ANNUAL REPORT 2014 Parcels - the driving force behind development

Poland was the first European country to carry out such a contest.

MASTERY taking up responsibility for employee development and for implementing changes is a part of leadership EFFICIENCY our actions are effective, smooth, and simple TRUST we treat our customers the way we would like to be treated

The European Union imposes an obligation to designate an operator for the provision of universal services on member states, striving to ensure that citizens have access to top quality services rendered at affordable prices and pursuant to uniform rules throughout the entire country.

INITIATIVE we focus on finding solutions, not people to blame

Sąd Rejestrowy: Sąd Rejonowy m.st. Warszawy Kapitał zakładowy: 774 140 000, w całości wpłacony

for rendering universal postal services until 2025. The contest was organised by the Office of Electronic Communications.

RELIABILITY just treatment of our company and of one another

www.poczta-polska.pl

ADRES: ul. Rodziny Hiszpańskich 8, 00-940 Warszawa NIP: 525-000-73-13, KRS: 0000334972

ANNUAL REPORT 2014 Parcels the driving force behind development

Poczta Polska won the contest for the designated postal operator

Raport Roczny 2014

Letter from the President of the Supervisory Board . . . . . . . . . . . 2 Letter from the President of the Management Board. . . . . . . . . . 4 Members of the Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . 6 Members of the Management Board . . . . . . . . . . . . . . . . . . . . . . 7

LIST OF CONTENTS

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Brief description of Poczta Polska S.A. . . . . . . . . . . . . . . . . . . . . . . 10 Structure of Poczta Polska Group . . . . . . . . . . . . . . . . . . . . . . . . . 11 Corporate mission, vision, and values . . . . . . . . . . . . . . . . . . . . . . 12 Summary of 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Calendar of the most important events . . . . . . . . . . . . . . . . . . . . 15 Awards and distinctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 External considerations affecting the functioning of Poczta Polska in 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Basic economic tendencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Situation of the postal services sector . . . . . . . . . . . . . . . . . . . . . 23 Regulatory environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Poczta Polska brings in a profit for the fifth year in a row:

Business activity of Poczta Polska S.A. in 2014 . . . . . . . . . . . . . . 28 Performance of the company’s strategy . . . . . . . . . . . . . . . . . . . . 28 Communication - letter and advertising services . . . . . . . . . . . . . 29 CEP and logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Commerce and philately . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

PLN

142 million

gross profit of Poczta Polska Group in 2014, greater than the 2013 profit by 52%.

Key accounts and contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

The parcel segment of Poczta Polska in 2014 developed twice as fast as the rest of the market

Improving the quality of services rendered . . . . . . . . . . . . . . . . . 40

Development goals and perspectives of Poczta Polska until 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Key market tendencies in the years to come . . . . . . . . . . . . . . . . 46 Development goals and perspectives of Poczta Polska S.A. for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Investments in development in 2014 . . . . . . . . . . . . . . . . . . . . . . 50 Investment plans for the nearest future . . . . . . . . . . . . . . . . . . . . 51 Structural development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Structure of Poczta Polska S.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Employment status and structure . . . . . . . . . . . . . . . . . . . . . . . . . 55 Training and development projects . . . . . . . . . . . . . . . . . . . . . . . 55 Dialogue between the employer and the society . . . . . . . . . . . . . 57 Activity of Poczta Polska for the benefit of the environment . . 60 Implementation of corporate social responsibility principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Charitable activity and support for pro-social initiatives . . . . . . . 67 Financial performance of Poczta Polska in 2014 . . . . . . . . . . . . . 70 Main factors influencing the company’s financial performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Factors and extraordinary events which significantly influence the company’s financial performance . . . . . . . . . . . . . 71 Financial standing and sources of asset coverage . . . . . . . . . . . . . 74 Management of financial resources and financial solvency . . . . . 75 Basic economic indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Challenges for Poczta Polska S.A. development in 2014 . . . . . . . . 77 Consolidated financial performance of Poczta Polska Group . . . . 79 Independent auditor’s opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Annual Report 2014

more that

PLN

290 million

invested in, inter alia, postal infrastructure (sorting machines, fleet), IT, sales network, as well as capital expenditure

Desktop postal service (Poczta na biurku), Mobile postal services (Poczta w kieszeni) registered mail already available online thanks to Envelo

costs of Poczta Polska decreased by

PLN

300 million

in 2014, they were lower by 5.1% than in 2013

Efficient reorganisation of Poczta Polska: costs incurred by the company decreased faster than its revenues

www.poczta-polska.pl

Sales network development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

LETTER FROM THE PRESIDENT OF THE SUPERVISORY BOARD This Report presents a full image of a company whose

Such discussions were influenced by an amendment to

financial performance keeps improving for the fifth

the Public Procurement Law which, to a considerable

year in a row, which strives to become the leader on

extent, improved the situation on the postal market.

the e-commerce logistics market, and which has

One of the changes introduced regarded awarding

successfully appeared on the Warsaw Stock Exchange.

orders as part of a tender - employment of employees on the basis of contracts of employment is now taken

Two events which took place last year - loss of the

into account in addition to the lowest price offered.

agreement for handling court and prosecutor letters

Ladies and Gentlemen,

and a decrease of the volume of letters handled

In view of such information, the fact that

by 180 million - only confirm that the decision taken

Poczta Polska S.A. was the only participant to submit

by the company’s management to intensively develop

a bid consistent with all requirements of the contest

alternative sources of income was correct.

and won it, being awarded 210 points out of 220

Poczta Polska S.A. is currently expanding its activity on

points possible according to the regulations, is even

the parcel market and in the area of comprehensive e-

more significant.

commerce services, developing its digital service

Poczta Polska has faced numerous through many changes In 2014, the company had been preparing itself for taking part in the contest for the designated operator and was determined to win. There were also efforts aimed at preparing a new development model for the company and at developing a new policy regarding employees. It was thanks to this that the Management Board was able to announce the new Poczta Polska 2020+ development strategy after the signing of the new Collective Labour Agreement and after the company won the contest for the designated operator.

2

Annual Report 2014

financial products. At the same time, the company

Poczta Polska S.A. is ready to provide top-quality

remains a major operator rendering postal services

communication, financial, and eGovernment services

which are both top quality and safe.

to private customers, to become an excellent logistical

This was confirmed with alarming reports from the

return on investment for shareholders, and to play a

media and the results of an inspection carried out by

strategic part in the country’s infrastructure.

OEC with regard to a tender for providing services to

throughout the previous effects are now evident.

This annual report for 2014 demonstrates that

partner for business customers, to guarantee stable

changes and has been

year. Their positive

platform (Envelo), and extending the range of its

the judiciary sector in 2014. However, increased

We can also guarantee that we are making every effort

competition on the postal services market and

to become the best and the most competitive of all

reservations regarding said tender also had some

postal operators and that we will continue to do so in

positive impact on the industry. Postal services were

the future.

widely discussed. Yours sincerely, Journalists and decision-making bodies started to

Józef Banach – President of the Supervisory Board

comprehend the strategic role of Poczta Polska S.A. for the country’s infrastructure. More and more often, while comparing public and private services, they took into account more than just the lowest price offered: they also considered quality, prompt performance of services, safety, customer comfort, employment structure, and the structural unit network.

3

LETTER FROM THE PRESIDENT OF THE SUPERVISORY BOARD This Report presents a full image of a company whose

Such discussions were influenced by an amendment to

financial performance keeps improving for the fifth

the Public Procurement Law which, to a considerable

year in a row, which strives to become the leader on

extent, improved the situation on the postal market.

the e-commerce logistics market, and which has

One of the changes introduced regarded awarding

successfully appeared on the Warsaw Stock Exchange.

orders as part of a tender - employment of employees on the basis of contracts of employment is now taken

Two events which took place last year - loss of the

into account in addition to the lowest price offered.

agreement for handling court and prosecutor letters

Ladies and Gentlemen,

and a decrease of the volume of letters handled

In view of such information, the fact that

by 180 million - only confirm that the decision taken

Poczta Polska S.A. was the only participant to submit

by the company’s management to intensively develop

a bid consistent with all requirements of the contest

alternative sources of income was correct.

and won it, being awarded 210 points out of 220

Poczta Polska S.A. is currently expanding its activity on

points possible according to the regulations, is even

the parcel market and in the area of comprehensive e-

more significant.

commerce services, developing its digital service

Poczta Polska has faced numerous through many changes In 2014, the company had been preparing itself for taking part in the contest for the designated operator and was determined to win. There were also efforts aimed at preparing a new development model for the company and at developing a new policy regarding employees. It was thanks to this that the Management Board was able to announce the new Poczta Polska 2020+ development strategy after the signing of the new Collective Labour Agreement and after the company won the contest for the designated operator.

2

Annual Report 2014

financial products. At the same time, the company

Poczta Polska S.A. is ready to provide top-quality

remains a major operator rendering postal services

communication, financial, and eGovernment services

which are both top quality and safe.

to private customers, to become an excellent logistical

This was confirmed with alarming reports from the

return on investment for shareholders, and to play a

media and the results of an inspection carried out by

strategic part in the country’s infrastructure.

OEC with regard to a tender for providing services to

throughout the previous effects are now evident.

This annual report for 2014 demonstrates that

partner for business customers, to guarantee stable

changes and has been

year. Their positive

platform (Envelo), and extending the range of its

the judiciary sector in 2014. However, increased

We can also guarantee that we are making every effort

competition on the postal services market and

to become the best and the most competitive of all

reservations regarding said tender also had some

postal operators and that we will continue to do so in

positive impact on the industry. Postal services were

the future.

widely discussed. Yours sincerely, Journalists and decision-making bodies started to

Józef Banach – President of the Supervisory Board

comprehend the strategic role of Poczta Polska S.A. for the country’s infrastructure. More and more often, while comparing public and private services, they took into account more than just the lowest price offered: they also considered quality, prompt performance of services, safety, customer comfort, employment structure, and the structural unit network.

3

LETTER FROM THE PRESIDENT OF THE MANAGEMENT BOARD

Ladies and Gentlemen, this was a breakthrough year for Poczta Polska S.A. Our strategy proved effective. Poczta Polska S.A., constituting the core of its Group, has a solid basis for remaining a profitable company with the potential to develop even further.

The previous year was very important due to a change of the way in which our customers perceive Poczta Polska S.A. In January 2014, companies competing with Poczta Polska S.A. started rendering postal services to the judiciary sector. We were greatly encouraged by the opinions of our customers. It was our customers who have many times emphasized the positive features of our company - particularly safety and promptness of delivery - which only reinforced our belief that Poczta Polska S.A. is indeed a public trust organisation in Poland. This is a good starting point for further developing the company, making it an institution of strategic importance for the country.

Winning the tender was also a challenge for us in strictly business terms. At the beginning of 2014, we started a programme called “Challenges affecting Poczta Polska development in 2014” which was aimed at remedying for the income of the company lost due to its taking part in the tender. Thanks to the involvement of our employees, we managed to minimise income lost due to the loss of our contract with the Ministry of Justice and it was, among other things, thanks to those efforts that our company achieved gross profits of over PLN 80 million last year. When examining the year 2014 and its substantial impact on the development of Poczta Polska S.A., we should also emphasize one opportunity we managed to seize: the dynamic development of e-commerce in Poland. Major Internet shops and Poles selling their products online make use of our services. More than 60% of Polish e-shops cooperate with Poczta Polska. This is a result of a change regarding our range of products and services and our expanding search for new customers on the market. Our modernized parcel offer, including optimum delivery time, competitive prices, and electronic value-added services, is appreciated by both our customers and the market at large. In June 2014, we activated a special platform (ecommerce.poczta-polska.pl) making comprehensive e-commerce services available to our customers. This reflects the importance of the growing ecommerce market to us. As far as the parcel market is concerned, our strategy is clear: we would like to handle as much of the e-commerce delivery chain as possible and we strive towards becoming one of the three largest service provided in Poland. Thanks to the changes we introduced to our offer and thanks to an adjustment of the company to the market, the position of Poczta Polska S.A. on the market keeps improving faster and more effectively than the average development rate for the market. Last year, our sales increased by 16% in terms of volume - twice as much as the rest of the market. We also received some appreciation as far as the conventional communication market is concerned. Throughout 2014, we have developed a new strategy which we presented at the beginning of 2015. According to that strategy, Poczta Polska Group’s development will largely depend on parcel and courier services. We are actively trying to win customers over: we have concluded 34 thousand contracts with large and small entities. It should be emphasized that the value of the 30 largest contracts concluded with companies and public institutions amounts to a total of PLN 430 million. We find such great performance very satisfying. We are now very competitive in terms of prices and we can quickly

react to what the market needs. From the perspective of our customers, the quality of our services is crucial. In 2014, we continued to make considerable investments in infrastructure and in ensuring prompt delivery. Our sorting stations sport the most modern sorting machines in Europe for sorting letters. From 2011 to 2014, Poczta Polska S.A. has spent over PLN 700 million on investments in property and as capital expenditure. At the same time, we also made investments in the area of work quality and remuneration - we assigned close to PLN 600 million to that purpose over the course of three years. It should also be emphasized that during the last 4 years Poczta Polska S.A. has paid PLN 3.7 billion as part of civil law fees, social insurance, and State Fund for Rehabilitation of Disabled Persons (PFRON). It is only possible to achieve business goals when customers are assigned top priority. This is why Poczta Polska S.A. has strongly emphasized developing a new service model, moving away from post offices and towards friendly customer service points. In 2014, we already had 200 new structural units offering all Poczta Polska Group services to our customers. Those changes were noticed by the competition and the market and appreciated by our customers. Last year, we also started introducing a sweeping change regarding our approach to remuneration and rewarding employee efficiency. It can now be concluded that, from the perspective of the company’s future, Poczta Polska S.A. has made a huge step towards changing the way of its functioning. After modernising our business offer and after concluding a new Collective Labour Agreement, we are now introducing new solutions for our employees to promote active approach to work and efficiency. Those, in combination with employment under a contract of employment, ensure full social protection for employees. We have successfully developed our financial services in 2014. The consent of the Polish Financial Supervision Authority to creating a life insurance company, which began its activity in 2015, was very important. Poczta Polska S.A. is one of the oldest and largest companies with Polish capital and the largest employer in Poland. We are there every day for millions of Poles, bringing important news to them. Thanks to our postmen and our post offices, we are present in all of Poland. We remain faithful to the values which have ensured our success for many years, including trust, closeness, safety, and reliability. We also introduce innovative solutions so as to keep up with the new reality of digital economy.

Yours sincerely, Jerzy Jóźkowiak – President of the Management Board 4

Annual Report 2014

5

LETTER FROM THE PRESIDENT OF THE MANAGEMENT BOARD

Ladies and Gentlemen, this was a breakthrough year for Poczta Polska S.A. Our strategy proved effective. Poczta Polska S.A., constituting the core of its Group, has a solid basis for remaining a profitable company with the potential to develop even further.

The previous year was very important due to a change of the way in which our customers perceive Poczta Polska S.A. In January 2014, companies competing with Poczta Polska S.A. started rendering postal services to the judiciary sector. We were greatly encouraged by the opinions of our customers. It was our customers who have many times emphasized the positive features of our company - particularly safety and promptness of delivery - which only reinforced our belief that Poczta Polska S.A. is indeed a public trust organisation in Poland. This is a good starting point for further developing the company, making it an institution of strategic importance for the country.

Winning the tender was also a challenge for us in strictly business terms. At the beginning of 2014, we started a programme called “Challenges affecting Poczta Polska development in 2014” which was aimed at remedying for the income of the company lost due to its taking part in the tender. Thanks to the involvement of our employees, we managed to minimise income lost due to the loss of our contract with the Ministry of Justice and it was, among other things, thanks to those efforts that our company achieved gross profits of over PLN 80 million last year. When examining the year 2014 and its substantial impact on the development of Poczta Polska S.A., we should also emphasize one opportunity we managed to seize: the dynamic development of e-commerce in Poland. Major Internet shops and Poles selling their products online make use of our services. More than 60% of Polish e-shops cooperate with Poczta Polska. This is a result of a change regarding our range of products and services and our expanding search for new customers on the market. Our modernized parcel offer, including optimum delivery time, competitive prices, and electronic value-added services, is appreciated by both our customers and the market at large. In June 2014, we activated a special platform (ecommerce.poczta-polska.pl) making comprehensive e-commerce services available to our customers. This reflects the importance of the growing ecommerce market to us. As far as the parcel market is concerned, our strategy is clear: we would like to handle as much of the e-commerce delivery chain as possible and we strive towards becoming one of the three largest service provided in Poland. Thanks to the changes we introduced to our offer and thanks to an adjustment of the company to the market, the position of Poczta Polska S.A. on the market keeps improving faster and more effectively than the average development rate for the market. Last year, our sales increased by 16% in terms of volume - twice as much as the rest of the market. We also received some appreciation as far as the conventional communication market is concerned. Throughout 2014, we have developed a new strategy which we presented at the beginning of 2015. According to that strategy, Poczta Polska Group’s development will largely depend on parcel and courier services. We are actively trying to win customers over: we have concluded 34 thousand contracts with large and small entities. It should be emphasized that the value of the 30 largest contracts concluded with companies and public institutions amounts to a total of PLN 430 million. We find such great performance very satisfying. We are now very competitive in terms of prices and we can quickly

react to what the market needs. From the perspective of our customers, the quality of our services is crucial. In 2014, we continued to make considerable investments in infrastructure and in ensuring prompt delivery. Our sorting stations sport the most modern sorting machines in Europe for sorting letters. From 2011 to 2014, Poczta Polska S.A. has spent over PLN 700 million on investments in property and as capital expenditure. At the same time, we also made investments in the area of work quality and remuneration - we assigned close to PLN 600 million to that purpose over the course of three years. It should also be emphasized that during the last 4 years Poczta Polska S.A. has paid PLN 3.7 billion as part of civil law fees, social insurance, and State Fund for Rehabilitation of Disabled Persons (PFRON). It is only possible to achieve business goals when customers are assigned top priority. This is why Poczta Polska S.A. has strongly emphasized developing a new service model, moving away from post offices and towards friendly customer service points. In 2014, we already had 200 new structural units offering all Poczta Polska Group services to our customers. Those changes were noticed by the competition and the market and appreciated by our customers. Last year, we also started introducing a sweeping change regarding our approach to remuneration and rewarding employee efficiency. It can now be concluded that, from the perspective of the company’s future, Poczta Polska S.A. has made a huge step towards changing the way of its functioning. After modernising our business offer and after concluding a new Collective Labour Agreement, we are now introducing new solutions for our employees to promote active approach to work and efficiency. Those, in combination with employment under a contract of employment, ensure full social protection for employees. We have successfully developed our financial services in 2014. The consent of the Polish Financial Supervision Authority to creating a life insurance company, which began its activity in 2015, was very important. Poczta Polska S.A. is one of the oldest and largest companies with Polish capital and the largest employer in Poland. We are there every day for millions of Poles, bringing important news to them. Thanks to our postmen and our post offices, we are present in all of Poland. We remain faithful to the values which have ensured our success for many years, including trust, closeness, safety, and reliability. We also introduce innovative solutions so as to keep up with the new reality of digital economy.

Yours sincerely, Jerzy Jóźkowiak – President of the Management Board 4

Annual Report 2014

5

Skład Rady Nadzorczej

For Poczta Polska S.A., the year 2014 was a period in which the company effectively strived to remain the leader on the postal market.

CURRENT MEMBERS OF THE SUPERVISORY BOARD, 3rd term of office (since 24 June 2015)

MEMBERS OF THE SUPERVISORY BOARD, 2nd term of office (2014)

JERZY JAN JÓŹKOWIAK President of the Management Board

IRENEUSZ PIECUCH Vice-President of the Management Board

PIOTR MICHALSKI Management Board Member

PAWEŁ WŁOCH Management Board Member

JANUSZ PIOTR WOJTAS Management Board Member

MARIUSZ ZARZYCKI Management Board Member

MANAGEMENT BOARD OF POCZTA POLSKA:

JÓZEF BANACH

MAREK SZCZEPAŃSKI

JERZY JAN JÓŹKOWIAK

President of the Supervisory Board - representative of

President of the Supervisory Board - representative

President of the Management Board since March 2011

the minister of communications

of the minister of communications

EWA SIBRECHT-OŚKA

ARTUR KAWALER

Vice-President of the Management Board since July 2013 - in charge of IT, strategy,

Member of the Supervisory Board - representative of

Vice-President of the Supervisory Board - representative

and international cooperation

the minister of State Treasury

of the minister of public finances

IRENEUSZ PIECUCH

PIOTR MICHALSKI Management Board Member since July 2011 - in charge of accounting and finances

ARTUR KAWALER

KRZYSZTOF MAJEWSKI

Member of the Supervisory Board - representative of

Member of the Supervisory Board - representative

PAWEŁ WŁOCH

the minister of public finances

of the minister of State Treasury

Management Board Member since 2009 - elected by employees of the company,

HALINA BĄK

ADAM WARPAS

Member of the Supervisory Board - representative

Secretary of the Supervisory Board - elected by employees

JANUSZ PIOTR WOJTAS

elected by employees of Poczta Polska S.A.

of Poczta Polska S.A.

Management Board Member since June 2011 - in charge of marketing, product policy,

LESZEK GAWARECKI

HALINA BĄK

Member of the Supervisory Board - representative

Member of the Supervisory Board - elected by employees

MARIUSZ ZARZYCKI

elected by employees of Poczta Polska S.A.

of Poczta Polska S.A.

Management Board Member since February 2011 - in charge of investments,

in charge of service quality and process management

and the sale of postal and financial services

infrastructure, operations, and logistics

6

Annual Report 2014

7

Skład Rady Nadzorczej

For Poczta Polska S.A., the year 2014 was a period in which the company effectively strived to remain the leader on the postal market.

CURRENT MEMBERS OF THE SUPERVISORY BOARD, 3rd term of office (since 24 June 2015)

MEMBERS OF THE SUPERVISORY BOARD, 2nd term of office (2014)

JERZY JAN JÓŹKOWIAK President of the Management Board

IRENEUSZ PIECUCH Vice-President of the Management Board

PIOTR MICHALSKI Management Board Member

PAWEŁ WŁOCH Management Board Member

JANUSZ PIOTR WOJTAS Management Board Member

MARIUSZ ZARZYCKI Management Board Member

MANAGEMENT BOARD OF POCZTA POLSKA:

JÓZEF BANACH

MAREK SZCZEPAŃSKI

JERZY JAN JÓŹKOWIAK

President of the Supervisory Board - representative of

President of the Supervisory Board - representative

President of the Management Board since March 2011

the minister of communications

of the minister of communications

EWA SIBRECHT-OŚKA

ARTUR KAWALER

Vice-President of the Management Board since July 2013 - in charge of IT, strategy,

Member of the Supervisory Board - representative of

Vice-President of the Supervisory Board - representative

and international cooperation

the minister of State Treasury

of the minister of public finances

IRENEUSZ PIECUCH

PIOTR MICHALSKI Management Board Member since July 2011 - in charge of accounting and finances

ARTUR KAWALER

KRZYSZTOF MAJEWSKI

Member of the Supervisory Board - representative of

Member of the Supervisory Board - representative

PAWEŁ WŁOCH

the minister of public finances

of the minister of State Treasury

Management Board Member since 2009 - elected by employees of the company,

HALINA BĄK

ADAM WARPAS

Member of the Supervisory Board - representative

Secretary of the Supervisory Board - elected by employees

JANUSZ PIOTR WOJTAS

elected by employees of Poczta Polska S.A.

of Poczta Polska S.A.

Management Board Member since June 2011 - in charge of marketing, product policy,

LESZEK GAWARECKI

HALINA BĄK

Member of the Supervisory Board - representative

Member of the Supervisory Board - elected by employees

MARIUSZ ZARZYCKI

elected by employees of Poczta Polska S.A.

of Poczta Polska S.A.

Management Board Member since February 2011 - in charge of investments,

in charge of service quality and process management

and the sale of postal and financial services

infrastructure, operations, and logistics

6

Annual Report 2014

7

INTRODUCTION

When you think of someone close

8

Annual Report 2014

to you who is far away and you feel the need to send to them something you cannot deliver yourself - you can count on us.

9

INTRODUCTION

When you think of someone close

8

Annual Report 2014

to you who is far away and you feel the need to send to them something you cannot deliver yourself - you can count on us.

9

INTRODUCTION Brief description of Poczta Polska S.A. The company has been operating in its current legal form since 1 September 2009. The State Treasury is the founder of Poczta Polska S.A. and the owner of all shares. The seat of the company is the capital city of Warsaw. Its share capital amounts to PLN 774 140 000 (in words: seven hundred seventy-four million one hundred forty thousand zlotys) and it is divided into 77 414 000 (in words: seventy-seven million four hundred fourteen) A-series registered shares numbered from A 00000000001 to A 00077414000 with a nominal value of PLN 10.00 (in words: ten zlotys) each. According to the Postal Law Act of 23 November 2012 (Journal of Laws of 29 December 2012, item 1529), Poczta Polska S.A. is the designated operator for rendering universal postal services throughout the entire country. This year, we have proved that we are capable of meeting the high requirements posed by the Office of Electronic Communications and we will remain the designated operator for 10 years from 2016.

Postdata S.A.

Pocztowa Agencja Usług Finansowych S.A.

Poczta Polska Usługi Cyfrowe Sp. z o.o.

Pocztowe Towarzystwo Ubezpieczeń Wzajemnych

Bank Pocztowy SA

Pocztowe Towarzystwo Ubezpieczeń na Życie S.A.

33,33%

100%

100%

51%

100%

100%

100%

74,99%

100%

CO-SUBORDINATE ENTITY

Centrum Operacyjne Sp. z o.o.

DIRECTLY SUBORDINATE ENTITIES

Spółka Dystrybucyjna Banku Pocztowego Sp. z o.o.

