by leading postal services incl.USPS

• Enhance Print & Internet Fulfillment ROI


Leading Postal Service Initiatives– IDP PC ePOST & Sweden Post @Post– US E-Stamp and Stamp Marker Internet

Postage Metering – Tumbleweed Posta™ Service Providers:

UPS Online ® Dossier and UPS OnLine ® Courier and Pitney Bowes iSend … E.C.S

– PostECS Post Electronic Courier Service by USPS-Canada Post-La Poste=Posta™

– Eletter.com & Pitney Bowes NetDirect

Section 2. Market Research


ePOST letter volumes in Finland

Finland ePOST Australia @Post Projection

• 1Y 10m 50m

• 2Y 17m 120m

• 3Y 23m 200m

• 4Y 31m 300m

• 5Y 40m 400m

Population: Finland 5m vis ANZ: 23m


Customer Preferences

• Hardcopy preferred over electronic media: Category Consumer % Business %

• Document 94% 83%

• Invoice 89% 79%

• Bank statem. 85% 71%

• Advertising 74% 63%

Source: Finland Post Annual Report 1998


Hybrid Mail Consumer Benefits• Full automation of the postal process from

printing, addressing, folding, inserting into envelop, franking-metering & delivery

• Annual saving of 100+ hours per person• No technology required for consumer to receive

and send email and fax!• Wrongly addressed mail minimised by PAF DPID • Speed of delivery maximised• Quality printed paid letter vis junk email


Marketing Strategy

• Aggressive launch followed by appropriate maintenance levels

• Comprehensive industry study undertaken to determine optimum media mix and expenditure/revenue ratio

• Optimise use of Postal Service print fulfillment & @Post facilities


All Media - National SummaryJan - May 1999

ClientMedia Total

MTV RTV MPress RPress Mag Radio Cinema Outdoor

AAPT Smartchat 2011 1255 8 578 170Optus Netsaver Internet Svc 1479 797 115 5 562One Net Internet Access 1604 1220 44 305 31 4Primus Internet Svc 755 263 55 376 22 9 30Telstra Big Pond 1708 1222 63 351 62 10Yahoo Internet Search Eng 346 159 8 139 40

ClientMedia Total

MTV RTV MPress RPress Mag Radio Cinema Outdoor

Optus Microplex Internet Svc 837 129 486 188 26 8Nine MSN Internet Site 1916 641 1275One Net Internet Access 1229 413 16 714 13 73Ozemail Internet Acc Prv 1103 341 1 125 22 368 246Telstra Big Pond I/Net 5233 3687 299 672 64 493 18Telstra Easymail Svc 1154 798 42 314


All Media National SummaryForecast Year 1 to 3

ClientMedia Total 000's

MTV RTV MPress RPress Mag Radio Cinema Outdoor Internet ProductionBelowline

Hybrid Mail - Year 1 11544 3700 0 700 0 1000 22 150 150 2000 1158 2664



Hybrid Mail - Year 2 10405 3000 0 640 0 900 20 200 200 2000 1044 2401



Hybrid Mail- Year 3 8085 2000 300 500 100 600 15 150 300 1500 820 1800

Section 3. Operational Aspects


Staging of @Post Corporation• 1Y 2Q @Post Pilot & Evaluate PostECS• 1Y 4Q Launch @Post Message Switch Service

Integrated with ePOST-IDP.• 2Y 1Q Integrate Direct Marketing Databases• 2Y 2Q-4Q Fax, Voicemail, SMS & Pager

Gateways for Value Added Messaging• 2Y 2Q-4Q Value Added Billing-Invoicing• 3Y Inbound Mail-Room + V-Addresses


Addenda: Intelligent Addressing

• [service-flags]#address@domain• Address types include email, postal, phone voice

mail, fax, EDI, SMS-pager etc. Examples:• Ben.Livson.36.Minnamurra_Road.[NSW.]

2063[.Australia]@domain for postage• [61.2]99580489@domain for voice mail• [61.2]99583915@domain for facsimile

A strategic business investment opportunity for Postal Messaging © Copyright Ben Livson 1999-2000....

Documents

Transcript of A strategic business investment opportunity for Postal Messaging © Copyright Ben Livson 1999-2000....