Legend

Pocztowe Usługi Finansowe Sp. z o.o.

Poczta Polska S.A. is a network company with the largest network of postal units in Poland, serving private and business customers alike and including post offices and their branches, postal agencies, and postal points.

Post-Tel Sp. z o.o.

In addition to that, the company has the right to issue postage stamps, postcards, and envelopes with imprinted postal fee mark, introduce them into circulation, and withdraw them from circulation.

Poczta Polska S.A. also renders packaged cargo logistics services, cash logistics services, and security services for persons and property. This aspect of its activity includes services such as Pallet Parcel and cash processing (i.e. receiving cash from the customer, counting it and transferring to a bank account of the customer, as well as providing customers with cash). The company also sells commercial goods.

Poczta Polska S.A.

Centrum Rozliczania Ubezpieczeń Sp. z o.o.*

• letters: non-registered (regular letters, postcards), registered (registered letters with their value declared), and parcels, • domestic courier service (Pocztex) and courier service abroad (EMS), • advertising parcels - specifically addressed and not addressed.

Structure of Poczta Polska Group, indicating respective portions of the share capital

Pocztylion Arka PTE S.A.

The basic object of Poczta Polska S.A. activity is rendering postal services consisting in accepting, transferring, and delivering letters and parcels both in Poland and abroad, including:

Financial services are another important type of services rendered by the company. Poczta Polska S.A. acts as an intermediary in transferring payments made by its customers to bank accounts and in disbursing pension and allowance funds from the Social Insurance Institution (ZUS) and the Agricultural Social Insurance Fund (KRUS). Poczta Polska S.A. delivers and disburses funds submitted to it in the form of cash transfers and transfers money to personal bank accounts of beneficiaries. The company, in cooperation with other companies from Poczta Polska Group, acts as an intermediary in rendering banking and insurance services. As far as financial services are concerned, the company offers standard money transfers and e-transfers.

100%

100%

100%

INDIRECTLY SUBORDINATE ENTITIES

* change of name from Pocztowe Życie Sp. z o.o. to Centrum Rozliczania Ubezpieczeń Sp. z o.o. registered on 26 May 2015.

10

Annual Report 2014

11

INTRODUCTION Brief description of Poczta Polska S.A. The company has been operating in its current legal form since 1 September 2009. The State Treasury is the founder of Poczta Polska S.A. and the owner of all shares. The seat of the company is the capital city of Warsaw. Its share capital amounts to PLN 774 140 000 (in words: seven hundred seventy-four million one hundred forty thousand zlotys) and it is divided into 77 414 000 (in words: seventy-seven million four hundred fourteen) A-series registered shares numbered from A 00000000001 to A 00077414000 with a nominal value of PLN 10.00 (in words: ten zlotys) each. According to the Postal Law Act of 23 November 2012 (Journal of Laws of 29 December 2012, item 1529), Poczta Polska S.A. is the designated operator for rendering universal postal services throughout the entire country. This year, we have proved that we are capable of meeting the high requirements posed by the Office of Electronic Communications and we will remain the designated operator for 10 years from 2016.

Postdata S.A.

Pocztowa Agencja Usług Finansowych S.A.

Poczta Polska Usługi Cyfrowe Sp. z o.o.

Pocztowe Towarzystwo Ubezpieczeń Wzajemnych

Bank Pocztowy SA

Pocztowe Towarzystwo Ubezpieczeń na Życie S.A.

33,33%

100%

100%

51%

100%

100%

100%

74,99%

100%

CO-SUBORDINATE ENTITY

Centrum Operacyjne Sp. z o.o.

DIRECTLY SUBORDINATE ENTITIES

Spółka Dystrybucyjna Banku Pocztowego Sp. z o.o.

Legend

Pocztowe Usługi Finansowe Sp. z o.o.

Poczta Polska S.A. is a network company with the largest network of postal units in Poland, serving private and business customers alike and including post offices and their branches, postal agencies, and postal points.

Post-Tel Sp. z o.o.

In addition to that, the company has the right to issue postage stamps, postcards, and envelopes with imprinted postal fee mark, introduce them into circulation, and withdraw them from circulation.

Poczta Polska S.A. also renders packaged cargo logistics services, cash logistics services, and security services for persons and property. This aspect of its activity includes services such as Pallet Parcel and cash processing (i.e. receiving cash from the customer, counting it and transferring to a bank account of the customer, as well as providing customers with cash). The company also sells commercial goods.

Poczta Polska S.A.

Centrum Rozliczania Ubezpieczeń Sp. z o.o.*

• letters: non-registered (regular letters, postcards), registered (registered letters with their value declared), and parcels, • domestic courier service (Pocztex) and courier service abroad (EMS), • advertising parcels - specifically addressed and not addressed.

Structure of Poczta Polska Group, indicating respective portions of the share capital

Pocztylion Arka PTE S.A.

The basic object of Poczta Polska S.A. activity is rendering postal services consisting in accepting, transferring, and delivering letters and parcels both in Poland and abroad, including:

Financial services are another important type of services rendered by the company. Poczta Polska S.A. acts as an intermediary in transferring payments made by its customers to bank accounts and in disbursing pension and allowance funds from the Social Insurance Institution (ZUS) and the Agricultural Social Insurance Fund (KRUS). Poczta Polska S.A. delivers and disburses funds submitted to it in the form of cash transfers and transfers money to personal bank accounts of beneficiaries. The company, in cooperation with other companies from Poczta Polska Group, acts as an intermediary in rendering banking and insurance services. As far as financial services are concerned, the company offers standard money transfers and e-transfers.

100%

100%

100%

INDIRECTLY SUBORDINATE ENTITIES

* change of name from Pocztowe Życie Sp. z o.o. to Centrum Rozliczania Ubezpieczeń Sp. z o.o. registered on 26 May 2015.

10

Annual Report 2014

11

Corporate mission, vision, and values

Summary of 2014

In 2014, the rapid development of online commerce was a chance for Poczta Polska to become more commercially active and to develop its existing logistical and product potential. Taking advantage of such tendencies on the market, Poczta Polska S.A. intensified its efforts regarding courier and parcel services and made such efforts more effective which, in turn, resulted in an increase of its share of the market and in procuring new business and private customers. A special parcel meter, measuring the number of parcels handled by Poczta Polska, indicated that the number of parcels that went through Poczta Polska sorting offices in December 2014 nearly doubled the parcel volume in preceding months.

Mission Poczta Polska ensuring trust, closeness, and safety. Delivering satisfaction.

Vision By 2020, Poczta Polska S.A. will have become one of the three largest distributors of parcels sent by business customers, the largest integrator of communication, financial, and administrative services rendered to private customers, and it will have been listed on the Stock Exchange.

Values Making the vision of Poczta Polska come true requires that all employees adopt an attitude focusing on the company’s success and act in line with the following five core values of the Group:

RELIABILITY

INITIATIVE

TRUST

EFFICIENCY

MASTERY

we treat one another and our company fairly

we focus on finding solutions, not people to be blamed

we treat customers the way we would like to be treated

our actions are to be effective, smooth, and simple

being responsible for implementing changes and for employee development is a part of leadership

For Poczta Polska S.A., the year 2014 was a period in which the company effectively strived to remain the leader on the postal market. Last year, characteristic tendencies affecting the environment of Poczta Polska included price pressure, shrinking of the postal services market as a result of quick e-substitution, and an increase of the number of parcels sent due to the dynamic development of e-commerce. The most important challenge the company faced was the need to find new sources of income and to reduce the costs incurred as a result of not winning the tender for providing services to the judiciary sector. As a result of changes to the market situation, a programme called “Challenges affecting Poczta Polska development in 2014” was started at the beginning of 2014. It was aimed at achieving the originally planned financial performance of the company.

In June, an e-commerce platform especially for handling online trading was activated. Thanks to it, sellers and buyers are able to make use of a comprehensive range of products and services offered by Poczta Polska Group. The integrated umbrella offer of Poczta Polska includes an extensive selection of logistical, banking, insurance, and digital services. A programme for re-vitalising post offices started in 2013 was intensively developed also in 2014. A conversion of post offices into modern and customerfriendly sales points offering the services of Poczta Polska Group resulted in an improvement of their sales performance. In 2014, further post offices were revitalised and a now way of displaying commercial goods for sale was introduced, resulting in an increase in retail sales. Having developed a network of sales points for providing financial services, Poczta Polska S.A. had over 500 Postal Financial Areas offering a wide range of banking and insurance services from the entire Poczta Polska Group. Striving to ensure a very high standard of services related to conventional correspondence and the handling of parcels, the company invested in the development of new access channels for its online products and services. Year 2014 was a time of dynamic development of the Envelo platform offering digital postal services and of digitizing communication with customers. The Envelo platform is the most complex tool in all Europe for using digital services. An example of such services is sending a letter via registered electronic mail.

The programme included initiatives aimed at increasing revenues and reducing costs.

12

Annual Report 2014

13

Corporate mission, vision, and values

Summary of 2014

In 2014, the rapid development of online commerce was a chance for Poczta Polska to become more commercially active and to develop its existing logistical and product potential. Taking advantage of such tendencies on the market, Poczta Polska S.A. intensified its efforts regarding courier and parcel services and made such efforts more effective which, in turn, resulted in an increase of its share of the market and in procuring new business and private customers. A special parcel meter, measuring the number of parcels handled by Poczta Polska, indicated that the number of parcels that went through Poczta Polska sorting offices in December 2014 nearly doubled the parcel volume in preceding months.

Mission Poczta Polska ensuring trust, closeness, and safety. Delivering satisfaction.

Vision By 2020, Poczta Polska S.A. will have become one of the three largest distributors of parcels sent by business customers, the largest integrator of communication, financial, and administrative services rendered to private customers, and it will have been listed on the Stock Exchange.

Values Making the vision of Poczta Polska come true requires that all employees adopt an attitude focusing on the company’s success and act in line with the following five core values of the Group:

RELIABILITY

INITIATIVE

TRUST

EFFICIENCY

MASTERY

we treat one another and our company fairly

we focus on finding solutions, not people to be blamed

we treat customers the way we would like to be treated

our actions are to be effective, smooth, and simple

being responsible for implementing changes and for employee development is a part of leadership

For Poczta Polska S.A., the year 2014 was a period in which the company effectively strived to remain the leader on the postal market. Last year, characteristic tendencies affecting the environment of Poczta Polska included price pressure, shrinking of the postal services market as a result of quick e-substitution, and an increase of the number of parcels sent due to the dynamic development of e-commerce. The most important challenge the company faced was the need to find new sources of income and to reduce the costs incurred as a result of not winning the tender for providing services to the judiciary sector. As a result of changes to the market situation, a programme called “Challenges affecting Poczta Polska development in 2014” was started at the beginning of 2014. It was aimed at achieving the originally planned financial performance of the company.

In June, an e-commerce platform especially for handling online trading was activated. Thanks to it, sellers and buyers are able to make use of a comprehensive range of products and services offered by Poczta Polska Group. The integrated umbrella offer of Poczta Polska includes an extensive selection of logistical, banking, insurance, and digital services. A programme for re-vitalising post offices started in 2013 was intensively developed also in 2014. A conversion of post offices into modern and customerfriendly sales points offering the services of Poczta Polska Group resulted in an improvement of their sales performance. In 2014, further post offices were revitalised and a now way of displaying commercial goods for sale was introduced, resulting in an increase in retail sales. Having developed a network of sales points for providing financial services, Poczta Polska S.A. had over 500 Postal Financial Areas offering a wide range of banking and insurance services from the entire Poczta Polska Group. Striving to ensure a very high standard of services related to conventional correspondence and the handling of parcels, the company invested in the development of new access channels for its online products and services. Year 2014 was a time of dynamic development of the Envelo platform offering digital postal services and of digitizing communication with customers. The Envelo platform is the most complex tool in all Europe for using digital services. An example of such services is sending a letter via registered electronic mail.

The programme included initiatives aimed at increasing revenues and reducing costs.

12

Annual Report 2014

13

Calendar of the most important events Last year, Poczta Polska S.A. activated the first of its e-

On 18 March 2015, the new Collective Labour Agreement

government services as a test/pilot - a programme for

and new principles for awarding bonuses were signed.

Trusted Profile verification. This initiative has

Both parties to said negotiations appreciated the fact that

demonstrated that the company, as a public trust

Poczta Polska S.A., while remaining the largest Polish

institution with a commonly available network of offices,

employer, is a company employing people on the basis of

guaranteeing safety and reliability of delivery, is the

contracts of employment. This is a unique situation as far

obvious choice of partner as far as handling

as the Polish market of postal services is concerned as

communication between citizens and the state is

employment under other types of other civil law

concerned.

agreements is more common. The new Collective Labour

Operating on a liberalized market, Poczta Polska S.A. actively sought new business customers and strived to

Taking dynamic changes affecting the business

retain its current customers in 2014. As a result of such

environment of Poczta Polska S.A. into account, new

activity, the company won several tenders and acquired

strategic bases defining the future of the entire Poczta

new customers. The benefits reaped by

Polska Group were developed. As part of the process, in

Poczta Polska S.A. from only the 30 largest contracts

which experts from the entire Poczta Polska Group and

concluded during that period amounted to PLN 430

representatives of the most important customers of the

million. Said contracts included contracts with major

company were involved, Poczta Polska Group Vision until

banks, telecommunication companies, insurers, and

2020 was accepted.

public institutions. One of the most remarkable successes was the conclusion of a three-year agreement for handling correspondence of the Social Insurance Institution (ZUS), worth over PLN 210 million, and the conclusion of an agreement with PGE Obrót. Poczta

proposal it made in cooperation with Poczta Polska Usługi

Poczta Polska S.A. will have to face, indicates that it is

Cyfrowe.

possible to further improve the profitability of the

600 new vehicles to its car fleet.

2014 was a time of challenges, growing market pressure and growing customer expectations for Poczta Polska. In spite of the continuous shrinking of the letter market over the course of the last couple of years and in spite of price pressure increasing with every passing year, Poczta Polska S.A. managed to retain its leading position

replacement form important elements of the programme

on the postal market.

improving efficiency in that area and enhancing the promptness and quality of services rendered.

This was possible thanks to systematic implementation of developmental and optimisation activities following from the company’s strategy, performance of the

In the second half of 2014, negotiations with social

Developmental Challenges programme, and involvement

partners regarding the new Collective Labour Agreement

and hard, diligent work of all employees. Such activity

and new principles for awarding bonuses started. Those

made it possible to maintain the current level of

talks and negotiations were aimed at ensuring stable

profitability and financial solvency and to perform better

employment conditions for employees while at the same

in financial terms than in 2013.

time guaranteeing that the company remains profitable.

Annual Report 2014

The Parcel for Ukraine project started For one month, it was possible for Poles to send, free-of-charge, parcels with food and clothes to the people of Ukraine who needed it. More than 25 thousand of such parcels were sent.

02

01 March

April

Poczta Polska funded paid apprenticeship as part of the “Win an Apprenticeship” (”Grasz o staż”) programme Poczta Polska has, for the third time, accepted trainees for its sales, marketing, legal, strategy, HR, PR, financial, and process departments. The company took on 23 trainees and was the largest sponsor of apprenticeship as part of the programme.

100 thousand customers used the electronic advice note service All people who opted to make use of this solution received, via e-mail or SMS, a notification of their parcel being ready for receipt, including parcel number and address of the post office where it is to be received.

Poczta Polska - the most popular company on the parcel and courier services market According to research conducted by ABC Rynek i Opinia, Poczta Polska was the most recognizable operator on the CEP (courier, express, and parcel) market and the most frequently chosen provider of such services.

New products: neoinvoice and neobills Neoinvoice makes sending and receiving electronic invoices easy. The neoinvoice service includes a professional system for entrepreneurs for sending electronic and hard-copy invoices. It is up to their customers to choose the format of their invoices. Printing and sending are automatised.

company and Poczta Polska Group at large. The year

The introduction of new sorting machines and fleet for modernising postal logistics which is aimed at

Opening of a new Poczta Polska website Contemporary visual materials and simpler navigation are the distinguishing features of the new website of Poczta Polska. It was also adjusted to mobile devices.

courier service market. The New Strategy, while setting the essential directions

its sorting stations in Poland and introduced more than

Poczta Polska started widespread insurance policy sales under its own brand Postal Insurance (Ubezpieczenia Pocztowe) was the brand name under which Poczta Polska started to sell transport insurance policies - civil liability, comprehensive cover, and casualty insurance - and other property insurance policies within its own network.

with a key long-term development area - the parcel and

for changes and defining the challenges which

activated 8 modern sorting machines for sorting letters in

The option to purchase insurance from postmen Poczta Polska and Pocztowe Towarzystwo Ubezpieczeń Wzajemnych started a pilot programme for selling transport civil liability insurance policies using smartphones.

the source of strategic priorities and objectives connected

Polska Group also managed to win back an important

logistical system were made in 2014. Poczta Polska S.A.

February

The newly defined mission and vision of the Group are

business customer thanks to the attractive and innovative

Like in the previous years, major investments in the

14

Agreement was registered at the beginning of July 2015.

January

More than 2 000 people took part in an educational initiative under the name of “Become independent!” (”Usamodzielnij się!”) Poczta Polska became a partner of a campaign aimed at helping young people to take control over their professional career. Experts of the company presented opportunities related to pursuing one’s own business when one is a young person, e.g. as part of e-commerce.

03

The neobill service makes it possible to receive electronic bills from selected issuers. You just choose your supplier from the list and subscribe for bills. Both e-services were made available as part of the Envelo platform.

04 15

Calendar of the most important events Last year, Poczta Polska S.A. activated the first of its e-

On 18 March 2015, the new Collective Labour Agreement

government services as a test/pilot - a programme for

and new principles for awarding bonuses were signed.

Trusted Profile verification. This initiative has

Both parties to said negotiations appreciated the fact that

demonstrated that the company, as a public trust

Poczta Polska S.A., while remaining the largest Polish

institution with a commonly available network of offices,

employer, is a company employing people on the basis of

guaranteeing safety and reliability of delivery, is the

contracts of employment. This is a unique situation as far

obvious choice of partner as far as handling

as the Polish market of postal services is concerned as

communication between citizens and the state is

employment under other types of other civil law

concerned.

agreements is more common. The new Collective Labour

Operating on a liberalized market, Poczta Polska S.A. actively sought new business customers and strived to

Taking dynamic changes affecting the business

retain its current customers in 2014. As a result of such

environment of Poczta Polska S.A. into account, new

activity, the company won several tenders and acquired

strategic bases defining the future of the entire Poczta

new customers. The benefits reaped by

Polska Group were developed. As part of the process, in

Poczta Polska S.A. from only the 30 largest contracts

which experts from the entire Poczta Polska Group and

concluded during that period amounted to PLN 430

representatives of the most important customers of the

million. Said contracts included contracts with major

company were involved, Poczta Polska Group Vision until

banks, telecommunication companies, insurers, and

2020 was accepted.

public institutions. One of the most remarkable successes was the conclusion of a three-year agreement for handling correspondence of the Social Insurance Institution (ZUS), worth over PLN 210 million, and the conclusion of an agreement with PGE Obrót. Poczta

proposal it made in cooperation with Poczta Polska Usługi

Poczta Polska S.A. will have to face, indicates that it is

Cyfrowe.

possible to further improve the profitability of the

600 new vehicles to its car fleet.

2014 was a time of challenges, growing market pressure and growing customer expectations for Poczta Polska. In spite of the continuous shrinking of the letter market over the course of the last couple of years and in spite of price pressure increasing with every passing year, Poczta Polska S.A. managed to retain its leading position

replacement form important elements of the programme

on the postal market.

improving efficiency in that area and enhancing the promptness and quality of services rendered.

This was possible thanks to systematic implementation of developmental and optimisation activities following from the company’s strategy, performance of the

In the second half of 2014, negotiations with social

Developmental Challenges programme, and involvement

partners regarding the new Collective Labour Agreement

and hard, diligent work of all employees. Such activity

and new principles for awarding bonuses started. Those

made it possible to maintain the current level of

talks and negotiations were aimed at ensuring stable

profitability and financial solvency and to perform better

employment conditions for employees while at the same

in financial terms than in 2013.

time guaranteeing that the company remains profitable.

Annual Report 2014

The Parcel for Ukraine project started For one month, it was possible for Poles to send, free-of-charge, parcels with food and clothes to the people of Ukraine who needed it. More than 25 thousand of such parcels were sent.

02

01 March

April

Poczta Polska funded paid apprenticeship as part of the “Win an Apprenticeship” (”Grasz o staż”) programme Poczta Polska has, for the third time, accepted trainees for its sales, marketing, legal, strategy, HR, PR, financial, and process departments. The company took on 23 trainees and was the largest sponsor of apprenticeship as part of the programme.

100 thousand customers used the electronic advice note service All people who opted to make use of this solution received, via e-mail or SMS, a notification of their parcel being ready for receipt, including parcel number and address of the post office where it is to be received.

Poczta Polska - the most popular company on the parcel and courier services market According to research conducted by ABC Rynek i Opinia, Poczta Polska was the most recognizable operator on the CEP (courier, express, and parcel) market and the most frequently chosen provider of such services.

New products: neoinvoice and neobills Neoinvoice makes sending and receiving electronic invoices easy. The neoinvoice service includes a professional system for entrepreneurs for sending electronic and hard-copy invoices. It is up to their customers to choose the format of their invoices. Printing and sending are automatised.

company and Poczta Polska Group at large. The year

The introduction of new sorting machines and fleet for modernising postal logistics which is aimed at

Opening of a new Poczta Polska website Contemporary visual materials and simpler navigation are the distinguishing features of the new website of Poczta Polska. It was also adjusted to mobile devices.

courier service market. The New Strategy, while setting the essential directions

its sorting stations in Poland and introduced more than

Poczta Polska started widespread insurance policy sales under its own brand Postal Insurance (Ubezpieczenia Pocztowe) was the brand name under which Poczta Polska started to sell transport insurance policies - civil liability, comprehensive cover, and casualty insurance - and other property insurance policies within its own network.

with a key long-term development area - the parcel and

for changes and defining the challenges which

activated 8 modern sorting machines for sorting letters in

The option to purchase insurance from postmen Poczta Polska and Pocztowe Towarzystwo Ubezpieczeń Wzajemnych started a pilot programme for selling transport civil liability insurance policies using smartphones.

the source of strategic priorities and objectives connected

Polska Group also managed to win back an important

logistical system were made in 2014. Poczta Polska S.A.

February

The newly defined mission and vision of the Group are

business customer thanks to the attractive and innovative

Like in the previous years, major investments in the

14

Agreement was registered at the beginning of July 2015.

January

More than 2 000 people took part in an educational initiative under the name of “Become independent!” (”Usamodzielnij się!”) Poczta Polska became a partner of a campaign aimed at helping young people to take control over their professional career. Experts of the company presented opportunities related to pursuing one’s own business when one is a young person, e.g. as part of e-commerce.

03

The neobill service makes it possible to receive electronic bills from selected issuers. You just choose your supplier from the list and subscribe for bills. Both e-services were made available as part of the Envelo platform.

04 15

May

June

September

October

More than 200 thousand customers used the MINI Parcel service Guaranteed delivery date, declared parcel value up to PLN 100 included in its price, and appealing, ecological packaging are only some of the advantage of this product, making it very popular.

The ecommerce.poczta-polska.pl website was activated Poczta Polska offered comprehensive service to entrepreneurs pursuing business online. From June onwards, they can choose parcel type, commission the handling of returns, learn more about the financial and insurance services available, or send a digital neoinvoice - all in one place.

Poczta Polska started cooperation with Credit Information Bureau (BIK) More than 800 offices of Poczta Polska Group made it possible for Poles to create a BIK account and confirm financial credibility.

Poczta Polska joined e-Commerce Poland (Izba Gospodarki Elektronicznej) Poczta Polska joined e-Commerce Poland, an organisation analysing projects meant for the business sector and for consumers. One of its areas of interest is e-commerce - a crucial element of Poczta Polska’s development. Poczta Polska - a patron of the “e-Business Gazelles” contest Poczta Polska granted awards to the most actively developing Polish e-businesses. Nearly 300 companies from all across Poland received the title of e-Business Gazelle.

100 offices with new image The hundredth modern-type post office of Poczta Polska was opened to the general Public in Olsztyn. It sports a self-service 24/7 Area (”Strefa 24”) and makes a wide range of postal and financial services available to customers.

05

09

10

July

August

November

December

GLOBAL Express – new Poczta Polska service abroad Poczta Polska introduced a service for Internet shops and companies sending parcels of up to 2 kg abroad.

The Commerce Brothers (”Bracia Komersowie”) a part of Poczta Polska advertising campaign Poczta Polska started an advertising campaign targeted at the e-commerce sector. Its core was formed by advertising videos presenting the exploits of owners of an Internet shop who, thanks to solutions offered by Poczta Polska, were able to meet even the most extraordinary requests from their customers.

Poczta Polska won a tender for handling the correspondence of the Social Insurance Institution (ZUS) ZUS chose Poczta Polska for handling its domestic and foreign correspondence from 2015 until 2017. The proposal made by Poczta Polska proved the most beneficial and its value was PLN 209 million.

The first e-government service Poczta Polska started a pilot programme for Trusted Profile verification at its selected offices. Trusted Profile is a free-of-charge method of citizen verification as part of e-government systems.

One million registered parcels with SMS delivery notification Counting from the beginning of 2014, Poles received one million electronic confirmation of delivery regarding parcels they sent via registered mail. Envelo for Windows Phone Windows Phone users were granted access to all functions of the Envelo platform via a mobile application.

07 16

06

Annual Report 2014

Apprenticeship if Poczta Polska for young people from children’s homes and foster families Trainees could see for themselves what it means to work at a post office. The objective of the programme was to make it possible for young people from children’s homes and foster families to start work. The number of parcels increased by more than 14% Postal Barometer of Poczta Polska indicated that Poles sent 14.24% more packages in the second quarter of 2014 than throughout the corresponding period in 2013.

08

Poczta Polska - a patron of“Become an Olympian” This contest was aimed at promoting Olympic ideas among the youth. The main prize was a trip to the Olympic Games in Rio de Janeiro. 20% more packages The Postal Barometer indicated that Poles send 20% more packages from July to September 2014 than during the same period in 2013.

11

The Commerce Brothers - more than a million viewings on YouTube Videos presenting the adventures of Eugene Commerce and Eric Commerce were viewed more than one million times. The campaign promoted Poczta Polska’s activity facilitating e-commerce. Poles beat an online shopping record In the week preceding Christmas, the indications of Poczta Polska Holiday Postal Barometer reached 190.86%. Almost twice the usual number of packages went through sorting offices of Poczta Polska. Introduction of new strategy and vision for Poczta Polska Group until 2020.

12 17

May

June

September

October

More than 200 thousand customers used the MINI Parcel service Guaranteed delivery date, declared parcel value up to PLN 100 included in its price, and appealing, ecological packaging are only some of the advantage of this product, making it very popular.

The ecommerce.poczta-polska.pl website was activated Poczta Polska offered comprehensive service to entrepreneurs pursuing business online. From June onwards, they can choose parcel type, commission the handling of returns, learn more about the financial and insurance services available, or send a digital neoinvoice - all in one place.

Poczta Polska started cooperation with Credit Information Bureau (BIK) More than 800 offices of Poczta Polska Group made it possible for Poles to create a BIK account and confirm financial credibility.

Poczta Polska joined e-Commerce Poland (Izba Gospodarki Elektronicznej) Poczta Polska joined e-Commerce Poland, an organisation analysing projects meant for the business sector and for consumers. One of its areas of interest is e-commerce - a crucial element of Poczta Polska’s development. Poczta Polska - a patron of the “e-Business Gazelles” contest Poczta Polska granted awards to the most actively developing Polish e-businesses. Nearly 300 companies from all across Poland received the title of e-Business Gazelle.

100 offices with new image The hundredth modern-type post office of Poczta Polska was opened to the general Public in Olsztyn. It sports a self-service 24/7 Area (”Strefa 24”) and makes a wide range of postal and financial services available to customers.

05

09

10

July

August

November

December

GLOBAL Express – new Poczta Polska service abroad Poczta Polska introduced a service for Internet shops and companies sending parcels of up to 2 kg abroad.

The Commerce Brothers (”Bracia Komersowie”) a part of Poczta Polska advertising campaign Poczta Polska started an advertising campaign targeted at the e-commerce sector. Its core was formed by advertising videos presenting the exploits of owners of an Internet shop who, thanks to solutions offered by Poczta Polska, were able to meet even the most extraordinary requests from their customers.

Poczta Polska won a tender for handling the correspondence of the Social Insurance Institution (ZUS) ZUS chose Poczta Polska for handling its domestic and foreign correspondence from 2015 until 2017. The proposal made by Poczta Polska proved the most beneficial and its value was PLN 209 million.

The first e-government service Poczta Polska started a pilot programme for Trusted Profile verification at its selected offices. Trusted Profile is a free-of-charge method of citizen verification as part of e-government systems.

One million registered parcels with SMS delivery notification Counting from the beginning of 2014, Poles received one million electronic confirmation of delivery regarding parcels they sent via registered mail. Envelo for Windows Phone Windows Phone users were granted access to all functions of the Envelo platform via a mobile application.

07 16

06

Annual Report 2014

Apprenticeship if Poczta Polska for young people from children’s homes and foster families Trainees could see for themselves what it means to work at a post office. The objective of the programme was to make it possible for young people from children’s homes and foster families to start work. The number of parcels increased by more than 14% Postal Barometer of Poczta Polska indicated that Poles sent 14.24% more packages in the second quarter of 2014 than throughout the corresponding period in 2013.

08

Poczta Polska - a patron of“Become an Olympian” This contest was aimed at promoting Olympic ideas among the youth. The main prize was a trip to the Olympic Games in Rio de Janeiro. 20% more packages The Postal Barometer indicated that Poles send 20% more packages from July to September 2014 than during the same period in 2013.

11

The Commerce Brothers - more than a million viewings on YouTube Videos presenting the adventures of Eugene Commerce and Eric Commerce were viewed more than one million times. The campaign promoted Poczta Polska’s activity facilitating e-commerce. Poles beat an online shopping record In the week preceding Christmas, the indications of Poczta Polska Holiday Postal Barometer reached 190.86%. Almost twice the usual number of packages went through sorting offices of Poczta Polska. Introduction of new strategy and vision for Poczta Polska Group until 2020.

12 17

Awards and distinctions

In 2014, the activity of Poczta Polska S.A. received recognition in the form of prizes and distinctions.

Super Business Award (Laur Super Biznesu)

In 2014, the actions of Poczta Polska regarding innovative services, philately, logistics, promotional activities, and charitable activities were appreciated with awards and distinctions.

In spring, “Envelo,” a brand of Poczta Polska S.A., received the “Market Leader in Innovation 2014” (”Rynkowy Lider Innowacji 2014”) title. It won the Grand Prix close to the end of 2014.

18

Annual Report 2014

Effie Awards statuette

This distinction is awarded to companies carrying out innovative investments, introducing new products or services onto the Polish market, making use of cuttingedge IT technologies, cooperating with the science and technical sector, and respecting the principles of sustainable development. As a company particularly beneficial to Polish economy and one that stimulates the development of Polish entrepreneurship, Poczta Polska S.A., as part of the Ekomers2014 contest in the “best product/service facilitating shop logistics” category, was awarded the Super Business Award in the Innovation category.

“455 years of Poczta Polska” stamp

Logistical Operator 2014 distinction

In June 2014, Poczta Polska received a distinction as part of the Golden Arrow Contest for its marketing campaign called “Holiday Package of Benefits” (”Świąteczna Paczka Korzyści”) and, in October, the company received the prestigious Effie Awards bronze statuette. A mobile application of Poczta Polska was nominated for Mobile Trends Awards.

Poczta Polska S.A. was also appreciated for developing its “Pallet Parcel” service and for extending its offer of logistical services.

In July 2014, a stamp called “World Post Day - 455 years of Poczta Polska” received the “Most Beautiful Postal Stamp” title as part of the 44th International Philatelic Art Competition in Asiago (Italy) and, in October 2014, it won the third prize in the “most beautiful postal stamp in the world” category as part of the NexoFil contest in Spain.

The award committee of the “Logistical Operator 2014” research programme awarded a special distinction in the “Dynamic entry onto the domestic packaged cargo market” category to Poczta Polska S.A. The company received a special award from the director of Caritas Polska - Ubi Caritas - in recognition of its extraordinary involvement and dedication to helping those in need for its “Parcel for Ukraine” initiative as part of which more than 28 000 parcels were shipped.

19

Awards and distinctions

In 2014, the activity of Poczta Polska S.A. received recognition in the form of prizes and distinctions.

Super Business Award (Laur Super Biznesu)

In 2014, the actions of Poczta Polska regarding innovative services, philately, logistics, promotional activities, and charitable activities were appreciated with awards and distinctions.

In spring, “Envelo,” a brand of Poczta Polska S.A., received the “Market Leader in Innovation 2014” (”Rynkowy Lider Innowacji 2014”) title. It won the Grand Prix close to the end of 2014.

18

Annual Report 2014

Effie Awards statuette

This distinction is awarded to companies carrying out innovative investments, introducing new products or services onto the Polish market, making use of cuttingedge IT technologies, cooperating with the science and technical sector, and respecting the principles of sustainable development. As a company particularly beneficial to Polish economy and one that stimulates the development of Polish entrepreneurship, Poczta Polska S.A., as part of the Ekomers2014 contest in the “best product/service facilitating shop logistics” category, was awarded the Super Business Award in the Innovation category.

“455 years of Poczta Polska” stamp

Logistical Operator 2014 distinction

In June 2014, Poczta Polska received a distinction as part of the Golden Arrow Contest for its marketing campaign called “Holiday Package of Benefits” (”Świąteczna Paczka Korzyści”) and, in October, the company received the prestigious Effie Awards bronze statuette. A mobile application of Poczta Polska was nominated for Mobile Trends Awards.

Poczta Polska S.A. was also appreciated for developing its “Pallet Parcel” service and for extending its offer of logistical services.

In July 2014, a stamp called “World Post Day - 455 years of Poczta Polska” received the “Most Beautiful Postal Stamp” title as part of the 44th International Philatelic Art Competition in Asiago (Italy) and, in October 2014, it won the third prize in the “most beautiful postal stamp in the world” category as part of the NexoFil contest in Spain.

The award committee of the “Logistical Operator 2014” research programme awarded a special distinction in the “Dynamic entry onto the domestic packaged cargo market” category to Poczta Polska S.A. The company received a special award from the director of Caritas Polska - Ubi Caritas - in recognition of its extraordinary involvement and dedication to helping those in need for its “Parcel for Ukraine” initiative as part of which more than 28 000 parcels were shipped.

19

EXTERNAL FACTORS AFFECTING THE FUNCTIONING OF POCZTA POLSKA IN 2014 20

Annual Report 2014

This looks like just cardboard on the outside. A cardboard box. But it’s the inside that matters! You put your heart into it. A gift from the bottom of your heart to which we add our professionalism and years of experience.

21

EXTERNAL FACTORS AFFECTING THE FUNCTIONING OF POCZTA POLSKA IN 2014 20

Annual Report 2014

This looks like just cardboard on the outside. A cardboard box. But it’s the inside that matters! You put your heart into it. A gift from the bottom of your heart to which we add our professionalism and years of experience.

21

EXTERNAL FACTORS AFFECTING THE FUNCTIONING OF POCZTA POLSKA IN 2014 Basic economic tendencies In an age of progressing economic globalization, Polish companies have to face not only local uncertainties on macro- and micro-economic level but also changes regarding the situation on the global and European levels. Rapid technological changes and globalisation render local markets and the world’s economy unstable. Such changes also affect the economic development of particular countries.

Situation of the postal services sector According to GUS6), in 2014, more than 74% of all Polish households had access to the Internet and more than 25% of all Poles use smartphones7). This contributed to growing e-substitution (replacement of conventional services with digital services) and, at the same time, to dynamic development of Internet trading - the value of the e-commerce market in Poland. in 2014 increased by 15% in comparison to 2013 and amounted to more than PLN 27 billion8).

As of now, the GDP dynamics in Europe is low. When compared to other countries of the European Union, Polish GDP continues to steadily increase. According to preliminary data from the Central Statistical Office of Poland (GUS), Polish GDP increased by 3.4%1) in 2014 while the average increase of GDP in countries of the EU was 1.3%2). There were two factors facilitating the economic development of Poland: a drop of the unemployment rate to 11.5% and an increase of monthly gross remuneration by 3.4% in comparison with the preceding year3). Low interest rates had had a significant influence on the economic situation within the European Union. In 2014, several reductions of interest rates were effected by the Monetary Policy Council (RPP) in 2014, lowering them to 2.00% (reference rate)4) by the end of 2014. Current and expected changes regarding interest rates are closely related to the level of inflation of the prices of goods and services in Poland which, according to GUS, amounted to 0% in 2014 and even reached negative values in the last months of that year5).

In the period from 2008 to 2013, Italian postal services reported a decrease of the number of conventional parcels by 39%9), Spanish mail service - by nearly 30%10), and British postal services - by 14%11). A compilation of data from 19 postal operators from around the world (including Scandinavian, American, German, New Zealand, Swiss, Japanese, and other operators) for the period from 2007 to 2012 indicates that the volume of conventional correspondence has decreased by circa 23% (CAGR 5%)12). Postal operators, reacting to market tendencies, introduce innovative solutions and value-added services to their basic offer consisting of distributing letters and parcels, logistical services, and financial services which remain their main source of income. They also offer a number of public services, both digital and conventional, as a trusted third party and in cooperation with public administration bodies.

1) 2) 3)

Analyses of market tendencies indicate that digital technologies develop intensively, that usage of mobile devices increases, and that the need for multi-channel access to services meeting the needs of customers pertaining to mobility, multi-channel communication and practical, everyday solutions increases.

22

Annual Report 2014

The postal market is one of the fastest-changing of all areas of economy. The most important tendency transforming the postal services sector concerns the very model of correspondence, moving away from conventional mail towards digital communication, and the development of the domestic e-commerce and crossborder sectors. Decreasing number of conventional parcels is a worldwide tendency.

4) 5) 6) 7) 8)

source: GUS data, http://stat.gov.pl, data as at 17.04.2015 employment and remuneration as part of domestic economy in 2014 source: data based on Inflation Report (Raport inflacji) of NBP, March 2015 source: data based on Inflation Report (Raport inflacji) of NBP, March 2015 GUS data, http://stat.gov.pl, data as at 27.02.2015 source: data based on a GUS report: Information Society in Poland in 2014 (Społeczeństwo informacyjne w Polsce w 2014 roku) source: data based on a GUS report: Information Society in Poland in 2014 (Społeczeństwo informacyjne w Polsce w 2014 roku) source: data based on a report by PMR (a company): Online trading in Poland in 2014. Analysis and prognosis of e-commerce market development in 2014-2019 (Handel internetowy w Polsce 2014. Analiza i prognoza rozwoju rynku e-commerce na lata 2014-2019)

The situation of different operators around the world is not the same but European postal agencies more and more often decide to seize the opportunities connected with making their company a public one. Key factors increasing the chances of their products and services being successful are a credible development strategy and stable financial prospects, even if the company brought about losses in the period preceding the public proposal.

European operators systematically strive to optimise costs by means of, inter alia, outsourcing delivery services, transforming offices into agencies, creating specialised business structural units within their company (e.g. eservices, logistics, direct marketing), and concluding agreements for consolidating the flow of parcels (e.g. PostNord Group – the postal services of Sweden and Denmark, Asendia – the postal services of France and Switzerland). State policies and the policy of regulatory authorities regarding the quality of public services and the function of the designated operator exert an influence on the situation of operators. Over the course of several years, a change of this situation has become noticeable. Access to public services - including commonly needed services such as the supply of power, gas, heat, public transportation services, pensions and disability pensions, informational services, educational services, healthcare, and postal services - is guaranteed to citizens. However, the right balance still needs to be struck between “the lowest cost of services possible” and “solutions guaranteeing proper service quality” (matters such as service availability, safety, and confidentiality, well-tested procedures, and skills and knowledge of employees enhanced with stable employment conditions are still analysed).

9)

source: Article entitled: “Operatorzy pocztowi szukają nowych źródeł przychodów w sieci,” www.gazetaprawna.pl, 2014-03-25 based PwC data source: Article entitled: “Operatorzy pocztowi szukają nowych źródeł przychodów w sieci,” www.gazetaprawna.pl, 2014-03-25 based PwC data 11) source: Article entitled: “Operatorzy pocztowi szukają nowych źródeł przychodów w sieci,” www.gazetaprawna.pl, 2014-03-25 based PwC data 12) source: Achieving High Performance in the Postal Industry. Accenture Research and Insights 2014 10)

23

EXTERNAL FACTORS AFFECTING THE FUNCTIONING OF POCZTA POLSKA IN 2014 Basic economic tendencies In an age of progressing economic globalization, Polish companies have to face not only local uncertainties on macro- and micro-economic level but also changes regarding the situation on the global and European levels. Rapid technological changes and globalisation render local markets and the world’s economy unstable. Such changes also affect the economic development of particular countries.

Situation of the postal services sector According to GUS6), in 2014, more than 74% of all Polish households had access to the Internet and more than 25% of all Poles use smartphones7). This contributed to growing e-substitution (replacement of conventional services with digital services) and, at the same time, to dynamic development of Internet trading - the value of the e-commerce market in Poland. in 2014 increased by 15% in comparison to 2013 and amounted to more than PLN 27 billion8).

As of now, the GDP dynamics in Europe is low. When compared to other countries of the European Union, Polish GDP continues to steadily increase. According to preliminary data from the Central Statistical Office of Poland (GUS), Polish GDP increased by 3.4%1) in 2014 while the average increase of GDP in countries of the EU was 1.3%2). There were two factors facilitating the economic development of Poland: a drop of the unemployment rate to 11.5% and an increase of monthly gross remuneration by 3.4% in comparison with the preceding year3). Low interest rates had had a significant influence on the economic situation within the European Union. In 2014, several reductions of interest rates were effected by the Monetary Policy Council (RPP) in 2014, lowering them to 2.00% (reference rate)4) by the end of 2014. Current and expected changes regarding interest rates are closely related to the level of inflation of the prices of goods and services in Poland which, according to GUS, amounted to 0% in 2014 and even reached negative values in the last months of that year5).

In the period from 2008 to 2013, Italian postal services reported a decrease of the number of conventional parcels by 39%9), Spanish mail service - by nearly 30%10), and British postal services - by 14%11). A compilation of data from 19 postal operators from around the world (including Scandinavian, American, German, New Zealand, Swiss, Japanese, and other operators) for the period from 2007 to 2012 indicates that the volume of conventional correspondence has decreased by circa 23% (CAGR 5%)12). Postal operators, reacting to market tendencies, introduce innovative solutions and value-added services to their basic offer consisting of distributing letters and parcels, logistical services, and financial services which remain their main source of income. They also offer a number of public services, both digital and conventional, as a trusted third party and in cooperation with public administration bodies.

1) 2) 3)

Analyses of market tendencies indicate that digital technologies develop intensively, that usage of mobile devices increases, and that the need for multi-channel access to services meeting the needs of customers pertaining to mobility, multi-channel communication and practical, everyday solutions increases.

22

Annual Report 2014

The postal market is one of the fastest-changing of all areas of economy. The most important tendency transforming the postal services sector concerns the very model of correspondence, moving away from conventional mail towards digital communication, and the development of the domestic e-commerce and crossborder sectors. Decreasing number of conventional parcels is a worldwide tendency.

4) 5) 6) 7) 8)

source: GUS data, http://stat.gov.pl, data as at 17.04.2015 employment and remuneration as part of domestic economy in 2014 source: data based on Inflation Report (Raport inflacji) of NBP, March 2015 source: data based on Inflation Report (Raport inflacji) of NBP, March 2015 GUS data, http://stat.gov.pl, data as at 27.02.2015 source: data based on a GUS report: Information Society in Poland in 2014 (Społeczeństwo informacyjne w Polsce w 2014 roku) source: data based on a GUS report: Information Society in Poland in 2014 (Społeczeństwo informacyjne w Polsce w 2014 roku) source: data based on a report by PMR (a company): Online trading in Poland in 2014. Analysis and prognosis of e-commerce market development in 2014-2019 (Handel internetowy w Polsce 2014. Analiza i prognoza rozwoju rynku e-commerce na lata 2014-2019)

The situation of different operators around the world is not the same but European postal agencies more and more often decide to seize the opportunities connected with making their company a public one. Key factors increasing the chances of their products and services being successful are a credible development strategy and stable financial prospects, even if the company brought about losses in the period preceding the public proposal.

European operators systematically strive to optimise costs by means of, inter alia, outsourcing delivery services, transforming offices into agencies, creating specialised business structural units within their company (e.g. eservices, logistics, direct marketing), and concluding agreements for consolidating the flow of parcels (e.g. PostNord Group – the postal services of Sweden and Denmark, Asendia – the postal services of France and Switzerland). State policies and the policy of regulatory authorities regarding the quality of public services and the function of the designated operator exert an influence on the situation of operators. Over the course of several years, a change of this situation has become noticeable. Access to public services - including commonly needed services such as the supply of power, gas, heat, public transportation services, pensions and disability pensions, informational services, educational services, healthcare, and postal services - is guaranteed to citizens. However, the right balance still needs to be struck between “the lowest cost of services possible” and “solutions guaranteeing proper service quality” (matters such as service availability, safety, and confidentiality, well-tested procedures, and skills and knowledge of employees enhanced with stable employment conditions are still analysed).

9)

source: Article entitled: “Operatorzy pocztowi szukają nowych źródeł przychodów w sieci,” www.gazetaprawna.pl, 2014-03-25 based PwC data source: Article entitled: “Operatorzy pocztowi szukają nowych źródeł przychodów w sieci,” www.gazetaprawna.pl, 2014-03-25 based PwC data 11) source: Article entitled: “Operatorzy pocztowi szukają nowych źródeł przychodów w sieci,” www.gazetaprawna.pl, 2014-03-25 based PwC data 12) source: Achieving High Performance in the Postal Industry. Accenture Research and Insights 2014 10)

23

Regulatory environment

Poczta Polska S.A. on the letter services market

Poczta Polska S.A. on the CEP services market

The value of the Polish conventional correspondence market in 2014 was estimated at PLN 3.8 billion.13) Changes regarding market situation (mostly e-substitution and a decrease of the volume of conventional transaction-related communication between business entities) have led to a reduction of the volumes processed as part of that market by (more than 10% in 2014).14)

The value of the Polish CEP market in 2014 was estimated at PLN 4.7 billion15) - an increase of 7% in comparison with 2013.16) Domestic parcels form the largest portion of that market - over 75% of it - but the development dynamics of economical parcels remain the greatest nevertheless. More than half of parcels are B2B parcels.17)

The volume of conventional correspondence is expected to continue dropping in the future due to, first and foremost, the introduction of e-government solutions and expected legal changes aimed at making the status of a conventional letter sent via registered mail and a message sent via a safe digital channel equal. As far as the conventional correspondence market is concerned, an important tendency is the gradual implementation by operators of hybrid solutions and value-added digital services, making it easier for their customers to access information about service performance, to commission services, and to manage correspondence online. The market is also shaped by its liberalisation, resulting in Poczta Polska S.A. transferring some of the volume it handles to alternative operators; however, the main result of increasing competitive pressure is a reduction of the final price for sending a letter via non-registered mail in the business segment. In 2014, Poczta Polska S.A. delivered over 1.4 billion letters (including addressed advertising parcels), thus unquestionably remaining the leader on the market.

In Poland, CEP market services are provided by around 100 logistical operators18) who deliver courier and express parcels, mostly on a next-day basis. In recent years, market consolidation effected by global integrators (DHL, UPS, FedEX, TNT) and European tycoons (DPD, GLS) who together control 60% of the market has become observable. In 2014, DPD Polska took over a company under the business name of Siódemka. It is expected that, in the nearest future, consolidation activity will reduce the price pressure which has had considerable influence on the B2C market in recent years. The Polish CEP market continues to grow dynamically, chiefly thanks to the development of e-commerce, including cross-border trading. An important element facilitating market development is an extension of the delivery network and making the mode of delivery to customers more versatile. Poczta Polska S.A. has regained its stable position of one of the largest CEP service providers in Poland, after a negative tendency affecting it in 2011 and 2012. Since that time, Poczta Polska S.A. has increased its share of the CEP services market, thus making the entire market more competitive. In 2014, a record-breaking increase of the volume of parcels shipped (an increase by 16% in comparison with the preceding year) was recorded a value markedly exceeding the average for the market. The segment of courier-delivered parcels developed with particularly high dynamics: Poczta Polska S.A. delivered almost 50% more parcels in 2014 than in 2013. Poczta Polska S.A. remains the leader as far as ecommerce deliveries in Poland are concerned.19)

13)

source: own estimates, data regarding alternative entities source: own estimates 15) source: own estimates, PwC 16) source: own estimates, PwC 17) source: own estimates, PwC 18) source: www.uke.gov.pl, Report regarding the condition of the postal industry in 2013 (Raport o stanie rynku pocztowego za 2013 r.), table 4 19) source: Research into the level of satisfaction with Internet shopping before Christmas. ARC Rynek i opinie 01.2015. 14)

24

Annual Report 2014

In 2014, Poczta Polska S.A. rendered postal services as a postal operator acting on a liberalised, regulated market. The main legal act on the basis of which Poczta Polska S.A. pursued its above-indicated activity was the Postal Act (Journal of Laws of 2012, item 1529). Pursuant to the provisions of said act, Poczta Polska S.A. will be the provider of universal services until the end of 2015 and, having won the relevant contest, for 10 years thereafter. This function is connected with being obliged to provide certain pre-defined postal services, in the country and abroad, in line with legal requirements pertaining to, inter alia, maintaining a certain number of postal offices and a certain delivery frequency. In 2014, the company had to, for the first time, face new principles regarding the funding of universal services, introducing a system for calculating net costs (whose greater portion - 96% - is borne by the designated operator itself) and preparing a regulatory accounting system. The competitive standing of Poczta Polska was affected by e-substitution and strict regulatory requirements pertaining to Poczta Polska S.A. in conjunction with facilitations available to alternative operators. One of the effects of such situation is reduced income flow from conventional services. Liberalisation of the law regarding the postal services market (in particular: making it possible for private operators to pursue business activity only on the basis of an entry in the relevant register while the designated operator is obliged to comply with requirements regarding the provision of universal services, including price-setting requirements which do not apply to private entities) resulted in the company losing its contract for handling the correspondence of the Ministry of Justice. This spurred a social discussion about the quality and safety of universal services and the role of the designated operator. The difficulties of the competition regarding performing that contract in conjunction with the high quality of services previously offered by Poczta Polska S.A. demonstrated that there are certain social costs to be borne if public tenders are settled exclusively on the basis of the lowest price offered, without verified qualitative criteria pertaining to public services.

The situation doubtlessly contributed to an increase of awareness of the negative impact “junk contracts” have on economy for it is, to a considerable extent, them that make it possible to propose competitive prices as part of a public bid. Such contracts reduce costs borne by companies at the expense of their own employees. Such a discussion lead to the introduction of a change to the public procurement law, allowing the use of a social criterion as one of the criteria for choosing the bidder and to an increase of the number of tender as part of which such a criterion is taken into account. In addition to regulations regarding postal operators, the postal market is also influenced by regulations pertaining to customers, particularly the act of 16 February 2007 on competition and consumer protection (Journal of Laws of 2015, item 184). e-commerce development is facilitated by European Union laws aimed at removing obstacles hindering it and enhancing consumer rights protection. On 25 December 2014, the act of 30 May 2014 on consumer rights (Journal of Laws of 2014, item 827) became effective, extending the scope of protection of consumer interests in their relations with entrepreneurs, particularly as part of e-commerce. Taking such extended requirements regarding consumer protection following from said act into account, Poczta Polska S.A. adjusted its services to what the new act required. In 2014, activity shaping the European regulatory environment was also important. The European Commission took up a project aimed at creating a unified postal packages market in all Europe by means of publishing the Green Book on e-Commerce. Poczta Polska has actively participated in its development. Such unification, particularly with regard to the B2C market (e-shops), is to consist in improve mutual inter-operability (better quality of service, parcel tracking) and, first and foremost, in reducing and making uniform tariffs regarding cross-border packages (comparable to those for domestic packages).

25

Regulatory environment

Poczta Polska S.A. on the letter services market

Poczta Polska S.A. on the CEP services market

The value of the Polish conventional correspondence market in 2014 was estimated at PLN 3.8 billion.13) Changes regarding market situation (mostly e-substitution and a decrease of the volume of conventional transaction-related communication between business entities) have led to a reduction of the volumes processed as part of that market by (more than 10% in 2014).14)

The value of the Polish CEP market in 2014 was estimated at PLN 4.7 billion15) - an increase of 7% in comparison with 2013.16) Domestic parcels form the largest portion of that market - over 75% of it - but the development dynamics of economical parcels remain the greatest nevertheless. More than half of parcels are B2B parcels.17)

The volume of conventional correspondence is expected to continue dropping in the future due to, first and foremost, the introduction of e-government solutions and expected legal changes aimed at making the status of a conventional letter sent via registered mail and a message sent via a safe digital channel equal. As far as the conventional correspondence market is concerned, an important tendency is the gradual implementation by operators of hybrid solutions and value-added digital services, making it easier for their customers to access information about service performance, to commission services, and to manage correspondence online. The market is also shaped by its liberalisation, resulting in Poczta Polska S.A. transferring some of the volume it handles to alternative operators; however, the main result of increasing competitive pressure is a reduction of the final price for sending a letter via non-registered mail in the business segment. In 2014, Poczta Polska S.A. delivered over 1.4 billion letters (including addressed advertising parcels), thus unquestionably remaining the leader on the market.

In Poland, CEP market services are provided by around 100 logistical operators18) who deliver courier and express parcels, mostly on a next-day basis. In recent years, market consolidation effected by global integrators (DHL, UPS, FedEX, TNT) and European tycoons (DPD, GLS) who together control 60% of the market has become observable. In 2014, DPD Polska took over a company under the business name of Siódemka. It is expected that, in the nearest future, consolidation activity will reduce the price pressure which has had considerable influence on the B2C market in recent years. The Polish CEP market continues to grow dynamically, chiefly thanks to the development of e-commerce, including cross-border trading. An important element facilitating market development is an extension of the delivery network and making the mode of delivery to customers more versatile. Poczta Polska S.A. has regained its stable position of one of the largest CEP service providers in Poland, after a negative tendency affecting it in 2011 and 2012. Since that time, Poczta Polska S.A. has increased its share of the CEP services market, thus making the entire market more competitive. In 2014, a record-breaking increase of the volume of parcels shipped (an increase by 16% in comparison with the preceding year) was recorded a value markedly exceeding the average for the market. The segment of courier-delivered parcels developed with particularly high dynamics: Poczta Polska S.A. delivered almost 50% more parcels in 2014 than in 2013. Poczta Polska S.A. remains the leader as far as ecommerce deliveries in Poland are concerned.19)

13)

source: own estimates, data regarding alternative entities source: own estimates 15) source: own estimates, PwC 16) source: own estimates, PwC 17) source: own estimates, PwC 18) source: www.uke.gov.pl, Report regarding the condition of the postal industry in 2013 (Raport o stanie rynku pocztowego za 2013 r.), table 4 19) source: Research into the level of satisfaction with Internet shopping before Christmas. ARC Rynek i opinie 01.2015. 14)

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Annual Report 2014

In 2014, Poczta Polska S.A. rendered postal services as a postal operator acting on a liberalised, regulated market. The main legal act on the basis of which Poczta Polska S.A. pursued its above-indicated activity was the Postal Act (Journal of Laws of 2012, item 1529). Pursuant to the provisions of said act, Poczta Polska S.A. will be the provider of universal services until the end of 2015 and, having won the relevant contest, for 10 years thereafter. This function is connected with being obliged to provide certain pre-defined postal services, in the country and abroad, in line with legal requirements pertaining to, inter alia, maintaining a certain number of postal offices and a certain delivery frequency. In 2014, the company had to, for the first time, face new principles regarding the funding of universal services, introducing a system for calculating net costs (whose greater portion - 96% - is borne by the designated operator itself) and preparing a regulatory accounting system. The competitive standing of Poczta Polska was affected by e-substitution and strict regulatory requirements pertaining to Poczta Polska S.A. in conjunction with facilitations available to alternative operators. One of the effects of such situation is reduced income flow from conventional services. Liberalisation of the law regarding the postal services market (in particular: making it possible for private operators to pursue business activity only on the basis of an entry in the relevant register while the designated operator is obliged to comply with requirements regarding the provision of universal services, including price-setting requirements which do not apply to private entities) resulted in the company losing its contract for handling the correspondence of the Ministry of Justice. This spurred a social discussion about the quality and safety of universal services and the role of the designated operator. The difficulties of the competition regarding performing that contract in conjunction with the high quality of services previously offered by Poczta Polska S.A. demonstrated that there are certain social costs to be borne if public tenders are settled exclusively on the basis of the lowest price offered, without verified qualitative criteria pertaining to public services.

The situation doubtlessly contributed to an increase of awareness of the negative impact “junk contracts” have on economy for it is, to a considerable extent, them that make it possible to propose competitive prices as part of a public bid. Such contracts reduce costs borne by companies at the expense of their own employees. Such a discussion lead to the introduction of a change to the public procurement law, allowing the use of a social criterion as one of the criteria for choosing the bidder and to an increase of the number of tender as part of which such a criterion is taken into account. In addition to regulations regarding postal operators, the postal market is also influenced by regulations pertaining to customers, particularly the act of 16 February 2007 on competition and consumer protection (Journal of Laws of 2015, item 184). e-commerce development is facilitated by European Union laws aimed at removing obstacles hindering it and enhancing consumer rights protection. On 25 December 2014, the act of 30 May 2014 on consumer rights (Journal of Laws of 2014, item 827) became effective, extending the scope of protection of consumer interests in their relations with entrepreneurs, particularly as part of e-commerce. Taking such extended requirements regarding consumer protection following from said act into account, Poczta Polska S.A. adjusted its services to what the new act required. In 2014, activity shaping the European regulatory environment was also important. The European Commission took up a project aimed at creating a unified postal packages market in all Europe by means of publishing the Green Book on e-Commerce. Poczta Polska has actively participated in its development. Such unification, particularly with regard to the B2C market (e-shops), is to consist in improve mutual inter-operability (better quality of service, parcel tracking) and, first and foremost, in reducing and making uniform tariffs regarding cross-border packages (comparable to those for domestic packages).

25

across Poland made deliveries easier for Poles. That really put comfort within their reach.

26 32

Annual Report 2014

BUSINESS ACTIVITY OF POCZTA POLSKA S.A. IN 2014

A well-developed network of offices available all

27

across Poland made deliveries easier for Poles. That really put comfort within their reach.

26 32

Annual Report 2014

BUSINESS ACTIVITY OF POCZTA POLSKA S.A. IN 2014

A well-developed network of offices available all

27

BUSINESS ACTIVITY OF POCZTA POLSKA S.A. IN 2014 Performance of the company’s strategy A strategy is a comprehensive programme of changes to be introduces within a company, it defines basic matters such as the company’s vision and values shared by all employees. Strategic objectives are formed on its basis and it defines the most important directions of development and the mode of change introduction. It is closely linked with material and financial planning, ensuring that management and company objectives remain consistent both at present and in the long run. A strategic priority of the company was to defend its income from the conventional letter services market, strongly affected by e-substitution and price pressure.

The directions of Poczta Polska S.A. strategic development pertained to CEP, logistical services, insurance services, and banking services, defining them as the most important alternative sources of income for the company. In 2014, Poczta Polska S.A. has registered a major increase in all of the above-indicated sectors. This made it possible for the company to achieve positive financial performance in spite of the negative impact of the market environment on conventional services which proved greater than expected and in spite of practical, everyday considerations.

Implementation of the company’s strategy involved prioritising changes by means of, inter alia: • new approach to selling services, assuming synergy between companies from Poczta Polska Group, particularly as regards banking and insurance services, • implementation of a new model of sales network, aimed at promoting gradual evolution from post offices to modern and user-friendly service points. That model assumes that post offices are to be located close to customers, that they are to be governed by profitability criteria, and that they are to be equipped with new functionalities (Postal Financial Zones, round-the-clock self-service areas, Self-Service Commercial Zones), • new product policy assuming the development of value-added services accompanying conventional services and e-services, aimed at making the range of products offered and prices more versatile and making it possible to better tailor services to the needs of customers; it is to be implemented by extended and well-motivated sales personnel and supported with active marketing, • introduction of new products was possible thanks to, among other things, new management methods applied to IT projects, • introduction of new technologies for turning services into e-services, proposing technological solutions prepared especially for them to customers, and automating internal processes of the company, boosted thanks to effective investment performance, • changing the image of Poczta Polska Group among business customers so as to make them perceive the company as the best choice of a logistical partner and the preferred provider of postal and financial services, • developing human capital thanks to the introduction of competence development programme and steering organisational culture towards involvement and cooperation, • centralisation and optimisation of support functions effectively facilitating business functions while at the same time maintaining cost discipline,

Communication letter and advertising services Reacting to the dynamic development of e-substitution, the company strived to make the situation of the communications market more stable by means of preparing a modernized offer for the business sector and by means of intensively developing international correspondence and digital services. Income generated by advertising services increased by more than 10% in comparison with 2013. Poczta Polska S.A. is the designated operator for providing universal services pursuant to the provisions of the Postal Law. Such services include letters sent via regular mail and registered mail and parcels with declared value, shipped to locations in Poland and abroad. Poczta Polska S.A. also offers advertising services addressed, profiled, and non-addressed - as well as contractual services for business customers. In 2014, due to the more and more intensive esubstitution, the volume of letters handled decreased, causing a decrease of income generated by correspondence parcels. Due to this, the company developed and improved its offer regarding letters and advertising services, smoothly adjusting it to the expectations of customers and the demands of the market. The portfolio of services offered to business customers and private customers was modified. The company started providing new services (e.g. profiled marketing, GLOBAL Exprès) and successfully developed its offer of additional electronic services belonging to the eINFO group. In addition to that, the company developed hybrid solutions and e-services using its Envelo platform (managed by its subsidiary: Poczta Polska Usługi Cyfrowe Sp. z o.o.) in 2014. Those services are based on a safe and trustworthy communication platform which makes it possible to satisfy all needs of customers regarding private and business communication, as well as needs connected with communication between public administration bodies and citizens.

• constant monitoring of the results of business activity: the profitability of services, product lines, the condition of offices, the efficiency and quality of internal processes; effectively taking steps boosting efficiency.

28

Annual Report 2014

29

BUSINESS ACTIVITY OF POCZTA POLSKA S.A. IN 2014 Performance of the company’s strategy A strategy is a comprehensive programme of changes to be introduces within a company, it defines basic matters such as the company’s vision and values shared by all employees. Strategic objectives are formed on its basis and it defines the most important directions of development and the mode of change introduction. It is closely linked with material and financial planning, ensuring that management and company objectives remain consistent both at present and in the long run. A strategic priority of the company was to defend its income from the conventional letter services market, strongly affected by e-substitution and price pressure.

The directions of Poczta Polska S.A. strategic development pertained to CEP, logistical services, insurance services, and banking services, defining them as the most important alternative sources of income for the company. In 2014, Poczta Polska S.A. has registered a major increase in all of the above-indicated sectors. This made it possible for the company to achieve positive financial performance in spite of the negative impact of the market environment on conventional services which proved greater than expected and in spite of practical, everyday considerations.

Implementation of the company’s strategy involved prioritising changes by means of, inter alia: • new approach to selling services, assuming synergy between companies from Poczta Polska Group, particularly as regards banking and insurance services, • implementation of a new model of sales network, aimed at promoting gradual evolution from post offices to modern and user-friendly service points. That model assumes that post offices are to be located close to customers, that they are to be governed by profitability criteria, and that they are to be equipped with new functionalities (Postal Financial Zones, round-the-clock self-service areas, Self-Service Commercial Zones), • new product policy assuming the development of value-added services accompanying conventional services and e-services, aimed at making the range of products offered and prices more versatile and making it possible to better tailor services to the needs of customers; it is to be implemented by extended and well-motivated sales personnel and supported with active marketing, • introduction of new products was possible thanks to, among other things, new management methods applied to IT projects, • introduction of new technologies for turning services into e-services, proposing technological solutions prepared especially for them to customers, and automating internal processes of the company, boosted thanks to effective investment performance, • changing the image of Poczta Polska Group among business customers so as to make them perceive the company as the best choice of a logistical partner and the preferred provider of postal and financial services, • developing human capital thanks to the introduction of competence development programme and steering organisational culture towards involvement and cooperation, • centralisation and optimisation of support functions effectively facilitating business functions while at the same time maintaining cost discipline,

Communication letter and advertising services Reacting to the dynamic development of e-substitution, the company strived to make the situation of the communications market more stable by means of preparing a modernized offer for the business sector and by means of intensively developing international correspondence and digital services. Income generated by advertising services increased by more than 10% in comparison with 2013. Poczta Polska S.A. is the designated operator for providing universal services pursuant to the provisions of the Postal Law. Such services include letters sent via regular mail and registered mail and parcels with declared value, shipped to locations in Poland and abroad. Poczta Polska S.A. also offers advertising services addressed, profiled, and non-addressed - as well as contractual services for business customers. In 2014, due to the more and more intensive esubstitution, the volume of letters handled decreased, causing a decrease of income generated by correspondence parcels. Due to this, the company developed and improved its offer regarding letters and advertising services, smoothly adjusting it to the expectations of customers and the demands of the market. The portfolio of services offered to business customers and private customers was modified. The company started providing new services (e.g. profiled marketing, GLOBAL Exprès) and successfully developed its offer of additional electronic services belonging to the eINFO group. In addition to that, the company developed hybrid solutions and e-services using its Envelo platform (managed by its subsidiary: Poczta Polska Usługi Cyfrowe Sp. z o.o.) in 2014. Those services are based on a safe and trustworthy communication platform which makes it possible to satisfy all needs of customers regarding private and business communication, as well as needs connected with communication between public administration bodies and citizens.

• constant monitoring of the results of business activity: the profitability of services, product lines, the condition of offices, the efficiency and quality of internal processes; effectively taking steps boosting efficiency.

28

Annual Report 2014

29

New services and solutions regarding letter services, advertising services, and additional electronic services in 2014

Profiled Mailing

Letter from Santa Claus

New package of additional services

An effective semi-addressed advertising service thanks to which business customers are able to find new buyers for their products and services. In the offer of Poczta Polska S.A., this service is positioned between non-addressed prints and addressed marketing parcels. A unique feature of this service is its attractive price and the possibility to reach prospective customer groups which are not recorded in standard marketing databased available on the market, chosen by means of geo-marketing analysis.

Close to the end of 2014, Poczta Polska S.A. made a service offered by Finnish Postal Service: “Letter from Santa Claus.” It was possible to order such a special parcel not only at a post office but also via the Internet.

Due to the growing demand for electronic solutions facilitating communication, Poczta Polska S.A. has been implementing solutions based on contemporary information and communication technologies. Those include:

eINFO: notification is an additional functionality for customers using the Registered Mail to Mailbox service which consists of sending a short text message (SMS) or an email notification to the addressee, letting them know that a parcel has been delivered to their mailbox;

eINFO: advice note - advice note in the electronic form making it easier to receive the parcel: the customer is notified that the parcel is ready to be received via SMS or e-mail. Starting from November 2014, it was possible to submit an application for receiving advice notes not only as a hard copy but also in the electronic form, without leaving home, it was enough to fill-out and submit an electronic form. In 2014, 350 thousand customers applied for electronic advice notes.

eINFO: receipt (Electronic Confirmation of Receipt – ECR) - in domestic circulations of parcels, this is a convenient alternative solution replacing hard copy confirmation of receipt. It is based on the latest ICT solutions and, at the same time, complies with all IT standards and legal requirements. This service is available to business customers. Electronic Confirmation of Receipt makes it possible to register the delivery of a parcel send as part of the service also for purposes related to court proceedings. All this results in the number of business customers interested in this service keeps growing and in more and more lines of business deciding to make use of this innovative solution. In 2014, local government bodies and financial institutions became customers using ECR;

Letter from Santa Claus was sent in a special Christmas envelope sporting a Finnish Christmas stamp. It was delivered to people from all around Poland. The service was very popular with the company’s customers.

Mailing activity carried out thanks to this tool is highly effective.

GLOBAL Exprès

Delivery upon demand

In July 2014, Poczta Polska S.A. introduced a special crossborder parcel for, among others, the e-commerce sector. Its name was GLOBAL Exprès. The service made it possible for customers to send letters and small objects up to 2 kg at an attractive price to 34 countries.

Reacting to the needs of our customers pertaining to service performance time, the company introduced a service called “Delivery upon demand.” The service makes it possible for customers, without leaving home, to order a repeated delivery of a parcel sent via registered mail (under general rules), for which they have already received a notification of delivery, to the address indicated on the parcel or to a new address or to receive that parcel from any post office in Poland.

GLOBAL Exprès are made a part of the fastest stream of handling. Thanks to this, they can be delivered even faster than priority parcels. Such parcels are delivered within 1 to 4 days to most European countries. There is also a tracking system for them. This solution is very popular with customers. Throughout the last five months of 2014, more than 49 thousand of such parcels were shipped.

30

Annual Report 2014

Electronic Collective Proof of Delivery (eZDO) - a tool for facilitating the handling of business customers: the addressee is notified of parcels sent to them before they are physically delivered. This functionality makes it possible for customers to compare physically received parcels with parcels listed in the electronic register and to keep records in this convenient form for their own purposes. Data thus transferred are available as part of an application called Electronic Sender;

Registered Mail to Mailbox - a service as part of which parcels sent to a customer via registered mail can be transferred directly to their mailbox. Starting from November 2014, it was possible to submit an application for transferring registered mail not only as a hard copy but also in the electronic form, without leaving home, it was enough to fill-out and submit an electronic form.

eINFO: delivery - this service consists in notifying the sender, via SMS or e-mail, of the delivery date or return of their parcel, depending on their instructions. eINFO: delivery is a service for private customers connected with parcels sent via registered mail. In 2014, more than 4 million of parcels were sent via registered mail with the eINFO: delivery service.

31

New services and solutions regarding letter services, advertising services, and additional electronic services in 2014

Profiled Mailing

Letter from Santa Claus

New package of additional services

An effective semi-addressed advertising service thanks to which business customers are able to find new buyers for their products and services. In the offer of Poczta Polska S.A., this service is positioned between non-addressed prints and addressed marketing parcels. A unique feature of this service is its attractive price and the possibility to reach prospective customer groups which are not recorded in standard marketing databased available on the market, chosen by means of geo-marketing analysis.

Close to the end of 2014, Poczta Polska S.A. made a service offered by Finnish Postal Service: “Letter from Santa Claus.” It was possible to order such a special parcel not only at a post office but also via the Internet.

Due to the growing demand for electronic solutions facilitating communication, Poczta Polska S.A. has been implementing solutions based on contemporary information and communication technologies. Those include:

eINFO: notification is an additional functionality for customers using the Registered Mail to Mailbox service which consists of sending a short text message (SMS) or an email notification to the addressee, letting them know that a parcel has been delivered to their mailbox;

eINFO: advice note - advice note in the electronic form making it easier to receive the parcel: the customer is notified that the parcel is ready to be received via SMS or e-mail. Starting from November 2014, it was possible to submit an application for receiving advice notes not only as a hard copy but also in the electronic form, without leaving home, it was enough to fill-out and submit an electronic form. In 2014, 350 thousand customers applied for electronic advice notes.

eINFO: receipt (Electronic Confirmation of Receipt – ECR) - in domestic circulations of parcels, this is a convenient alternative solution replacing hard copy confirmation of receipt. It is based on the latest ICT solutions and, at the same time, complies with all IT standards and legal requirements. This service is available to business customers. Electronic Confirmation of Receipt makes it possible to register the delivery of a parcel send as part of the service also for purposes related to court proceedings. All this results in the number of business customers interested in this service keeps growing and in more and more lines of business deciding to make use of this innovative solution. In 2014, local government bodies and financial institutions became customers using ECR;

Letter from Santa Claus was sent in a special Christmas envelope sporting a Finnish Christmas stamp. It was delivered to people from all around Poland. The service was very popular with the company’s customers.

Mailing activity carried out thanks to this tool is highly effective.

GLOBAL Exprès

Delivery upon demand

In July 2014, Poczta Polska S.A. introduced a special crossborder parcel for, among others, the e-commerce sector. Its name was GLOBAL Exprès. The service made it possible for customers to send letters and small objects up to 2 kg at an attractive price to 34 countries.

Reacting to the needs of our customers pertaining to service performance time, the company introduced a service called “Delivery upon demand.” The service makes it possible for customers, without leaving home, to order a repeated delivery of a parcel sent via registered mail (under general rules), for which they have already received a notification of delivery, to the address indicated on the parcel or to a new address or to receive that parcel from any post office in Poland.

GLOBAL Exprès are made a part of the fastest stream of handling. Thanks to this, they can be delivered even faster than priority parcels. Such parcels are delivered within 1 to 4 days to most European countries. There is also a tracking system for them. This solution is very popular with customers. Throughout the last five months of 2014, more than 49 thousand of such parcels were shipped.

30

Annual Report 2014

Electronic Collective Proof of Delivery (eZDO) - a tool for facilitating the handling of business customers: the addressee is notified of parcels sent to them before they are physically delivered. This functionality makes it possible for customers to compare physically received parcels with parcels listed in the electronic register and to keep records in this convenient form for their own purposes. Data thus transferred are available as part of an application called Electronic Sender;

Registered Mail to Mailbox - a service as part of which parcels sent to a customer via registered mail can be transferred directly to their mailbox. Starting from November 2014, it was possible to submit an application for transferring registered mail not only as a hard copy but also in the electronic form, without leaving home, it was enough to fill-out and submit an electronic form.

eINFO: delivery - this service consists in notifying the sender, via SMS or e-mail, of the delivery date or return of their parcel, depending on their instructions. eINFO: delivery is a service for private customers connected with parcels sent via registered mail. In 2014, more than 4 million of parcels were sent via registered mail with the eINFO: delivery service.

31

CEP and logistics

The Envelo Platform In order to maintain the competitive character of its offer and to retain the good position of its brand on the market, Poczta Polska S.A., with the help of other entities from Poczta Polska Group, continuously develops and implements solutions employing the latest technologies. An example of such a solution is the Envelo platform which was created in response to the progressing electronization of communication and the planned changes of European legislation. As part of the platform, a range of digital communication and hybrid communication services is being developed in addition to value-added services accompanying the standard range of services. When the platform was activated in 2013, three basic neoproducts were offered: neostamp, neopostcard, and neoletter. In 2014, further e-services, meant for business customers, were added. In April, neoinvoice was added and, in June, collective neoinvoice was added. This cuttingedge e-service makes it possible to transfer all invoices via the Internet, regardless of the planned form of delivery: the electronic form or hard copy. Addressees of electronic neoinvoices - customers of small, medium sized, and large companies - can receive them, view them, and archive them in the neobills mailbox. PGE Obrót SA - the largest supplier of electrical power in Poland who sent out over 6 million documents in the electronic form in 2014 - is just one example of user of the service. In 2014, new functionalities were added to products already on offer at Envelo. Thanks to the neopostcard service, it is possible to send personalized postcards created using new visual design options. It is possible to print neoletters both in colour and in black-and-white. Neostamps for parcels sent via registered mail and additional services make it easier to send correspondence via registered mail. Neostamps are also available for letters sent abroad and there are also personalized neostamps, making it possible to individualise the message sent by means of an unique conventional stamp. In July 2014, a mobile application making it possible to send a neopostcard, also a personalized one, order a Pocztex courier, track the parcel, search for a post office, a mailbox, or a zip code was made available.

Thanks to changes regarding its offer and thanks to its e-commerce expansion, the company managed to increase the volumes in comparison with the preceding year: Starting from December 2014, the customers neobills mailbox is also available via the application. Developing the Envelo brand also means introducing further products and perfecting the product offer. A new feature added is an Envelo mailbox, available to signed-in users. Thanks to it, users can send neoletters via regular or registered mail and receive neoinvoices. There is no fee for account handling. We guarantee to users that their data are safe with us. Users who additionally verify their identity at a post office of Poczta Polska gain access to a new service - electronic neoletter. It allows them to safely communicate via the Internet, without fearing spam or viruses, having the identity of the sender and the receiver, as well as the time when the message was sent and received, confirmed. As part of Envelo, a contemporary system for digitizing conventional letters is also being developed. Every user who signs an agreement with Poczta Polska will be able to receive scanned copies of their incoming mail to their Envelo mailbox. Having examined the scanned copy of the envelope, the user will be able to decide if Poczta Polska S.A. is to destroy the parcel or open it and send them a scanned copy of its contents to them or send the parcel to the address indicated on it without opening it. The Envelo platform was immensely successful in 2014 Its users sent 1 million neostamps and 90 thousand neopostcards were sent from the platform and 100 issuers of neoinvoices were procured. More than 30 thousand users registered on Envelo and the mobile application was installed by over 40 thousand of smartphone and tablet owners. The potential of the latest digital solutions for correspondence management was confirmed by winning the tender for service provision to PGE Obrót SA and the sending of more than 6 million of electronic documents. The development and innovative character of Envelo services was noticed on the market. In April, the brand received the Market’s Leader in Innovation 2014 (Rynkowy Lider Innowacji 2014) title. The Envelo platform made it to the final round of the IT Leader 2014 (Lider Informatyki 2014) contest.

CEP services volume increased by more than

16%

Annual Report 2014

50%

CEP services The strategy of Poczta Polska S.A. defines parcel services, courier services, and logistical services as the key aspects of the company’s development. In 2014, Poczta Polska managed to achieve an increase in volumes handled exceeding the growth of the market almost twice. As far as the business customer sector (B2C and B2B), forming over 90% of the market, is concerned, Poczta Polska S.A. developed several times faster than the market, registering an increase of volumes handled of 33%, while 20) the increase of the market amounted to circa 7%. This success gains even more significance when one takes into account the fact that the largest global courier service providers are active on the Polish market and that this type of market is one of the most competitive sectors of economy. The increase of sale of courier services, which now form circa 50% of all CEP volumes handled by Poczta Polska S.A., in 2013 and 2014 is a continuously positive tendency with positive dynamics. In December 2014, Poczta Polska S.A. transported almost 6 million packages. Sales revenues in that period were greater by almost 20% than sales revenues generated in December 2013. Such positive performance results from, inter alia, a complete restructuring of the product offer for business and private customers alike. 20)

32

the volume of courier services the sale of the “Pallet Parcel” increased by almost service increased by

81%

Pocztex Pocztex Courier 48 service was added to other courier services of the company. This service is available only to business customers and it is rendered on a door-to-door basis, with a guaranteed delivery time of D+2. The service was very much appreciated on the market and more than 80% of the overall volume of courier services rendered to business customers was rendered as part of it. EXTRA24 Parcel, PARCEL24, PARCEL48 EXTRA24 Parcel - guaranteed next day delivery. The sender can choose both the day and time of delivery. PARCEL24 - one of the fastest and most convenient parcel types, including a number of practical additional services in a freely chosen configuration and guaranteed 1-day or 2-day delivery. PARCEL48 - a convenient solution ensuring that the addressee will get the parcel within two days. Even in its most basic form, this service is one of the best cost-wise. UKRAINE PLUS Parcel In June 2014, Poczta Polska added a new international service to its offer: the UKRAINE PLUS Parcel. The service makes it possible for customers to ship a parcel weighing up to 30 kg of Ukraine at an attractive price. Efficient and prompt delivery, including an option to track the status of the parcel, is one of the advantages of the service.

source: own estimates, PwC

33

CEP and logistics

The Envelo Platform In order to maintain the competitive character of its offer and to retain the good position of its brand on the market, Poczta Polska S.A., with the help of other entities from Poczta Polska Group, continuously develops and implements solutions employing the latest technologies. An example of such a solution is the Envelo platform which was created in response to the progressing electronization of communication and the planned changes of European legislation. As part of the platform, a range of digital communication and hybrid communication services is being developed in addition to value-added services accompanying the standard range of services. When the platform was activated in 2013, three basic neoproducts were offered: neostamp, neopostcard, and neoletter. In 2014, further e-services, meant for business customers, were added. In April, neoinvoice was added and, in June, collective neoinvoice was added. This cuttingedge e-service makes it possible to transfer all invoices via the Internet, regardless of the planned form of delivery: the electronic form or hard copy. Addressees of electronic neoinvoices - customers of small, medium sized, and large companies - can receive them, view them, and archive them in the neobills mailbox. PGE Obrót SA - the largest supplier of electrical power in Poland who sent out over 6 million documents in the electronic form in 2014 - is just one example of user of the service. In 2014, new functionalities were added to products already on offer at Envelo. Thanks to the neopostcard service, it is possible to send personalized postcards created using new visual design options. It is possible to print neoletters both in colour and in black-and-white. Neostamps for parcels sent via registered mail and additional services make it easier to send correspondence via registered mail. Neostamps are also available for letters sent abroad and there are also personalized neostamps, making it possible to individualise the message sent by means of an unique conventional stamp. In July 2014, a mobile application making it possible to send a neopostcard, also a personalized one, order a Pocztex courier, track the parcel, search for a post office, a mailbox, or a zip code was made available.

Thanks to changes regarding its offer and thanks to its e-commerce expansion, the company managed to increase the volumes in comparison with the preceding year: Starting from December 2014, the customers neobills mailbox is also available via the application. Developing the Envelo brand also means introducing further products and perfecting the product offer. A new feature added is an Envelo mailbox, available to signed-in users. Thanks to it, users can send neoletters via regular or registered mail and receive neoinvoices. There is no fee for account handling. We guarantee to users that their data are safe with us. Users who additionally verify their identity at a post office of Poczta Polska gain access to a new service - electronic neoletter. It allows them to safely communicate via the Internet, without fearing spam or viruses, having the identity of the sender and the receiver, as well as the time when the message was sent and received, confirmed. As part of Envelo, a contemporary system for digitizing conventional letters is also being developed. Every user who signs an agreement with Poczta Polska will be able to receive scanned copies of their incoming mail to their Envelo mailbox. Having examined the scanned copy of the envelope, the user will be able to decide if Poczta Polska S.A. is to destroy the parcel or open it and send them a scanned copy of its contents to them or send the parcel to the address indicated on it without opening it. The Envelo platform was immensely successful in 2014 Its users sent 1 million neostamps and 90 thousand neopostcards were sent from the platform and 100 issuers of neoinvoices were procured. More than 30 thousand users registered on Envelo and the mobile application was installed by over 40 thousand of smartphone and tablet owners. The potential of the latest digital solutions for correspondence management was confirmed by winning the tender for service provision to PGE Obrót SA and the sending of more than 6 million of electronic documents. The development and innovative character of Envelo services was noticed on the market. In April, the brand received the Market’s Leader in Innovation 2014 (Rynkowy Lider Innowacji 2014) title. The Envelo platform made it to the final round of the IT Leader 2014 (Lider Informatyki 2014) contest.

CEP services volume increased by more than

16%

Annual Report 2014

50%

CEP services The strategy of Poczta Polska S.A. defines parcel services, courier services, and logistical services as the key aspects of the company’s development. In 2014, Poczta Polska managed to achieve an increase in volumes handled exceeding the growth of the market almost twice. As far as the business customer sector (B2C and B2B), forming over 90% of the market, is concerned, Poczta Polska S.A. developed several times faster than the market, registering an increase of volumes handled of 33%, while 20) the increase of the market amounted to circa 7%. This success gains even more significance when one takes into account the fact that the largest global courier service providers are active on the Polish market and that this type of market is one of the most competitive sectors of economy. The increase of sale of courier services, which now form circa 50% of all CEP volumes handled by Poczta Polska S.A., in 2013 and 2014 is a continuously positive tendency with positive dynamics. In December 2014, Poczta Polska S.A. transported almost 6 million packages. Sales revenues in that period were greater by almost 20% than sales revenues generated in December 2013. Such positive performance results from, inter alia, a complete restructuring of the product offer for business and private customers alike. 20)

32

the volume of courier services the sale of the “Pallet Parcel” increased by almost service increased by

81%

Pocztex Pocztex Courier 48 service was added to other courier services of the company. This service is available only to business customers and it is rendered on a door-to-door basis, with a guaranteed delivery time of D+2. The service was very much appreciated on the market and more than 80% of the overall volume of courier services rendered to business customers was rendered as part of it. EXTRA24 Parcel, PARCEL24, PARCEL48 EXTRA24 Parcel - guaranteed next day delivery. The sender can choose both the day and time of delivery. PARCEL24 - one of the fastest and most convenient parcel types, including a number of practical additional services in a freely chosen configuration and guaranteed 1-day or 2-day delivery. PARCEL48 - a convenient solution ensuring that the addressee will get the parcel within two days. Even in its most basic form, this service is one of the best cost-wise. UKRAINE PLUS Parcel In June 2014, Poczta Polska added a new international service to its offer: the UKRAINE PLUS Parcel. The service makes it possible for customers to ship a parcel weighing up to 30 kg of Ukraine at an attractive price. Efficient and prompt delivery, including an option to track the status of the parcel, is one of the advantages of the service.

source: own estimates, PwC

33

Pallet parcel

in million pieces

in million PLN

• IT systems for supporting CEP services were developed, including: Electronic Sender - a modern and interactive tool for facilitating the sending of parcels and a tracking system for monitoring them. Additionally, a mobile application making it possible to conveniently order courier service was developed; • the pre-paid package service for small and mediumsized companies was modified - thanks to the service, a customer pays for a selected number of parcels in advance and is granted a discount with regard to every one of them. This service is available via the website and hotline of Poczta Polska S.A. • implementation of ezwroty.poczta-polska.pl, an Internet application making it possible for eSellers to maintain complete control over returned orders. eBuyers were granted the option to smoothly and conveniently return goods they bought in several simple steps, by means of filling out an Internet form and shipping the goods from any Poczta Polska S.A. Courier or by means of visiting one of the conveniently placed post offices; • modification of the EXTRA24 Parcel service prepared especially for those customers who prefer to receive their parcels in the afternoon. Since November, parcels are delivered also after 16:00 in 39 Polish cities.

34

Annual Report 2014

30

44

39

+8%

+16% +13%

+81%

15

+14%

+100%

2012 • ecommerce.poczta-polska.pl was started for handling e-commerce and for presenting to eCustomers in one place the parcel-courier services, logistical services, banking services, insurance services, and digital services offered to them by Poczta Polska Group.

51

CEP services market of Poczta Polska

283

Size of the CEP market in Poland in million pieces

262

In 2014, Poczta Polska S.A. continued its expansion towards the growing e-commerce market by means of introducing new products and services meeting the high expectations of e-Sellers and e-Buyers; e-Sellers were provided with a comprehensive offer and simple solutions while e-Buyers could count on comfort, safety, and easy pick-up and return of goods. To this end, in 2014:

In 2014, Poczta Polska S.A. also developed its international offer of CEP services, introducing rules for international postal exchange and procedures for effecting settlements under new acts of the Universal Postal Union. Making use of a network of offices, the company handles returns of e-commerce parcels to, inter alia, Germany and the British Tesco network and the company has introduced a service for easy parcel return, mostly introduced with e-commerce customers in mind: Easy Return Solution.

229

Package of products and services especially for e-commerce

55

Sales performance regarding CEP services and pallet parcels in 2012 to 2014

2013

2014

2012

2013

2014

2012

2013

2014

Logistical services In 2014, Poczta Polska S.A. implemented a strategy for developing logistical services. Efficient usage of the existing logistical network and a new fleet of vehicles made it possible to increase volumes handled and the sales values of the “Pallet Parcel” service. Sales revenues generated by and volumes handled as part of the Pallet Parcel service have been doubling every year for 3 years now. In 2014, sales of the Pallet Parcel service increased by 81%.

Financial services An important factor contributing to the success of packaged cargo logistics of the company in 2014 was the development of modern IT tools. Customers of Poczta Polska could make use of all functionalities of a modern TMS (transport management system) integrated with the existing operating system of the recipient. The system makes collecting orders easier and facilitates smooth management of the flow of domestic parcels and additional products. It significantly improves the quality of services rendered and results in considerable cost optimisation. The Electronic Sender application makes it possible for customers to integrate their systems with the systems of Poczta Polska S.A. and to generate transport documentation on their own. The e-Customer Internet website made available makes it possible for customers to manage information regarding parcels, enabling the handling of corresponding orders, in addition to enabling current communication with the operating system and making it possible to print documentation. Poczta Polska S.A. was praised for developing its “Pallet Parcel” service and for extending its offer of logistical services. The award committee of the “Logistical Operator 2014” research programme awarded a special distinction in the “Dynamic entry onto the domestic packaged cargo market” category to Poczta Polska S.A.

Thanks to intensifying the sales of its financial and insurance services and thanks to limiting the negative impact of e-substitution on conventional financial services, the company managed to effectively stop its revenues from financial services from further decreasing in 2014. The fact that the Polish society makes more and more use of banking services has a direct impact on conventional financial services, resulting in fewer postal transfers and transfers of money to bank account via postal services being handled. Poczta Polska S.A., striving to counteract this tendency, introduced additional electronic functionalities accompanying such services (the option to effect money transfers and pay radio and TV subscription via the Internet). It was possible, thanks to the introduction of a new type of transfer to bank account (priority payment), to significantly limit the decrease of revenue from conventional services in spite of the overall diminishing of the volume of such services handled. From the company’s perspective, developing insurance and banking services provided at Poczta Polska S.A. offices is crucial. In 2014, an increase of revenues generated in those areas made it possible to make up for reduced revenues generated by conventional financial services.

35

Pallet parcel

in million pieces

in million PLN

• IT systems for supporting CEP services were developed, including: Electronic Sender - a modern and interactive tool for facilitating the sending of parcels and a tracking system for monitoring them. Additionally, a mobile application making it possible to conveniently order courier service was developed; • the pre-paid package service for small and mediumsized companies was modified - thanks to the service, a customer pays for a selected number of parcels in advance and is granted a discount with regard to every one of them. This service is available via the website and hotline of Poczta Polska S.A. • implementation of ezwroty.poczta-polska.pl, an Internet application making it possible for eSellers to maintain complete control over returned orders. eBuyers were granted the option to smoothly and conveniently return goods they bought in several simple steps, by means of filling out an Internet form and shipping the goods from any Poczta Polska S.A. Courier or by means of visiting one of the conveniently placed post offices; • modification of the EXTRA24 Parcel service prepared especially for those customers who prefer to receive their parcels in the afternoon. Since November, parcels are delivered also after 16:00 in 39 Polish cities.

34

Annual Report 2014

30

44

39

+8%

+16% +13%

+81%

15

+14%

+100%

2012 • ecommerce.poczta-polska.pl was started for handling e-commerce and for presenting to eCustomers in one place the parcel-courier services, logistical services, banking services, insurance services, and digital services offered to them by Poczta Polska Group.

51

CEP services market of Poczta Polska

283

Size of the CEP market in Poland in million pieces

262

In 2014, Poczta Polska S.A. continued its expansion towards the growing e-commerce market by means of introducing new products and services meeting the high expectations of e-Sellers and e-Buyers; e-Sellers were provided with a comprehensive offer and simple solutions while e-Buyers could count on comfort, safety, and easy pick-up and return of goods. To this end, in 2014:

In 2014, Poczta Polska S.A. also developed its international offer of CEP services, introducing rules for international postal exchange and procedures for effecting settlements under new acts of the Universal Postal Union. Making use of a network of offices, the company handles returns of e-commerce parcels to, inter alia, Germany and the British Tesco network and the company has introduced a service for easy parcel return, mostly introduced with e-commerce customers in mind: Easy Return Solution.

229

Package of products and services especially for e-commerce

55

Sales performance regarding CEP services and pallet parcels in 2012 to 2014

2013

2014

2012

2013

2014

2012

2013

2014

Logistical services In 2014, Poczta Polska S.A. implemented a strategy for developing logistical services. Efficient usage of the existing logistical network and a new fleet of vehicles made it possible to increase volumes handled and the sales values of the “Pallet Parcel” service. Sales revenues generated by and volumes handled as part of the Pallet Parcel service have been doubling every year for 3 years now. In 2014, sales of the Pallet Parcel service increased by 81%.

Financial services An important factor contributing to the success of packaged cargo logistics of the company in 2014 was the development of modern IT tools. Customers of Poczta Polska could make use of all functionalities of a modern TMS (transport management system) integrated with the existing operating system of the recipient. The system makes collecting orders easier and facilitates smooth management of the flow of domestic parcels and additional products. It significantly improves the quality of services rendered and results in considerable cost optimisation. The Electronic Sender application makes it possible for customers to integrate their systems with the systems of Poczta Polska S.A. and to generate transport documentation on their own. The e-Customer Internet website made available makes it possible for customers to manage information regarding parcels, enabling the handling of corresponding orders, in addition to enabling current communication with the operating system and making it possible to print documentation. Poczta Polska S.A. was praised for developing its “Pallet Parcel” service and for extending its offer of logistical services. The award committee of the “Logistical Operator 2014” research programme awarded a special distinction in the “Dynamic entry onto the domestic packaged cargo market” category to Poczta Polska S.A.

Thanks to intensifying the sales of its financial and insurance services and thanks to limiting the negative impact of e-substitution on conventional financial services, the company managed to effectively stop its revenues from financial services from further decreasing in 2014. The fact that the Polish society makes more and more use of banking services has a direct impact on conventional financial services, resulting in fewer postal transfers and transfers of money to bank account via postal services being handled. Poczta Polska S.A., striving to counteract this tendency, introduced additional electronic functionalities accompanying such services (the option to effect money transfers and pay radio and TV subscription via the Internet). It was possible, thanks to the introduction of a new type of transfer to bank account (priority payment), to significantly limit the decrease of revenue from conventional services in spite of the overall diminishing of the volume of such services handled. From the company’s perspective, developing insurance and banking services provided at Poczta Polska S.A. offices is crucial. In 2014, an increase of revenues generated in those areas made it possible to make up for reduced revenues generated by conventional financial services.

35

Insurance services 2014 was another year of dynamic development of the sales of insurance services within the network of Poczta Polska S.A. Thanks to the introduction of more and more insurance products, such as transport insurance policies civil liability, coverage, assistance, and casualty insurance, as well as property insurance: house or apartment insurance policies - which Poczta Polska S.A. offers to its customers, the expansion of Poczta Polska Group onto the insurance market is becoming more and more evident and its sales network continues to develop. Close to the end of 2014, it was possible for customers of Poczta Polska S.A. to purchase insurance products at more than 500 special customer service points (Postal Financial Zones), at other points within the network of Poczta Polska S.A., and from more than 8 000 licensed insurance agents. In 2014, Poczta Polska S.A. started selling insurance using mobile devices with which postmen were equipped. The sales process was simplified by this. At the same time, Poczta Polska S.A. commenced with activity aimed at increasing the competence of its sales employees. As a result of this, sales within the network of PFZ in 2014 increased by 79% in comparison with 2013. Banking services Poczta Polska S.A., as a result of its strategic cooperation with Bank Pocztowy S.A., systematically takes steps aimed at increasing its revenue from the sale of banking products. In comparison with 2013, Poczta Polska S.A. increased its revenues generated by banking services by almost 35% in 2014. The company’s range of banking products in 2014 included the following types of products: • settlement accounts (AlwaysFree Postal Account, Standard Account, and Nestor Account), • savings accounts (Savings Postal Account, New Savings Account), • fixed-term deposit accounts, • consumer credit (including cash loan for employees of work places with reduced credit risk (ZOR), cash loan prepared especially for the elderly, cash loans for other retail customers, as well as revolving credit as part of the current account).

36

Annual Report 2014

Conventional financial services Poczta Polska S.A. and Bank Pocztowy S.A. systematically increase the number of customers making use of their banking products. By the end of 2014, the total number of customers amounted to 1 447 thousand. This proves that the policy regarding changes to the product range is effective. In 2014, sales activity related to consumer credits also developed dynamically within the network of Poczta Polska S.A. As far as loans are concerned, Bank Pocztowy introduced an interesting consolidation offer and a loan called Always the Lowest Rate which makes it possible for customers, on the basis of an informational document from a competitive bank, to obtain lower price-related parameters for their loan. Thanks to synergy between entities belonging to Poczta Polska Group, it was possible to propose loyalty programmes to owners of settlement accounts enabling them to reap the benefits connected with actively using the products and services of the Group. Examples of such programmes: • Postal Package Programme - customers are reimbursed for 10% of expenses borne on selected postal services of Poczta Polska S.A. (mostly packages and letters); • Postal Insurance Programme - customers are reimbursed for 10% of insurance premiums they pad using their settlement account with Bank Pocztowy S.A. as part of policies concluded with Pocztowe Towarzystwo Ubezpieczeń Wzajemnych and as part of co-insurance with Sopockie Towarzystwo Ubezpieczeń Ergo Hestia S.A.; • Pay by link Envelo - customers are reimbursed for 10% of the amount they spent on Envelo products via the pay by ling functionality using their account with Bank Pocztowy S.A. Close to the end of 2014, it was possible for customers to purchase banking products at more than 500 special customer service points (Postal Financial Zones) and at other points within the network of Poczta Polska S.A. Easily accessible and modernised sales network as well as simple and commonly available banking products will form the basis for the stable development of the sales of banking services in the years to come.

In 2014, Poczta Polska S.A. minimised the decrease of revenues generated by conventional financial services by means of modifying the services it rendered. Thanks to this, the company managed to considerably reduce the decrease of revenues in that sector. In 2014: • an Internet payment platform was activated, making it possible to pay the RTV subscription charge online; • postal orders and money express were activated; • the handling of cross-border cash transfers was extended thanks to initiating cooperation with RIA, an international network; • the network of currency exchange bureaus at post offices was dynamically developed, offering currency exchange services at more than 800 of them. By the end of 2014, conventional financial services were sold at all post offices.

Commerce and philately Thanks to changes regarding the offer and the development of Self-Service Commercial Zones, the company’s revenues from commercial activity increased by 21% in comparison with 2013. The sale of philatelic materials on the Internet increased by more than 60%. Commercial activity In 2014, the revenues of Poczta Polska S.A. generated by its commercial activity at post offices and via its online shop increased by more than 21% in comparison with 2013 and the revenues generated by selling press increased by more than 30%. Poczta Polska S.A. managed to achieve such good performance in spite of the difficult situation on the press market. Good sales performance results from, among other things, a new mode of displaying newspapers and magazines at post offices, active sales management, and making use of the scale effect by means of concluding an agreement with one supplier for all of Poland. Press sold by the company is delivered to 280 Self-Service Commercial Zones and almost 2 thousand new display areas for goods at post offices.

In 2014, Poczta Polska extended the selection of press publications offered. There are foreign magazines and newspapers on offer at some post offices, particularly those located near the border between Poland and Germany. Striving to ensure that customers have access to an appealingly displayed range of commercial goods and to reduce handling time at the post office, Poczta Polska S.A. opened 140 Self-Service Commercial Zones at its post offices. Currently, a total of 280 such zones make press, office supplies, envelopes, special occasion postcards, publications, products for children, and packaging materials available to customers. Work on extending the range of products offered resulted in introducing completely new product assortments into circulation such as publications, including best-selling books - this was particularly appreciated by customers. Thanks to its sales network, Poczta Polska S.A. was able to start competing with entities which have already managed to make a name for themselves on the market. Philately FPhilately is an important aspect of Poczta Polska S.A. activity, combining the popularization of culture, an element of the company’s mission, and recording and documenting events and anniversaries which are the most important for Poles with strictly commercial functions thanks to which issuing stamps is an additional source of income for the company. Philately e-shop is becoming more and more popular. Sales of philately materials have increased by 50% (10% of which are orders from foreign customers). Every month, several hundred accounts are created by new customers. The company’s philatelic activity was based on issuing stamps and other philately materials for special occasions. Issue plan for postal stamps in 2014 included 37 themes presented on 102 stamps, including: 86 standalone stamps, 12 stamps in a block, 4 stamps with tags. In addition to retail sale, Poczta Polska S.A. also makes it possible for its customers to purchase all philately materials issued in a given calendar years as part of a philately subscription charge. This service is available at post offices and via the online philately shop.

37

Insurance services 2014 was another year of dynamic development of the sales of insurance services within the network of Poczta Polska S.A. Thanks to the introduction of more and more insurance products, such as transport insurance policies civil liability, coverage, assistance, and casualty insurance, as well as property insurance: house or apartment insurance policies - which Poczta Polska S.A. offers to its customers, the expansion of Poczta Polska Group onto the insurance market is becoming more and more evident and its sales network continues to develop. Close to the end of 2014, it was possible for customers of Poczta Polska S.A. to purchase insurance products at more than 500 special customer service points (Postal Financial Zones), at other points within the network of Poczta Polska S.A., and from more than 8 000 licensed insurance agents. In 2014, Poczta Polska S.A. started selling insurance using mobile devices with which postmen were equipped. The sales process was simplified by this. At the same time, Poczta Polska S.A. commenced with activity aimed at increasing the competence of its sales employees. As a result of this, sales within the network of PFZ in 2014 increased by 79% in comparison with 2013. Banking services Poczta Polska S.A., as a result of its strategic cooperation with Bank Pocztowy S.A., systematically takes steps aimed at increasing its revenue from the sale of banking products. In comparison with 2013, Poczta Polska S.A. increased its revenues generated by banking services by almost 35% in 2014. The company’s range of banking products in 2014 included the following types of products: • settlement accounts (AlwaysFree Postal Account, Standard Account, and Nestor Account), • savings accounts (Savings Postal Account, New Savings Account), • fixed-term deposit accounts, • consumer credit (including cash loan for employees of work places with reduced credit risk (ZOR), cash loan prepared especially for the elderly, cash loans for other retail customers, as well as revolving credit as part of the current account).

36

Annual Report 2014

Conventional financial services Poczta Polska S.A. and Bank Pocztowy S.A. systematically increase the number of customers making use of their banking products. By the end of 2014, the total number of customers amounted to 1 447 thousand. This proves that the policy regarding changes to the product range is effective. In 2014, sales activity related to consumer credits also developed dynamically within the network of Poczta Polska S.A. As far as loans are concerned, Bank Pocztowy introduced an interesting consolidation offer and a loan called Always the Lowest Rate which makes it possible for customers, on the basis of an informational document from a competitive bank, to obtain lower price-related parameters for their loan. Thanks to synergy between entities belonging to Poczta Polska Group, it was possible to propose loyalty programmes to owners of settlement accounts enabling them to reap the benefits connected with actively using the products and services of the Group. Examples of such programmes: • Postal Package Programme - customers are reimbursed for 10% of expenses borne on selected postal services of Poczta Polska S.A. (mostly packages and letters); • Postal Insurance Programme - customers are reimbursed for 10% of insurance premiums they pad using their settlement account with Bank Pocztowy S.A. as part of policies concluded with Pocztowe Towarzystwo Ubezpieczeń Wzajemnych and as part of co-insurance with Sopockie Towarzystwo Ubezpieczeń Ergo Hestia S.A.; • Pay by link Envelo - customers are reimbursed for 10% of the amount they spent on Envelo products via the pay by ling functionality using their account with Bank Pocztowy S.A. Close to the end of 2014, it was possible for customers to purchase banking products at more than 500 special customer service points (Postal Financial Zones) and at other points within the network of Poczta Polska S.A. Easily accessible and modernised sales network as well as simple and commonly available banking products will form the basis for the stable development of the sales of banking services in the years to come.

In 2014, Poczta Polska S.A. minimised the decrease of revenues generated by conventional financial services by means of modifying the services it rendered. Thanks to this, the company managed to considerably reduce the decrease of revenues in that sector. In 2014: • an Internet payment platform was activated, making it possible to pay the RTV subscription charge online; • postal orders and money express were activated; • the handling of cross-border cash transfers was extended thanks to initiating cooperation with RIA, an international network; • the network of currency exchange bureaus at post offices was dynamically developed, offering currency exchange services at more than 800 of them. By the end of 2014, conventional financial services were sold at all post offices.

Commerce and philately Thanks to changes regarding the offer and the development of Self-Service Commercial Zones, the company’s revenues from commercial activity increased by 21% in comparison with 2013. The sale of philatelic materials on the Internet increased by more than 60%. Commercial activity In 2014, the revenues of Poczta Polska S.A. generated by its commercial activity at post offices and via its online shop increased by more than 21% in comparison with 2013 and the revenues generated by selling press increased by more than 30%. Poczta Polska S.A. managed to achieve such good performance in spite of the difficult situation on the press market. Good sales performance results from, among other things, a new mode of displaying newspapers and magazines at post offices, active sales management, and making use of the scale effect by means of concluding an agreement with one supplier for all of Poland. Press sold by the company is delivered to 280 Self-Service Commercial Zones and almost 2 thousand new display areas for goods at post offices.

In 2014, Poczta Polska extended the selection of press publications offered. There are foreign magazines and newspapers on offer at some post offices, particularly those located near the border between Poland and Germany. Striving to ensure that customers have access to an appealingly displayed range of commercial goods and to reduce handling time at the post office, Poczta Polska S.A. opened 140 Self-Service Commercial Zones at its post offices. Currently, a total of 280 such zones make press, office supplies, envelopes, special occasion postcards, publications, products for children, and packaging materials available to customers. Work on extending the range of products offered resulted in introducing completely new product assortments into circulation such as publications, including best-selling books - this was particularly appreciated by customers. Thanks to its sales network, Poczta Polska S.A. was able to start competing with entities which have already managed to make a name for themselves on the market. Philately FPhilately is an important aspect of Poczta Polska S.A. activity, combining the popularization of culture, an element of the company’s mission, and recording and documenting events and anniversaries which are the most important for Poles with strictly commercial functions thanks to which issuing stamps is an additional source of income for the company. Philately e-shop is becoming more and more popular. Sales of philately materials have increased by 50% (10% of which are orders from foreign customers). Every month, several hundred accounts are created by new customers. The company’s philatelic activity was based on issuing stamps and other philately materials for special occasions. Issue plan for postal stamps in 2014 included 37 themes presented on 102 stamps, including: 86 standalone stamps, 12 stamps in a block, 4 stamps with tags. In addition to retail sale, Poczta Polska S.A. also makes it possible for its customers to purchase all philately materials issued in a given calendar years as part of a philately subscription charge. This service is available at post offices and via the online philately shop.

37

Thanks to the service, it is possible to collect clean and stamped postal stamps, postcards with imprinted postal fee information, First Date Cover envelopes, and special occasion date stamps. In 2014, Poczta Polska S.A. continued to offer the MySTAMP service introduced in 2013, making it possible to create an individualised postal fee stamp and thus offering a unique way of advertising one’s brand, products, and services. MySTAMP is popular with customers, resulting in growing revenues and continued development of the service. Among philately services offered in 2014, imprints on personalised stamps with tag (which is, at the same time, a token of postal fee) are still popular. It allows customization of stamps in an appealing way, making it possible to make company correspondence or special occasion invitations truly unique.

Among many interesting philately issues in 2014, the following are the most interesting: two issues issued in cooperation between Poland and Vatican on the occasion of canonization of two grand Popes - an unprecedented event. A veritable philately gem - due to its three forms of publication (two using offset printing and one using steel engraving) and due to using microprinting - is the “Canonization of John Paul II”. Every stamp contains a depiction of John Paul II. The halo around his head is formed by microprinted inscriptions in seven lines - the most important Papal addresses from his teachings and speeches; “Gold Medallists of the World Men’s Volleyball Championship 2014” is an issue which was published less than 4 weeks after the final match at the Katowice Spodek and after the Polish team won the title of worldwide volleyball champions; the “70th anniversary of the outbreak of the Warsaw Uprising” issue, commemorating the Uprising and thousands of unknown young people who came to symbolise valour and determination in struggling for freedom.

38

Annual Report 2014

Key accounts and contracts In 2014, the company concluded a total of 33 909 agreements with business and private customers. Poczta Polska S.A. provides services to major entities from the commercial sector, including telecommunication companies, banks, and energy suppliers, as well as public administration bodies. In 2014, business partners decided to start cooperation with Poczta Polska S.A. due to its credibility, the availability and size of its network of offices, the professionalism of its employees, its logistical network, and its versatile offer with attractive prices. Availability of modern services rendered by other entities belonging to Poczta Polska Group in addition to conventional postal and financial services was an additional advantage.

In a time of common e-substitution and of decreasing volumes of conventional parcels handled, the company needed to enter new business areas in 2014 in order to keep developing. A service, introduced in December 2014, consisting in reading the indications of gas meters, water meters, and electricity meters is an example of such new services. Tenders won, including one for reading has meters for Polska Spółka Gazownictwa, confirm that the new offer is appreciated.

39

Thanks to the service, it is possible to collect clean and stamped postal stamps, postcards with imprinted postal fee information, First Date Cover envelopes, and special occasion date stamps. In 2014, Poczta Polska S.A. continued to offer the MySTAMP service introduced in 2013, making it possible to create an individualised postal fee stamp and thus offering a unique way of advertising one’s brand, products, and services. MySTAMP is popular with customers, resulting in growing revenues and continued development of the service. Among philately services offered in 2014, imprints on personalised stamps with tag (which is, at the same time, a token of postal fee) are still popular. It allows customization of stamps in an appealing way, making it possible to make company correspondence or special occasion invitations truly unique.

Among many interesting philately issues in 2014, the following are the most interesting: two issues issued in cooperation between Poland and Vatican on the occasion of canonization of two grand Popes - an unprecedented event. A veritable philately gem - due to its three forms of publication (two using offset printing and one using steel engraving) and due to using microprinting - is the “Canonization of John Paul II”. Every stamp contains a depiction of John Paul II. The halo around his head is formed by microprinted inscriptions in seven lines - the most important Papal addresses from his teachings and speeches; “Gold Medallists of the World Men’s Volleyball Championship 2014” is an issue which was published less than 4 weeks after the final match at the Katowice Spodek and after the Polish team won the title of worldwide volleyball champions; the “70th anniversary of the outbreak of the Warsaw Uprising” issue, commemorating the Uprising and thousands of unknown young people who came to symbolise valour and determination in struggling for freedom.

38

Annual Report 2014

Key accounts and contracts In 2014, the company concluded a total of 33 909 agreements with business and private customers. Poczta Polska S.A. provides services to major entities from the commercial sector, including telecommunication companies, banks, and energy suppliers, as well as public administration bodies. In 2014, business partners decided to start cooperation with Poczta Polska S.A. due to its credibility, the availability and size of its network of offices, the professionalism of its employees, its logistical network, and its versatile offer with attractive prices. Availability of modern services rendered by other entities belonging to Poczta Polska Group in addition to conventional postal and financial services was an additional advantage.

In a time of common e-substitution and of decreasing volumes of conventional parcels handled, the company needed to enter new business areas in 2014 in order to keep developing. A service, introduced in December 2014, consisting in reading the indications of gas meters, water meters, and electricity meters is an example of such new services. Tenders won, including one for reading has meters for Polska Spółka Gazownictwa, confirm that the new offer is appreciated.

39

Improving the quality of services rendered Maintaining high levels of customer satisfaction and ensuring prompt delivery of parcels.

Poczta Polska S.A. systematically monitors the quality of services in terms of promptness of parcel delivery.

Improving the level of satisfaction of the company’s customers was one of the basic strategic objectives of the Poczta Polska S.A. Thanks to systematic market analysis and customer analysis, the company obtains customer opinions about the quality of services rendered.

In 2014, the mechanization project of distribution and sorting centres (WER) aimed at improving the efficiency of letter sorting was completed.

Tracking of parcels sent via registered mail is possible both in Poland and abroad on the basis of IT systems. Qualitative indicators of Poczta Polska S.A. pertaining to delivery time and data transmission for PRIME international packages and letters shipped to Poland for delivery are at 95%. For EMS courier parcels, the promptness indicator for handling orders was 99.4%. Thanks to this, Poczta Polska S.A. was nominated for the “EMS Customer Service Office 2014” international award. Customers can also check the delivery status of all parcels and courier parcels and letters sent via registered mail on their own at www.poczta-polska.pl and can make comments and queries via the hotline. In 2014, the functionality of the system was further extended by means of making it possible to track parcels sent via registered mail and letters with declared value sent abroad and received from abroad. Also in 2014, Poczta Polska S.A. introduced a new and convenient mode of making complaints in the electronic form via www.ereklamacje.poczta-polska.pl. A system for serving customers using international services was also initiated, making it possible to, inter alia, process queries and complaints 100% online as part of a Global Customer Service System. The Rapid Response Procedure, aimed at enhancing the quality of customer services, also by means of reducing handling time, was improved at post offices in 2014. The results of research into customer satisfaction with handling time at post offices indicate that the relevant satisfaction level indicator increased from 82% in 2013 to 21) 89% in 2014. Research into customer satisfaction level indicates that, in 2014, the indicator of customer satisfaction with the necessary waiting time at Poczta Polska S.A. offices also 22) systematically improved - it reached 88% in the fourth quarter of 2014.

Compliance with statutory requirements pertaining to the promptness of performance of universal services, correspondence confidentiality, safety of postal circulation, and availability of the postal network, as well as compliance with certain standards consistent with customer expectations and agreements concluded are all taken into account when assessing the quality of Poczta Polska S.A.’s offer. The quality of service at post offices is particularly important to private customers.

40

Annual Report 2014

8 cutting-edge sorting machines were added to the logistical system of Poczta Polska S.A. Such a major change regarding a crucial system of Poczta Polska S.A. was connected with a risk of temporary interruption to the flow of parcels. However, the smooth introduction of new machines made it possible to avoid any major interference with the logistical process and to minimise the impact of technological changes on indicators of promptness of parcel delivery.

The average statistical waiting time before being served at a postal office was shortened from 3.2 minutes in 2012 to 23) 2.1 minutes in 2014. This change was possible thanks to, among other things, supplementation of the network of post offices in cities and a change of their work organisation, as well as thanks to the introduction and widespread implementation of a number of facilitations for customers. Customers appreciated activation of Self-Service Commercial Zones, self-service devices, the Electronic Sender (enabling customers to enter data regarding parcels to be shipped online), and services available as part of the Envelo platform (particularly the neostamp service).

Sales network development Development of the network of offices The network of post offices remains one of the most important assets of Poczta Polska S.A. and has a major impact on its competitive position on the postal services market. Poczta Polska S.A. pursues its business activity using more than 7 500 offices (data as at 31 December 2014). In 2014, Poczta Polska S.A. continued implementing changes regarding its network of offices, taking advantage of the potential of the market, including local markets. This was directly translated into an improvement of the availability of postal services and the quality of customer service and, at the same time, an improvement of the profitability of the network of offices. Gradually decreasing demand for conventional letter and financial services required that the level of profitability be continuously monitored and that the function of offices and their location be adjusted to what is needed in view of what the customers need and in order to improve the quality of service. If local considerations so required, the network of Poczta Polska S.A. was also supplemented with new (additional) customer service points.

21)

source: Summary report regarding surveys among Poczta Polska S.A. customers conducted at selected offices of Poczta Polska S.A. in 2013 and 2014. 22) source: Summary report regarding surveys among Poczta Polska S.A. customers conducted at selected offices of Poczta Polska S.A. in 2013 and 2014. 23) source: A study into customer service level conducted using the Mystery Consumer method, Poczta Polska S.A.

41

Improving the quality of services rendered Maintaining high levels of customer satisfaction and ensuring prompt delivery of parcels.

Poczta Polska S.A. systematically monitors the quality of services in terms of promptness of parcel delivery.

Improving the level of satisfaction of the company’s customers was one of the basic strategic objectives of the Poczta Polska S.A. Thanks to systematic market analysis and customer analysis, the company obtains customer opinions about the quality of services rendered.

In 2014, the mechanization project of distribution and sorting centres (WER) aimed at improving the efficiency of letter sorting was completed.

Tracking of parcels sent via registered mail is possible both in Poland and abroad on the basis of IT systems. Qualitative indicators of Poczta Polska S.A. pertaining to delivery time and data transmission for PRIME international packages and letters shipped to Poland for delivery are at 95%. For EMS courier parcels, the promptness indicator for handling orders was 99.4%. Thanks to this, Poczta Polska S.A. was nominated for the “EMS Customer Service Office 2014” international award. Customers can also check the delivery status of all parcels and courier parcels and letters sent via registered mail on their own at www.poczta-polska.pl and can make comments and queries via the hotline. In 2014, the functionality of the system was further extended by means of making it possible to track parcels sent via registered mail and letters with declared value sent abroad and received from abroad. Also in 2014, Poczta Polska S.A. introduced a new and convenient mode of making complaints in the electronic form via www.ereklamacje.poczta-polska.pl. A system for serving customers using international services was also initiated, making it possible to, inter alia, process queries and complaints 100% online as part of a Global Customer Service System. The Rapid Response Procedure, aimed at enhancing the quality of customer services, also by means of reducing handling time, was improved at post offices in 2014. The results of research into customer satisfaction with handling time at post offices indicate that the relevant satisfaction level indicator increased from 82% in 2013 to 21) 89% in 2014. Research into customer satisfaction level indicates that, in 2014, the indicator of customer satisfaction with the necessary waiting time at Poczta Polska S.A. offices also 22) systematically improved - it reached 88% in the fourth quarter of 2014.

Compliance with statutory requirements pertaining to the promptness of performance of universal services, correspondence confidentiality, safety of postal circulation, and availability of the postal network, as well as compliance with certain standards consistent with customer expectations and agreements concluded are all taken into account when assessing the quality of Poczta Polska S.A.’s offer. The quality of service at post offices is particularly important to private customers.

40

Annual Report 2014

8 cutting-edge sorting machines were added to the logistical system of Poczta Polska S.A. Such a major change regarding a crucial system of Poczta Polska S.A. was connected with a risk of temporary interruption to the flow of parcels. However, the smooth introduction of new machines made it possible to avoid any major interference with the logistical process and to minimise the impact of technological changes on indicators of promptness of parcel delivery.

The average statistical waiting time before being served at a postal office was shortened from 3.2 minutes in 2012 to 23) 2.1 minutes in 2014. This change was possible thanks to, among other things, supplementation of the network of post offices in cities and a change of their work organisation, as well as thanks to the introduction and widespread implementation of a number of facilitations for customers. Customers appreciated activation of Self-Service Commercial Zones, self-service devices, the Electronic Sender (enabling customers to enter data regarding parcels to be shipped online), and services available as part of the Envelo platform (particularly the neostamp service).

Sales network development Development of the network of offices The network of post offices remains one of the most important assets of Poczta Polska S.A. and has a major impact on its competitive position on the postal services market. Poczta Polska S.A. pursues its business activity using more than 7 500 offices (data as at 31 December 2014). In 2014, Poczta Polska S.A. continued implementing changes regarding its network of offices, taking advantage of the potential of the market, including local markets. This was directly translated into an improvement of the availability of postal services and the quality of customer service and, at the same time, an improvement of the profitability of the network of offices. Gradually decreasing demand for conventional letter and financial services required that the level of profitability be continuously monitored and that the function of offices and their location be adjusted to what is needed in view of what the customers need and in order to improve the quality of service. If local considerations so required, the network of Poczta Polska S.A. was also supplemented with new (additional) customer service points.

21)

source: Summary report regarding surveys among Poczta Polska S.A. customers conducted at selected offices of Poczta Polska S.A. in 2013 and 2014. 22) source: Summary report regarding surveys among Poczta Polska S.A. customers conducted at selected offices of Poczta Polska S.A. in 2013 and 2014. 23) source: A study into customer service level conducted using the Mystery Consumer method, Poczta Polska S.A.

41

A new model of the network was implemented in order to propose an integrated product offer of Poczta Polska Group to customer and to convert post offices into modern sales points, sporting new visual image, new equipment, and new interior design. The transformation process of offices is combined with a process for creating new offices and exchanging the existing locations with ones more convenient to customers - shopping malls and new residential areas. After such changes, post offices become more friendly for customers and make it easier for them to make use of an extensive product range. By the end of 2014, there were 204 post offices functioning according to the new-model network. The network of Poczta Polska is, as of now, the largest postal network using one sales system and it is suitable for sending and receiving parcels and proposing an integrated selection of Poczta Polska Group services to customers; this is unique on the market. As at the end of 2014, Poczta Polska had 7 500 offices. Striving to ensure proper customer service standard - a goal which is essential if the strategic objectives of the company are to be achieved - Poczta Polska S.A., in addition to continuing the process for restructuring its offices, started a process for making its offices uniform in business terms and in terms of customer service standards. Unification of customer service standards was one of the types of activity carried out as part of modifying the service and commercial areas of post offices. In 2014, the process for shaping the network of offices was initiated. Its essence was to introduce new standards meeting the needs and expectations of customers in an optimum way both in terms of products offered and in terms of the quality of service provision.

42

Annual Report 2014

Poczta Polska deems it essential to win a competitive edge on the market by means of ensuring that postal services are made available to as many different consumer groups as possible. By the end of 2014, 300 post offices were modified according to that model. Poczta Polska S.A., by renovating and modernising the network of its offices, improves the quality of customer service and, at the same time, adjusts its offices to the needs of customer, including the disabled. The entire network of Poczta Polska S.A. offices is consistent with statutory requirements pertaining to adjusting them to the basic needs of the disabled. The company nevertheless strives to improve its standard of customer service for disabled customers. Such activity is appreciated by Fundacja Integracja - one of the largest Polish organisations occupying itself with the life of people with disabilities. On the basis of architectural audits conducted, experts in integration of the disabled awarded Poczta Polska with certificates confirming adjustment to the needs of the disabled - 23 post offices of Poczta Polska received such “without barriers” (”bez barier”) certificates.

As a result of the company’s striving to meet the needs of customer, in 2014 within the network of Poczta Polska: • the number of automated, round-the-clock self-service zones continued to systematically increase. By the end of that year, customers in Poland had at their disposal 39 self-service zones, open round-the-clock. The scope of services and functionalities available at such zones is also being extended, • the number of self-service commercial zones increased. The number of such zones at post offices increased by 140 in 2014. As of now, there are 280 self-service commercial zones, • the number of points especially designated for selling insurance and banking products increased. As of now, there are 800 such points, • more than 3 000 employees were trained in insurance intermediation. More than 8 000 employees already have the right to sell insurance products, • further 424 currency exchange bureaus were opened. Customers now have 811 such bureaus at their disposal.

Making the network available for administrative services Poczta Polska S.A., diversifying its business activity, made the network of its offices available also to public administration services, being the obvious choice of partner for rendering services to the general public. In 2014, the company, actively playing its part of an intermediary between the people, the digital world, and public administration, started several pilot projects. Social Insurance Institution Machines (ZUSomaty) Those are a multi-purpose, self-service informational devices forming a part of ZUS Electronic Service Platform. They were installed at selected post offices in Gdańsk, Lublin, Opole, Rzeszów, and Warszawa. Using such machines, the customers are able, at a post office, to, among other things, submit a hard copy of any document and application from within the scope of activity of ZUS, including insurance documents, and receive a confirmation of its delivery; make use of ZUS informational services, particularly the Electronic Service Platform (ESP) and its functionalities; trusted profile confirmation trusted profile is a free-of-charge method of citizen verification as part of e-government system (including ePUAP, CEIDG, and ZUS). Thanks to it, a citizen may handle administrative affairs electronically, by signing in on www.epuap.gov.pl. In order to make use of this solution, one has to confirm one’s trusted profile. This can be done at Poczta Polska S.A. chosen for this pilot programme; identity cards from a post office as part of a pilot cooperation programme with local government administration in Lublin, citizens were allowed to submit applications for identity cards at post offices. Those projects will be continued in 2015.

43

A new model of the network was implemented in order to propose an integrated product offer of Poczta Polska Group to customer and to convert post offices into modern sales points, sporting new visual image, new equipment, and new interior design. The transformation process of offices is combined with a process for creating new offices and exchanging the existing locations with ones more convenient to customers - shopping malls and new residential areas. After such changes, post offices become more friendly for customers and make it easier for them to make use of an extensive product range. By the end of 2014, there were 204 post offices functioning according to the new-model network. The network of Poczta Polska is, as of now, the largest postal network using one sales system and it is suitable for sending and receiving parcels and proposing an integrated selection of Poczta Polska Group services to customers; this is unique on the market. As at the end of 2014, Poczta Polska had 7 500 offices. Striving to ensure proper customer service standard - a goal which is essential if the strategic objectives of the company are to be achieved - Poczta Polska S.A., in addition to continuing the process for restructuring its offices, started a process for making its offices uniform in business terms and in terms of customer service standards. Unification of customer service standards was one of the types of activity carried out as part of modifying the service and commercial areas of post offices. In 2014, the process for shaping the network of offices was initiated. Its essence was to introduce new standards meeting the needs and expectations of customers in an optimum way both in terms of products offered and in terms of the quality of service provision.

42

Annual Report 2014

Poczta Polska deems it essential to win a competitive edge on the market by means of ensuring that postal services are made available to as many different consumer groups as possible. By the end of 2014, 300 post offices were modified according to that model. Poczta Polska S.A., by renovating and modernising the network of its offices, improves the quality of customer service and, at the same time, adjusts its offices to the needs of customer, including the disabled. The entire network of Poczta Polska S.A. offices is consistent with statutory requirements pertaining to adjusting them to the basic needs of the disabled. The company nevertheless strives to improve its standard of customer service for disabled customers. Such activity is appreciated by Fundacja Integracja - one of the largest Polish organisations occupying itself with the life of people with disabilities. On the basis of architectural audits conducted, experts in integration of the disabled awarded Poczta Polska with certificates confirming adjustment to the needs of the disabled - 23 post offices of Poczta Polska received such “without barriers” (”bez barier”) certificates.

As a result of the company’s striving to meet the needs of customer, in 2014 within the network of Poczta Polska: • the number of automated, round-the-clock self-service zones continued to systematically increase. By the end of that year, customers in Poland had at their disposal 39 self-service zones, open round-the-clock. The scope of services and functionalities available at such zones is also being extended, • the number of self-service commercial zones increased. The number of such zones at post offices increased by 140 in 2014. As of now, there are 280 self-service commercial zones, • the number of points especially designated for selling insurance and banking products increased. As of now, there are 800 such points, • more than 3 000 employees were trained in insurance intermediation. More than 8 000 employees already have the right to sell insurance products, • further 424 currency exchange bureaus were opened. Customers now have 811 such bureaus at their disposal.

Making the network available for administrative services Poczta Polska S.A., diversifying its business activity, made the network of its offices available also to public administration services, being the obvious choice of partner for rendering services to the general public. In 2014, the company, actively playing its part of an intermediary between the people, the digital world, and public administration, started several pilot projects. Social Insurance Institution Machines (ZUSomaty) Those are a multi-purpose, self-service informational devices forming a part of ZUS Electronic Service Platform. They were installed at selected post offices in Gdańsk, Lublin, Opole, Rzeszów, and Warszawa. Using such machines, the customers are able, at a post office, to, among other things, submit a hard copy of any document and application from within the scope of activity of ZUS, including insurance documents, and receive a confirmation of its delivery; make use of ZUS informational services, particularly the Electronic Service Platform (ESP) and its functionalities; trusted profile confirmation trusted profile is a free-of-charge method of citizen verification as part of e-government system (including ePUAP, CEIDG, and ZUS). Thanks to it, a citizen may handle administrative affairs electronically, by signing in on www.epuap.gov.pl. In order to make use of this solution, one has to confirm one’s trusted profile. This can be done at Poczta Polska S.A. chosen for this pilot programme; identity cards from a post office as part of a pilot cooperation programme with local government administration in Lublin, citizens were allowed to submit applications for identity cards at post offices. Those projects will be continued in 2015.

43

DEVELOPMENT PERSPECTIVES AND GOALS OF POCZTA POLSKA UNTIL 2020 44

Annual Report 2014

As e-substitution already touches most areas of human life and communication, we have grown accustomed to fast digital forms of contact. However, nothing as of yet can replace the sending of a postal package.

45

DEVELOPMENT PERSPECTIVES AND GOALS OF POCZTA POLSKA UNTIL 2020 44

Annual Report 2014

As e-substitution already touches most areas of human life and communication, we have grown accustomed to fast digital forms of contact. However, nothing as of yet can replace the sending of a postal package.

45

e-commerce

DEVELOPMENT PERSPECTIVES AND GOALS OF POCZTA POLSKA UNTIL 2020 Key market tendencies in the years to come The future of Poczta Polska is shaped by dynamic tendencies affecting the business environment of the company and its ability to react to changing purchasing habits and attitudes of customers. The strategy of Poczta Polska was prepared in response to key tendencies regarding technology, legal regulations, economy, and socio-cultural life. Digitization One of the tendencies having the greatest impact on the postal market and the future of Poczta Polska is the, broadly understood, digitization of the society. In 2014, 24) 74% of Poles had access to the Internet , 25% of them 25) owned a smartphone , and more than half of them shopped online. In the years to come, further spreading of digital communication tools is to be expected, as well as greater availability of broadband Internet and an even deeper penetration of all consumer behaviours by cutting-edge technologies. At the same time, a significant portion of the Polish society remains firmly attached to conventional modes of communication. They will gradually start using new technological solutions and this process will require educational and organisational support, e.g. in the form of making available a physical network of Internet access points and access to online services with the assistance of properly qualified advisers. e-substitution Digitization causes e-substitution which, in turn, results in decreasing volumes of conventional letter services (i.e. paper-based letters) and financial services (cash transfers and transfers of cash to a bank account). The global effect of e-substitution was a 5% decrease of the average annual 26) volume of letters handled by leading postal operators. As of now, e-substitution is on the rise in Poland, its level reaching 10% per annum. It is assumed that it will not slow its pace until 2020 - this means that the value of the market of conventional correspondence will drop to circa PLN 1.8 billion.

E-substitution has a lesser impact on advertising communication. The market of advertising parcels, thanks to the relations between direct mail tools and electronic means of communication becoming stronger and stronger, will increase every year by an average of 2.5% 27) to reach a value of almost PLN 400 million by 2020. The Internet advertising market will develop dynamically until 2020. The average annual increase of the value of Internet advertising in the period from 2013 to 2020 will be 10% and the value of this sector of the market will be 28) PLN 4.7 billion. e-services Factors threatening conventional letter services are actually positive for the development of e-services. Digitization, the social tendency to handle more and more matters online, progressing informatization of the society, and, most importantly, the ever-increasing significance of multi-channel communication are the main factors rendering e-services more and more popular. An important catalyst of development in this area is the policy of the European Union and Poland with regard to promoting e-government services and electronic communication as part of relations between citizens and the state. The fact that the Polish society is differentiated in terms of, inter alia, access to public services and the level of digital awareness makes it possible for Poczta Polska to take up a mission of countering digital exclusion within the society, in a manner similar to what is happening in other European countries. Poczta Polska has predispositions to play that part as it has been appointed the designated operator for providing universal services until 2025.

Annual Report 2014

Globalization The ties binding the Polish market to the economy of the world, particularly to markets within the European Union, are becoming stronger. This will have a positive impact on the Polish economy and the international trading of goods and services. In 2014, the volume of export of goods from Poland increased by 5.2%, reaching EUR 163.1 billion, while the value of import was EUR 165.6 billion, an 34) increase of 5.5% in comparison with 2013. It is expected that such a rate of growth will at least be 35) maintained in the years to come. The development of cross-border trading and the internationalization of markets result in a need to quickly access goods produced in other countries - this will have a positive impact on further growth of the international parcel sector (up to 20% per year). A good indicator of the significance of this sector is the growing popularity among Poles of ordering goods online from shops abroad - 13% 36) of Poles made such a purchase this year. Globalization will also have an impact on the way in which competitiveness develops in various segments of the market and will result in fast spreading of new technologies and innovative solutions. This will reduce competitive advantage based on unique technological solutions.

Requirements regarding safety, promptness, and speed of services rendered by service providers will also grow and consumers will be less loyal to specific brands. Customers will also want to take a more active part in product development and will expect individualised communication and services. Whether or not a service provider operates on the basis of a transparent system of values will be more and more important for consumer decisions and consumers will pay more attention to CSR activities. Tendencies regarding financial services As a result of e-substitution, the market of conventional financial services will keep diminishing in size until 2020. Money transfers via the Internet will become more and more common, particularly transfers ordered using mobile devices. This will make the society less inclined to pay bills by means of a conventional money transfer. Due to the fact that the society makes use of more and more banking services, the volume of money transfers as part of pensions and disability pensions ordered by ZUS will also decrease. At the same time, the market of insurance and banking services will steadily develop until 2020. The average annual increase of the value of the banking services market in that period will be 5%; as for the 37) insurance market, the same indicator will be 4%. Tendencies connected with consolidation of the industry will affect both of those sectors of economy. Channels for remote customer services and remote sales will continue to develop until 2020. At the same time, the market potential of Poles not using banking services will determine the possibility of dynamic growth for entities operating in less urbanized areas.

Consumer behaviour 29)

24) 25) 26) 27) 28)

46

Digitization results in changes regarding consumer behaviours and in customers being more and more inclined to purchase goods online - 64% of Poles shopped 29) online in 2014. The e-commerce sector constitutes, as 30) of now, 2.8% of all retail trading in Poland. The stable growth of the e-commerce sector in Poland at an average annual value of 15% will not change until 2020. It is estimated that by 2020 the value of the e-commerce 31) market in Poland will have grown to PLN 55-90 billion. The stable economic situation of Poland until 2020 and continuous economic growth, particularly in the e-commerce sector, are decisive for a prognosis regarding continuous development of the CEP market (average annual growth at +6%, estimated value in 2020; 32) PLN 6.6 billion ) and packaged goods logistics (average annual growth at +9%, estimated value in 2020; 33) PLN 9.5 billion ).

source: data based on a report by GUS: Information society in Poland in 2014 source: data based on a report by GUS: Information society in Poland in 2014 source: Achieving High Performance in the Postal Industry. Accenture Research and Insights 2014 own study based on UPU data own study based on IAB/PwC data

Comfort and ease of access to goods and services will have more and more impact on decisions made by consumers. This will result in customers assigning greater importance to the possibility of multi-channel communication ensured by entities operating on the market and to access to services, both as regards conventional goods and services and those available online.

30) 31) 32) 33) 34) 35) 36) 37)

IAB Polska digitalSCOPE, Q4’2014; buyers “during the last 6 months” IAB Polska digitalSCOPE, Q4’2014 based on a study: Internet commerce in Poland in 2014 and a prognosis by BCG own study based on data from PWC research for Poczta Polska S.A. own study based on market data source: Ministry of Economy, Assessment of the situation of cross-border trading in 2014 source: Ministry of Economy, Assessment of the situation of cross-border trading in 2014 source: e-commerce in Poland 2015, Gemius own study based on data from the Polish Financial Supervision Authority (KNF), NBP, Eurostat and trade data; http://pl.tradingeconomics.com

47

e-commerce

DEVELOPMENT PERSPECTIVES AND GOALS OF POCZTA POLSKA UNTIL 2020 Key market tendencies in the years to come The future of Poczta Polska is shaped by dynamic tendencies affecting the business environment of the company and its ability to react to changing purchasing habits and attitudes of customers. The strategy of Poczta Polska was prepared in response to key tendencies regarding technology, legal regulations, economy, and socio-cultural life. Digitization One of the tendencies having the greatest impact on the postal market and the future of Poczta Polska is the, broadly understood, digitization of the society. In 2014, 24) 74% of Poles had access to the Internet , 25% of them 25) owned a smartphone , and more than half of them shopped online. In the years to come, further spreading of digital communication tools is to be expected, as well as greater availability of broadband Internet and an even deeper penetration of all consumer behaviours by cutting-edge technologies. At the same time, a significant portion of the Polish society remains firmly attached to conventional modes of communication. They will gradually start using new technological solutions and this process will require educational and organisational support, e.g. in the form of making available a physical network of Internet access points and access to online services with the assistance of properly qualified advisers. e-substitution Digitization causes e-substitution which, in turn, results in decreasing volumes of conventional letter services (i.e. paper-based letters) and financial services (cash transfers and transfers of cash to a bank account). The global effect of e-substitution was a 5% decrease of the average annual 26) volume of letters handled by leading postal operators. As of now, e-substitution is on the rise in Poland, its level reaching 10% per annum. It is assumed that it will not slow its pace until 2020 - this means that the value of the market of conventional correspondence will drop to circa PLN 1.8 billion.

E-substitution has a lesser impact on advertising communication. The market of advertising parcels, thanks to the relations between direct mail tools and electronic means of communication becoming stronger and stronger, will increase every year by an average of 2.5% 27) to reach a value of almost PLN 400 million by 2020. The Internet advertising market will develop dynamically until 2020. The average annual increase of the value of Internet advertising in the period from 2013 to 2020 will be 10% and the value of this sector of the market will be 28) PLN 4.7 billion. e-services Factors threatening conventional letter services are actually positive for the development of e-services. Digitization, the social tendency to handle more and more matters online, progressing informatization of the society, and, most importantly, the ever-increasing significance of multi-channel communication are the main factors rendering e-services more and more popular. An important catalyst of development in this area is the policy of the European Union and Poland with regard to promoting e-government services and electronic communication as part of relations between citizens and the state. The fact that the Polish society is differentiated in terms of, inter alia, access to public services and the level of digital awareness makes it possible for Poczta Polska to take up a mission of countering digital exclusion within the society, in a manner similar to what is happening in other European countries. Poczta Polska has predispositions to play that part as it has been appointed the designated operator for providing universal services until 2025.

Annual Report 2014

Globalization The ties binding the Polish market to the economy of the world, particularly to markets within the European Union, are becoming stronger. This will have a positive impact on the Polish economy and the international trading of goods and services. In 2014, the volume of export of goods from Poland increased by 5.2%, reaching EUR 163.1 billion, while the value of import was EUR 165.6 billion, an 34) increase of 5.5% in comparison with 2013. It is expected that such a rate of growth will at least be 35) maintained in the years to come. The development of cross-border trading and the internationalization of markets result in a need to quickly access goods produced in other countries - this will have a positive impact on further growth of the international parcel sector (up to 20% per year). A good indicator of the significance of this sector is the growing popularity among Poles of ordering goods online from shops abroad - 13% 36) of Poles made such a purchase this year. Globalization will also have an impact on the way in which competitiveness develops in various segments of the market and will result in fast spreading of new technologies and innovative solutions. This will reduce competitive advantage based on unique technological solutions.

Requirements regarding safety, promptness, and speed of services rendered by service providers will also grow and consumers will be less loyal to specific brands. Customers will also want to take a more active part in product development and will expect individualised communication and services. Whether or not a service provider operates on the basis of a transparent system of values will be more and more important for consumer decisions and consumers will pay more attention to CSR activities. Tendencies regarding financial services As a result of e-substitution, the market of conventional financial services will keep diminishing in size until 2020. Money transfers via the Internet will become more and more common, particularly transfers ordered using mobile devices. This will make the society less inclined to pay bills by means of a conventional money transfer. Due to the fact that the society makes use of more and more banking services, the volume of money transfers as part of pensions and disability pensions ordered by ZUS will also decrease. At the same time, the market of insurance and banking services will steadily develop until 2020. The average annual increase of the value of the banking services market in that period will be 5%; as for the 37) insurance market, the same indicator will be 4%. Tendencies connected with consolidation of the industry will affect both of those sectors of economy. Channels for remote customer services and remote sales will continue to develop until 2020. At the same time, the market potential of Poles not using banking services will determine the possibility of dynamic growth for entities operating in less urbanized areas.

Consumer behaviour 29)

24) 25) 26) 27) 28)

46

Digitization results in changes regarding consumer behaviours and in customers being more and more inclined to purchase goods online - 64% of Poles shopped 29) online in 2014. The e-commerce sector constitutes, as 30) of now, 2.8% of all retail trading in Poland. The stable growth of the e-commerce sector in Poland at an average annual value of 15% will not change until 2020. It is estimated that by 2020 the value of the e-commerce 31) market in Poland will have grown to PLN 55-90 billion. The stable economic situation of Poland until 2020 and continuous economic growth, particularly in the e-commerce sector, are decisive for a prognosis regarding continuous development of the CEP market (average annual growth at +6%, estimated value in 2020; 32) PLN 6.6 billion ) and packaged goods logistics (average annual growth at +9%, estimated value in 2020; 33) PLN 9.5 billion ).

source: data based on a report by GUS: Information society in Poland in 2014 source: data based on a report by GUS: Information society in Poland in 2014 source: Achieving High Performance in the Postal Industry. Accenture Research and Insights 2014 own study based on UPU data own study based on IAB/PwC data

Comfort and ease of access to goods and services will have more and more impact on decisions made by consumers. This will result in customers assigning greater importance to the possibility of multi-channel communication ensured by entities operating on the market and to access to services, both as regards conventional goods and services and those available online.

30) 31) 32) 33) 34) 35) 36) 37)

IAB Polska digitalSCOPE, Q4’2014; buyers “during the last 6 months” IAB Polska digitalSCOPE, Q4’2014 based on a study: Internet commerce in Poland in 2014 and a prognosis by BCG own study based on data from PWC research for Poczta Polska S.A. own study based on market data source: Ministry of Economy, Assessment of the situation of cross-border trading in 2014 source: Ministry of Economy, Assessment of the situation of cross-border trading in 2014 source: e-commerce in Poland 2015, Gemius own study based on data from the Polish Financial Supervision Authority (KNF), NBP, Eurostat and trade data; http://pl.tradingeconomics.com

47

Development goals and perspectives of Poczta Polska S.A. for 2015

The strategy of Poczta Polska accepted by the Management Board in December 2014 is the company’s reaction to the changing business environment of the company and, most importantly, to a material increase of e-substitution of conventional letter services in Poland.

Poczta Polska Group will compensate for the unavoidable losses of revenues from conventional letter and financial services also by means of developing banking and insurance services, electronic services, advertising services, commercial activity, and network services.

The future of Poczta Polska S.A. is first and foremost related to the parcel and courier services sector whose necessary supplement are logistical services. The vision of Poczta Polska Group assumes that the entire e-customer value chain will be handled.

Factors having a decisive impact on the stable development of the Group and the company itself include the trust customers put in the brand and the possibility of multi-channel access to private customers. This makes Poczta Polska a unique intermediary between business partners and between private customers and state administration.

The number of private customers making use of Poczta Polska services because of its comprehensive offer and unique availability makes Poczta Polska an attractive partner for business customers.

Brand trust, comprehensive offer (including access to services rendered by other entities) and the multi-channel model of communication make Poczta Polska an attractive service provider for private customers.

Strategic objectives set for a period until 2017 include continued development of Poczta Polska Group profitability and an increase of customer satisfaction level. Assuming the customer’s perspective results in strategic changes regarding the company and provides it with a valid point of reference for determining whether or not its transformation was successful. This year is another year after the liberalisation of the postal market in Poland. Poland was the first country in Europe to organise a contest of the Office of Electronic Communications for choosing the operator for the next 10 years. This decision is important in view of the future of Poczta Polska S.A., particularly on the conventional communication market. Poczta Polska was awarded 210 (out of 220 possible) points in the contest. As far as business development is concerned Poczta Polska S.A. will, in 2015, take steps aimed at developing key business areas. The most important area for the development of the entire Poczta Polska Group and the company itself is CEP. The company’s priorities will include creating a value chain for e-commerce and adjusting its offer of courier and parcel services to the constant changes affecting the market. As far as letter services are concerned, Poczta Polska S.A. will face a major challenge connected with the tender for handling the correspondence of courts and prosecutor’s offices.

Factors affecting the development of Poczta Polska Group

One of the main objectives of Poczta Polska S.A. is developing banking and insurance services. This is why in 2015, using its well-developed financial services sales network, the company will take steps aimed at improving sales efficiency. The offer of banking and insurance services will be extended - life insurance from Pocztowe Towarzystwo Ubezpieczeń na Życie will be made available which will, in the long-term perspective, contribute to increasing the value of Poczta Polska Group. In 2015 Poczta Polska S.A. will develop the commercial activity within the network of its offices by means of developing self-service commercial zones and adjusting the range of products offered to the needs of customers. The planned increase of revenues from commercial activity will result in improved profitability of the network of offices. In 2015, the company will continue to intensively modernize its network of offices. By the end of 2015, it is planned that Poczta Polska S.A. customers will have around 330 post offices consistent with the new model of the network at their disposal.

MULTI-CHANNEL AVAILABILITY - the best physical, mobile, and Internet availability for private customers

HIGH EFFECTIVENESS AND EFFICIENCY OF THE ORGANISATION - processes and organisation optimized in terms of service provision to customers

UNIQUE KNOWLEDGE OF CUSTOMERS - we know the needs of our customers and the challenges they face CUSTOMER-FOCUSED ACTIVITY - we always act taking the customer’s perspective into account

FOR BUSINESS CUSTOMERS to private customers and small and medium-sized companies.

48

Annual Report 2014

POCZTA POLSKA IS THE ONLY OPERATOR TO OFFER safe, integrated, and multi-channel access for

PRIVATE CUSTOMERS to universal and mass services.

DEVELOPMENT OF PRODUCTS AND DISTRIBUTION CHANNELS - always taking the needs of customers into account

PROFILED OFFER FOR CUSTOMERS - simple and common offer for private customers, especially prepared offer for business customers

49

Development goals and perspectives of Poczta Polska S.A. for 2015

The strategy of Poczta Polska accepted by the Management Board in December 2014 is the company’s reaction to the changing business environment of the company and, most importantly, to a material increase of e-substitution of conventional letter services in Poland.

Poczta Polska Group will compensate for the unavoidable losses of revenues from conventional letter and financial services also by means of developing banking and insurance services, electronic services, advertising services, commercial activity, and network services.

The future of Poczta Polska S.A. is first and foremost related to the parcel and courier services sector whose necessary supplement are logistical services. The vision of Poczta Polska Group assumes that the entire e-customer value chain will be handled.

Factors having a decisive impact on the stable development of the Group and the company itself include the trust customers put in the brand and the possibility of multi-channel access to private customers. This makes Poczta Polska a unique intermediary between business partners and between private customers and state administration.

The number of private customers making use of Poczta Polska services because of its comprehensive offer and unique availability makes Poczta Polska an attractive partner for business customers.

Brand trust, comprehensive offer (including access to services rendered by other entities) and the multi-channel model of communication make Poczta Polska an attractive service provider for private customers.

Strategic objectives set for a period until 2017 include continued development of Poczta Polska Group profitability and an increase of customer satisfaction level. Assuming the customer’s perspective results in strategic changes regarding the company and provides it with a valid point of reference for determining whether or not its transformation was successful. This year is another year after the liberalisation of the postal market in Poland. Poland was the first country in Europe to organise a contest of the Office of Electronic Communications for choosing the operator for the next 10 years. This decision is important in view of the future of Poczta Polska S.A., particularly on the conventional communication market. Poczta Polska was awarded 210 (out of 220 possible) points in the contest. As far as business development is concerned Poczta Polska S.A. will, in 2015, take steps aimed at developing key business areas. The most important area for the development of the entire Poczta Polska Group and the company itself is CEP. The company’s priorities will include creating a value chain for e-commerce and adjusting its offer of courier and parcel services to the constant changes affecting the market. As far as letter services are concerned, Poczta Polska S.A. will face a major challenge connected with the tender for handling the correspondence of courts and prosecutor’s offices.

Factors affecting the development of Poczta Polska Group

One of the main objectives of Poczta Polska S.A. is developing banking and insurance services. This is why in 2015, using its well-developed financial services sales network, the company will take steps aimed at improving sales efficiency. The offer of banking and insurance services will be extended - life insurance from Pocztowe Towarzystwo Ubezpieczeń na Życie will be made available which will, in the long-term perspective, contribute to increasing the value of Poczta Polska Group. In 2015 Poczta Polska S.A. will develop the commercial activity within the network of its offices by means of developing self-service commercial zones and adjusting the range of products offered to the needs of customers. The planned increase of revenues from commercial activity will result in improved profitability of the network of offices. In 2015, the company will continue to intensively modernize its network of offices. By the end of 2015, it is planned that Poczta Polska S.A. customers will have around 330 post offices consistent with the new model of the network at their disposal.

MULTI-CHANNEL AVAILABILITY - the best physical, mobile, and Internet availability for private customers

HIGH EFFECTIVENESS AND EFFICIENCY OF THE ORGANISATION - processes and organisation optimized in terms of service provision to customers

UNIQUE KNOWLEDGE OF CUSTOMERS - we know the needs of our customers and the challenges they face CUSTOMER-FOCUSED ACTIVITY - we always act taking the customer’s perspective into account

FOR BUSINESS CUSTOMERS to private customers and small and medium-sized companies.

48

Annual Report 2014

POCZTA POLSKA IS THE ONLY OPERATOR TO OFFER safe, integrated, and multi-channel access for

PRIVATE CUSTOMERS to universal and mass services.

DEVELOPMENT OF PRODUCTS AND DISTRIBUTION CHANNELS - always taking the needs of customers into account

PROFILED OFFER FOR CUSTOMERS - simple and common offer for private customers, especially prepared offer for business customers

49

Investments in development in 2014

The most important investments in property in 2014

In 2014, Poczta Polska S.A. achieved the investment budget it had prepared, focusing on tasks following from the company’s strategic priorities related to logistics, informatization, and its network of post offices. Modifications regarding investment procedures started in 2012 made it possible to further improve the efficiency of the entire investment process.

as regard the sales network (postal network and technical security of facilities): • opening of 152 post offices remodelled according to the new standard applicable to their network, • 244 Postal Financial Zones opened at post offices, • 24/7 zones opened at 30 post offices, • 75 post offices adjusted and modernised; modernisation of the heating system of 34 facilities.

Capital expenditure on property and intangible property 38) in 2014 amounted to PLN 230.6 million in line with the following structure:

Investment plans for the nearest future Capital expenditure in 2014

Investment priorities of the company for the years to come:

35%

44%

21%

logistics (postal logistics and transport system) informatization sales network (postal network and technical security of facilities)

38)

50

regarding logistics (postal logistics and transport system)

IT investments:

• 8 machines for sorting letters were purchased and activated in 5 locations: at distribution and sorting centres (WER) in Warsaw - 3 machines, in Zabrze 2 machines, and in Wrocław, Pruszcz Gdański, and Lisi Ogon - 1 machine each;

• Poczta Polska S.A. informatization plan for 2014-2018 was introduced, reflecting the operating activity carried out on the basis of the company’s strategy accepted and its informatization strategy. Such IT activity resulted, close to the end of 2014, in:

• the following were obtained by means of leasing: 320 all-purpose vehicles (lorries) with total permitted load of 3.5 tonne, 85 specialised vehicles for transporting valuable materials (armoured carriers), and 54 all-purpose vehicles (lorries) with permitted load of more than 3.5 tonne - as a result of this, by the end of 2014, the age of 2/3 of vehicles at the disposal of Poczta Polska S.A. was less than 4 years which had a material impact on reducing the costs of transport; what is more, more than 70% of Poczta Polska S.A. vehicles is consistent with European exhaust fumes emission standards, at least EURO5, which reduces negative impact on the natural environment and is consistent with the company’s corporate social responsibility activities;

-

modification of key business systems, e.g. Poczta 2000, including its modules, FinPost, ZST,

-

implementation of a platform for IT processes management, a system for self-service fuel tanking at POL gas stations, a system for monitoring network events - IPS, a system for transport management - miniTMS, and a system for file processing and exchange, including its integration with mass printing systems,

-

purchasing IT equipment for structural units of Poczta Polska S.A., i.e. PCs, notebooks, active devices for LAN, radio scanners for the ZST system;

logistics: • performance of investment processes for new sorting stations and modernisation and adjustment of sorting and distribution centre (WER) facilities, • procuring further lorries of load-bearing capacity up to and more than 3.5 tonnes and armoured carriers; informatization: • continuing activity aimed at effectively supporting business objectives of Poczta Polska S.A. and implementing its IT-related strategy by means of: - development and modification of key business systems, i.e. the window system, ZST system and systems for supporting the provision of financial services, - developing an Electronic Document Circulation System; sales network (postal network and technical security of facilities): • adjusting further post offices to the new network model, some of them sporting 24/7 self-service zones, • opening Postal Financial Zones at further post offices for rendering banking and insurance services.

the value indicated also includes licence fee instalments to be paid in 2015-2016

Annual Report 2014

51

Investments in development in 2014

The most important investments in property in 2014

In 2014, Poczta Polska S.A. achieved the investment budget it had prepared, focusing on tasks following from the company’s strategic priorities related to logistics, informatization, and its network of post offices. Modifications regarding investment procedures started in 2012 made it possible to further improve the efficiency of the entire investment process.

as regard the sales network (postal network and technical security of facilities): • opening of 152 post offices remodelled according to the new standard applicable to their network, • 244 Postal Financial Zones opened at post offices, • 24/7 zones opened at 30 post offices, • 75 post offices adjusted and modernised; modernisation of the heating system of 34 facilities.

Capital expenditure on property and intangible property 38) in 2014 amounted to PLN 230.6 million in line with the following structure:

Investment plans for the nearest future Capital expenditure in 2014

Investment priorities of the company for the years to come:

35%

44%

21%

logistics (postal logistics and transport system) informatization sales network (postal network and technical security of facilities)

38)

50

regarding logistics (postal logistics and transport system)

IT investments:

• 8 machines for sorting letters were purchased and activated in 5 locations: at distribution and sorting centres (WER) in Warsaw - 3 machines, in Zabrze 2 machines, and in Wrocław, Pruszcz Gdański, and Lisi Ogon - 1 machine each;

• Poczta Polska S.A. informatization plan for 2014-2018 was introduced, reflecting the operating activity carried out on the basis of the company’s strategy accepted and its informatization strategy. Such IT activity resulted, close to the end of 2014, in:

• the following were obtained by means of leasing: 320 all-purpose vehicles (lorries) with total permitted load of 3.5 tonne, 85 specialised vehicles for transporting valuable materials (armoured carriers), and 54 all-purpose vehicles (lorries) with permitted load of more than 3.5 tonne - as a result of this, by the end of 2014, the age of 2/3 of vehicles at the disposal of Poczta Polska S.A. was less than 4 years which had a material impact on reducing the costs of transport; what is more, more than 70% of Poczta Polska S.A. vehicles is consistent with European exhaust fumes emission standards, at least EURO5, which reduces negative impact on the natural environment and is consistent with the company’s corporate social responsibility activities;

-

modification of key business systems, e.g. Poczta 2000, including its modules, FinPost, ZST,

-

implementation of a platform for IT processes management, a system for self-service fuel tanking at POL gas stations, a system for monitoring network events - IPS, a system for transport management - miniTMS, and a system for file processing and exchange, including its integration with mass printing systems,

-

purchasing IT equipment for structural units of Poczta Polska S.A., i.e. PCs, notebooks, active devices for LAN, radio scanners for the ZST system;

logistics: • performance of investment processes for new sorting stations and modernisation and adjustment of sorting and distribution centre (WER) facilities, • procuring further lorries of load-bearing capacity up to and more than 3.5 tonnes and armoured carriers; informatization: • continuing activity aimed at effectively supporting business objectives of Poczta Polska S.A. and implementing its IT-related strategy by means of: - development and modification of key business systems, i.e. the window system, ZST system and systems for supporting the provision of financial services, - developing an Electronic Document Circulation System; sales network (postal network and technical security of facilities): • adjusting further post offices to the new network model, some of them sporting 24/7 self-service zones, • opening Postal Financial Zones at further post offices for rendering banking and insurance services.

the value indicated also includes licence fee instalments to be paid in 2015-2016

Annual Report 2014

51

Our Warsaw sorting station is one of terminals in the Central and Eastern Europe. It guarantees accuracy, promptness, and safety of postal circulation for all.

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Annual Report 2014

STRUCTURAL DEVELOPMENT

the largest and most modern postal

53

Our Warsaw sorting station is one of terminals in the Central and Eastern Europe. It guarantees accuracy, promptness, and safety of postal circulation for all.

52

Annual Report 2014

STRUCTURAL DEVELOPMENT

the largest and most modern postal

53

STRUCTURAL DEVELOPMENT Structure of Poczta Polska S.A.

Poczta Polska S.A. is a network company, owning one of the largest customer service point networks in Poland, including post offices, branches of post offices, postal agencies (for private customers and mass customers), and postal points (for mass customers). Number of post offices As at 31 December 2014, the company had 7 500 post offices (own offices and postal agencies), including 3 995 offices in cities and 3 532 offices in rural areas.

In 2014, Poczta Polska S.A. achieved all indicators of universal service availability defined in the Regulation of the Minister of Administration and Digitization of 29 April 2013 on the conditions for performing the universal services by the designated operator, including the requirement stating that there should be at least one post office in every commune (gmina).

Employment status and structure

Training and development projects

In December 2013, the Human Resources Management Policy within the Organisation for 2014-2018 was accepted. Said document defines, among other things, employment optimization in particular years, the level of employment necessary for meeting the company’s goals and maintaining a stable position on the liberalised market of postal services.

In 2014, development projects consistent with the accepted strategic development principles of the company were carried out, supporting key competence areas such as business orientation, making the sales process more active, customer service, and quality of service provision.

The company’s level of employment is continuously adjusted to the situation on the market, taking the needs of customers and social tendencies into account, i.e. taking a marked decrease in volume of conventional postal services. In 2014, the principles of the Policy regarding developing strategic competence of employees, improving the efficiency of human resources usage, and employment structure reorganisation were implemented. Employment and Voluntary Resignation Programme Continuing a programme for restructuring the company started in 2012, the company further optimised processes carried out as part of particular areas of activity, making it possible to reduce employment in all employee groups. Average (annual) employment ratio in 2014 was 79 471.1 full-time jobs, i.e. a decrease of 3 996.7 full-time jobs (4.79%) in comparison with 2013. Employment was reduced the most in the “management” group (by 6.82%) and the “functional back-office” group (by 6.17%).

In 2014, employee development projects were carried out in many forms: • more than 11 thousand people (i.e. 12.5% of the overall number of people trained) took part in e-learning training sessions, • direct training: - internal training system - internal trainers conducted training sessions for more than 50 thousand people, i.e. 54% of the overall number of people trained; - external training system - training companies conducted training sessions for more than 30 thousand people, i.e. 33% of the overall number of people trained.

In order to counter the negative social consequences of Poczta Polska S.A. restructuring activity, the management of Poczta Polska S.A. in 2014 closely adhered to a staff policy based on a Voluntary Resignation Programme. Subsequent rounds of that Programme made it possible to meet the 2014 staff policy goals regarding employment optimisation. 4 436 people (4 247.34 full-time jobs) made use of the Voluntary Resignation Programme in 2014.

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Annual Report 2014

55

STRUCTURAL DEVELOPMENT Structure of Poczta Polska S.A.

Poczta Polska S.A. is a network company, owning one of the largest customer service point networks in Poland, including post offices, branches of post offices, postal agencies (for private customers and mass customers), and postal points (for mass customers). Number of post offices As at 31 December 2014, the company had 7 500 post offices (own offices and postal agencies), including 3 995 offices in cities and 3 532 offices in rural areas.

In 2014, Poczta Polska S.A. achieved all indicators of universal service availability defined in the Regulation of the Minister of Administration and Digitization of 29 April 2013 on the conditions for performing the universal services by the designated operator, including the requirement stating that there should be at least one post office in every commune (gmina).

Employment status and structure

Training and development projects

In December 2013, the Human Resources Management Policy within the Organisation for 2014-2018 was accepted. Said document defines, among other things, employment optimization in particular years, the level of employment necessary for meeting the company’s goals and maintaining a stable position on the liberalised market of postal services.

In 2014, development projects consistent with the accepted strategic development principles of the company were carried out, supporting key competence areas such as business orientation, making the sales process more active, customer service, and quality of service provision.

The company’s level of employment is continuously adjusted to the situation on the market, taking the needs of customers and social tendencies into account, i.e. taking a marked decrease in volume of conventional postal services. In 2014, the principles of the Policy regarding developing strategic competence of employees, improving the efficiency of human resources usage, and employment structure reorganisation were implemented. Employment and Voluntary Resignation Programme Continuing a programme for restructuring the company started in 2012, the company further optimised processes carried out as part of particular areas of activity, making it possible to reduce employment in all employee groups. Average (annual) employment ratio in 2014 was 79 471.1 full-time jobs, i.e. a decrease of 3 996.7 full-time jobs (4.79%) in comparison with 2013. Employment was reduced the most in the “management” group (by 6.82%) and the “functional back-office” group (by 6.17%).

In 2014, employee development projects were carried out in many forms: • more than 11 thousand people (i.e. 12.5% of the overall number of people trained) took part in e-learning training sessions, • direct training: - internal training system - internal trainers conducted training sessions for more than 50 thousand people, i.e. 54% of the overall number of people trained; - external training system - training companies conducted training sessions for more than 30 thousand people, i.e. 33% of the overall number of people trained.

In order to counter the negative social consequences of Poczta Polska S.A. restructuring activity, the management of Poczta Polska S.A. in 2014 closely adhered to a staff policy based on a Voluntary Resignation Programme. Subsequent rounds of that Programme made it possible to meet the 2014 staff policy goals regarding employment optimisation. 4 436 people (4 247.34 full-time jobs) made use of the Voluntary Resignation Programme in 2014.

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Annual Report 2014

55

Structure of training budget in 2014

Structure of training budget in 2013

Dialogue between the employer and the society

18% 17%

16%

6%

21% 4%

19% 2%

42% 14%

18%

Management Academy Sales Academy Specialist Academy

22%

Business trips

Mandatory training

School education

4% 9%

Mandatory training

31%

Business trips

School education

30%

Language Academy Other

Main areas of professional development supported by the company and targeted at crucial employee groups were: management competencies and sales competencies. Such support included:

In order to improve the quality and efficiency of training conducted by internal trainers, training sessions aimed at improving practical trainer skills were conducted - more than 250 people took part in them.

• managers of functional structural units took part in two types of training: Team Management (3.8 thousand of people) and Organisation of Own and Team’s Work (2.8 thousand of people). • employees handling retail sales to customers at post offices took part in training sessions pertaining to Active Sale (4.4 thousand of people), Professional Customer Service (4 thousand of people), Active Sale of CEP Services (8 thousand of people) and in workshops regarding insurance and financial products (6.8 thousand of people). • employees of commercial divisions took part in training sessions for supporting sales (1.7 thousand of people).

Training sessions aimed at improving the efficiency of projects conducted within the company were also carried out (mostly training sessions regarding project management methodology). Those supported the implementation of the Lean Sigma programme and trainings in the 5-S methodology. A total of 800 people took part in such training.

Additionally, more than 11 thousand of people took part in e-learning training sessions regarding the assortment of postal, banking, and insurance services.

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Annual Report 2014

In 2014, a series of workshops for supporting inter-team cooperation and effective communication was organised on the basis of the EXTENDE DISC model which was, until that time, used in recruitment. 1.5 thousand employees took part in such workshops, including 800 employees of the PIT department for whom those workshops were a part of the process supporting the transformation of the organisation’s IT. In 2014, programmes for professional adjustment for crucial employee groups of the company were introduced.

By the end of 2014, there were 73 trade union organisations active within the company, including two representative organisations (Związek Zawodowy Pracowników Poczty and Organizacja Międzyzakładowa NSZZ “Solidarność” Pracowników Poczty Polskiej). Trade unions are very important as far as social dialogue within the company is concerned and, consequently, also in shaping social workplace relations. The management board of the company deems dialogue and establishment of mutual relations with social partners important. This is why the company organises meetings with the social party on a regular basis to discuss matters which are pressing at a given time and important for the employer and employees alike. Intensive dialogue takes place both at the level of the company’s management board and in territorial units in Network Regions and Logistical Operations Division as part of systematically organised monthly meetings. Such meetings have reduced the number and scope of disputed areas and have contributed to finding solutions to problems. This was particularly important in view of the presence of many trade unions within the company. TIn 2014, the subjects of negotiations and discussions with Social Partners included strategic development directions, organisational changes, the economic and financial situation of the company, the remuneration fund, planned investments, and planned changes to the company’s prescriptive documents (the Collective Labour Agreement and Bonus Regulations). In 2014, 52 meetings with representatives of the company’s central office and regional offices took place.

New principles regarding remuneration and bonuses The staff policy of Poczta Polska S.A. assumes ordering matters regarding remuneration and incentives for employees, i.e. introducing an effective remuneration system supporting the implementation of strategy and having a positive impact on improving the company’s profitability. Due to the foregoing, activity aimed at developing a “product” including three basic elements: a modern remuneration system, a system for awarding bonuses, and a system of fringe benefits was started in 2012. On 19 December 2014, as a result of negotiations with representatives of company trade unions, key principles regarding remuneration and awarding bonuses were agreed-upon. During subsequent intensive meetings in January and February 2015, the wording of the Collective Labour Agreement, Additional Collective Agreement, and Bonus Regulations were negotiated. On 18 March 2015, the new Collective Labour Agreement and bonus regulations were signed. The Labour Inspection registered the new Collective Labour Agreement at the beginning of July 2015. Throughout the entire discussion process, a total of 13 negotiation meetings took place, most of them in the form of talks spanning several days. As negotiations progressed, an informational campaign for employees of Poczta Polska, conducted via intranet, the Poczta Polska magazine, its forums, and chats, was being prepared.

The shaping of proper social relations depends on the presence of transparent and systematic communication between the employer and employees of the company effected by means of, inter alia, intranet, forums, and chats. In 2014, this was an important part of establishing lasting and transparent relations and creating an atmosphere of trust which contribute to greater business benefits reaped by the company in connection with the innovativeness of its human resources.

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Structure of training budget in 2014

Structure of training budget in 2013

Dialogue between the employer and the society

18% 17%

16%

6%

21% 4%

19% 2%

42% 14%

18%

Management Academy Sales Academy Specialist Academy

22%

Business trips

Mandatory training

School education

4% 9%

Mandatory training

31%

Business trips

School education

30%

Language Academy Other

Main areas of professional development supported by the company and targeted at crucial employee groups were: management competencies and sales competencies. Such support included:

In order to improve the quality and efficiency of training conducted by internal trainers, training sessions aimed at improving practical trainer skills were conducted - more than 250 people took part in them.

• managers of functional structural units took part in two types of training: Team Management (3.8 thousand of people) and Organisation of Own and Team’s Work (2.8 thousand of people). • employees handling retail sales to customers at post offices took part in training sessions pertaining to Active Sale (4.4 thousand of people), Professional Customer Service (4 thousand of people), Active Sale of CEP Services (8 thousand of people) and in workshops regarding insurance and financial products (6.8 thousand of people). • employees of commercial divisions took part in training sessions for supporting sales (1.7 thousand of people).

Training sessions aimed at improving the efficiency of projects conducted within the company were also carried out (mostly training sessions regarding project management methodology). Those supported the implementation of the Lean Sigma programme and trainings in the 5-S methodology. A total of 800 people took part in such training.

Additionally, more than 11 thousand of people took part in e-learning training sessions regarding the assortment of postal, banking, and insurance services.

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Annual Report 2014

In 2014, a series of workshops for supporting inter-team cooperation and effective communication was organised on the basis of the EXTENDE DISC model which was, until that time, used in recruitment. 1.5 thousand employees took part in such workshops, including 800 employees of the PIT department for whom those workshops were a part of the process supporting the transformation of the organisation’s IT. In 2014, programmes for professional adjustment for crucial employee groups of the company were introduced.

By the end of 2014, there were 73 trade union organisations active within the company, including two representative organisations (Związek Zawodowy Pracowników Poczty and Organizacja Międzyzakładowa NSZZ “Solidarność” Pracowników Poczty Polskiej). Trade unions are very important as far as social dialogue within the company is concerned and, consequently, also in shaping social workplace relations. The management board of the company deems dialogue and establishment of mutual relations with social partners important. This is why the company organises meetings with the social party on a regular basis to discuss matters which are pressing at a given time and important for the employer and employees alike. Intensive dialogue takes place both at the level of the company’s management board and in territorial units in Network Regions and Logistical Operations Division as part of systematically organised monthly meetings. Such meetings have reduced the number and scope of disputed areas and have contributed to finding solutions to problems. This was particularly important in view of the presence of many trade unions within the company. TIn 2014, the subjects of negotiations and discussions with Social Partners included strategic development directions, organisational changes, the economic and financial situation of the company, the remuneration fund, planned investments, and planned changes to the company’s prescriptive documents (the Collective Labour Agreement and Bonus Regulations). In 2014, 52 meetings with representatives of the company’s central office and regional offices took place.

New principles regarding remuneration and bonuses The staff policy of Poczta Polska S.A. assumes ordering matters regarding remuneration and incentives for employees, i.e. introducing an effective remuneration system supporting the implementation of strategy and having a positive impact on improving the company’s profitability. Due to the foregoing, activity aimed at developing a “product” including three basic elements: a modern remuneration system, a system for awarding bonuses, and a system of fringe benefits was started in 2012. On 19 December 2014, as a result of negotiations with representatives of company trade unions, key principles regarding remuneration and awarding bonuses were agreed-upon. During subsequent intensive meetings in January and February 2015, the wording of the Collective Labour Agreement, Additional Collective Agreement, and Bonus Regulations were negotiated. On 18 March 2015, the new Collective Labour Agreement and bonus regulations were signed. The Labour Inspection registered the new Collective Labour Agreement at the beginning of July 2015. Throughout the entire discussion process, a total of 13 negotiation meetings took place, most of them in the form of talks spanning several days. As negotiations progressed, an informational campaign for employees of Poczta Polska, conducted via intranet, the Poczta Polska magazine, its forums, and chats, was being prepared.

The shaping of proper social relations depends on the presence of transparent and systematic communication between the employer and employees of the company effected by means of, inter alia, intranet, forums, and chats. In 2014, this was an important part of establishing lasting and transparent relations and creating an atmosphere of trust which contribute to greater business benefits reaped by the company in connection with the innovativeness of its human resources.

57

postal parcels. Our job brings us a lot of satisfaction - we are, after all, acting as an intermediary for people settling their everyday important matters.

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Annual Report 2014

ACTIVITY OF POCZTA POLSKA FOR THE BENEFIT OF THE ENVIRONMENT

We provide comprehensive handling services of

59

postal parcels. Our job brings us a lot of satisfaction - we are, after all, acting as an intermediary for people settling their everyday important matters.

58

Annual Report 2014

ACTIVITY OF POCZTA POLSKA FOR THE BENEFIT OF THE ENVIRONMENT

We provide comprehensive handling services of

59

ACTIVITY OF POCZTA POLSKA FOR THE BENEFIT OF THE ENVIRONMENT Innovative Postal Services (”Innowacyjna Poczta”)

Implementation of corporate social responsibility principles Since 2013, CSR projects are carried out within the company in line with the “CSR Strategy for 2014-2017.” According to the CSR strategy, there are two priorities for 2014: voluntary employee activity and economic education. In addition to focusing on its priorities, the company continued the activity it started in previous years and initiated projects concerning four areas: employees, customers, society, and the natural environment.

In 2014, Poczta Polska S.A. organised its first all-Poland educational project for, inter alia, people employed at structural units generating revenue. Its objective was to present financial matters demonstrating the relations between a company’s financial performance and the principles for remunerating employees it uses. Educational activity was organised in such manner as to make it consistent with the CSR strategy of the company and its business strategy. It was aimed at developing the economic awareness of employees. They gained knowledge useful in both their private and professional lives. It will help them to understand the reality around them and to make informed financial decisions.

This is a contest for employees as part of which they can propose projects facilitating and simplifying everyday work. The best of such ideas are rewarded and implemented. The contest has been going on since 2011 and it took on the form of themed editions in 2014. Last year, six editions of the contest were organised, their themes including initiatives supporting the implementation of the Challenges affecting the growth of Poczta Polska S.A. in 2014.

CSR 2014 - a detailed description of projects prepared especially for employees, customers, society, and the natural environment:

Economic education

Promotion of voluntary employee activity

Postal Jogging Enthusiasts - Sports Parcel (Pocztowa Grupa Biegowa Sportowa Paczka (PBG))

Articles about economy, including ones about interpretation of financial performance of the company and reasonable household budget management, were published in the company’s intranet. A series of regional meetings entitled “Where does money come from in Poczta Polska?” was also organised. It pertained to the postal services market and the company’s financial performance. During systematically organised meetings, employees learned about the services which were the most profitable to Poczta Polska and the way in which their work influences the financial performance and profits of the company. Managerial staff managing post offices took part in such meetings, as well as representatives of employees.

Due to high employee interest in voluntary activity, the company has created a network of regional voluntary activity coordinators. 15 coordinators support the company in spreading information about and initiating pro-social activity among employees in all of Poland. Up until now, regional coordinators have organised 10 collections, a charitable picnic, and an initiative promoting blood donation. Poczta Polska managers have also become involved in promoting voluntary activity they renovated a post office and took part in collection of Christmas presents for children from children’s home no. 4 in Warsaw. There were informational articles about voluntary employee activity in the intranet and the Poczta Polska magazine. Initially, a study into employee interest in voluntary activity was conducted. 1 012 employees took part in it and more than 800 of them declared their willingness to become involved in voluntary employee activity.

This is a group of people keen on jogging and leading an active life. In 2013, a special zone was opened for PGB in the intranet, making it possible for members of the group to exchange information about jogging. In 2014, this zone was reorganised and new functionalities were added to it. As of now, the website contains, among other things, useful suggestions and guidelines, a calendar of marathons and jogging events, as well as other information shared by joggers. The platform is interactive.- all people who would like to share their jogging-related experiences, tell others about jogging routes, share suggestions or photos taken during marathons can send such materials to a special mailbox. The PGB Zone currently has 255 members. Since 2014, Poczta Polska S.A. also pays participation fees for joggers in exchange for representing the company during the event. During the last three years, the company has also organised the President’s Cup Run (Bieg o Puchar Prezesa) three times. The event is becoming more and more popular.

EMPLOYEES

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EMPLOYEES

Annual Report 2014

EMPLOYEES

EMPLOYEES

Multisport Cards The company, with a view to promoting healthy lifestyle, distributes Multisport cards among its employees, granting them unlimited access to sports facilities. Fees for such cards are subsidized from the Workplace Social Benefits Fund (Zakładowy Fundusz Świadczeń Socjalnych). They are currently used by more than 9 thousand employees.

EMPLOYEES

61

ACTIVITY OF POCZTA POLSKA FOR THE BENEFIT OF THE ENVIRONMENT Innovative Postal Services (”Innowacyjna Poczta”)

Implementation of corporate social responsibility principles Since 2013, CSR projects are carried out within the company in line with the “CSR Strategy for 2014-2017.” According to the CSR strategy, there are two priorities for 2014: voluntary employee activity and economic education. In addition to focusing on its priorities, the company continued the activity it started in previous years and initiated projects concerning four areas: employees, customers, society, and the natural environment.

In 2014, Poczta Polska S.A. organised its first all-Poland educational project for, inter alia, people employed at structural units generating revenue. Its objective was to present financial matters demonstrating the relations between a company’s financial performance and the principles for remunerating employees it uses. Educational activity was organised in such manner as to make it consistent with the CSR strategy of the company and its business strategy. It was aimed at developing the economic awareness of employees. They gained knowledge useful in both their private and professional lives. It will help them to understand the reality around them and to make informed financial decisions.

This is a contest for employees as part of which they can propose projects facilitating and simplifying everyday work. The best of such ideas are rewarded and implemented. The contest has been going on since 2011 and it took on the form of themed editions in 2014. Last year, six editions of the contest were organised, their themes including initiatives supporting the implementation of the Challenges affecting the growth of Poczta Polska S.A. in 2014.

CSR 2014 - a detailed description of projects prepared especially for employees, customers, society, and the natural environment:

Economic education

Promotion of voluntary employee activity

Postal Jogging Enthusiasts - Sports Parcel (Pocztowa Grupa Biegowa Sportowa Paczka (PBG))

Articles about economy, including ones about interpretation of financial performance of the company and reasonable household budget management, were published in the company’s intranet. A series of regional meetings entitled “Where does money come from in Poczta Polska?” was also organised. It pertained to the postal services market and the company’s financial performance. During systematically organised meetings, employees learned about the services which were the most profitable to Poczta Polska and the way in which their work influences the financial performance and profits of the company. Managerial staff managing post offices took part in such meetings, as well as representatives of employees.

Due to high employee interest in voluntary activity, the company has created a network of regional voluntary activity coordinators. 15 coordinators support the company in spreading information about and initiating pro-social activity among employees in all of Poland. Up until now, regional coordinators have organised 10 collections, a charitable picnic, and an initiative promoting blood donation. Poczta Polska managers have also become involved in promoting voluntary activity they renovated a post office and took part in collection of Christmas presents for children from children’s home no. 4 in Warsaw. There were informational articles about voluntary employee activity in the intranet and the Poczta Polska magazine. Initially, a study into employee interest in voluntary activity was conducted. 1 012 employees took part in it and more than 800 of them declared their willingness to become involved in voluntary employee activity.

This is a group of people keen on jogging and leading an active life. In 2013, a special zone was opened for PGB in the intranet, making it possible for members of the group to exchange information about jogging. In 2014, this zone was reorganised and new functionalities were added to it. As of now, the website contains, among other things, useful suggestions and guidelines, a calendar of marathons and jogging events, as well as other information shared by joggers. The platform is interactive.- all people who would like to share their jogging-related experiences, tell others about jogging routes, share suggestions or photos taken during marathons can send such materials to a special mailbox. The PGB Zone currently has 255 members. Since 2014, Poczta Polska S.A. also pays participation fees for joggers in exchange for representing the company during the event. During the last three years, the company has also organised the President’s Cup Run (Bieg o Puchar Prezesa) three times. The event is becoming more and more popular.

EMPLOYEES

60

EMPLOYEES

Annual Report 2014

EMPLOYEES

EMPLOYEES

Multisport Cards The company, with a view to promoting healthy lifestyle, distributes Multisport cards among its employees, granting them unlimited access to sports facilities. Fees for such cards are subsidized from the Workplace Social Benefits Fund (Zakładowy Fundusz Świadczeń Socjalnych). They are currently used by more than 9 thousand employees.

EMPLOYEES

61

Certification of post offices

The “In customer’s opinion” (”Zdaniem Klienta”) website This is a new website of the Contact Center of Poczta Polska S.A. where customers can, by phone or via e-mail, ask questions or voice comments and ideas regarding the company’s products and activity. It is a platform for dialogue and a source of knowledge for customers and feedback for the company.

This is a continuation of a project aimed at confirming the accessibility of post offices to the disabled. In 2014, such certificates were awarded to 23 more offices (4 offices in 2013). Poczta Polska S.A., while re-branding its post offices, also renovates them according to suggestions from Fundacja Integracja so as to make them consistent with standards of disabled-friendly facilities. Selected offices have received the “Facility without barriers” (”Obiekt bez barier”) certificate.

CUSTOMERS

Blood Donor Zone is a Community of Honorary Blood Donors In 2014, a Blood Donor Zone was opened in the intranet. As part of it, every Poczta Polska Blood Donor can create an account and then publish information on how much blood they donated and when. All users are listed as part of a Blood Donor Ranking. They can use a special calendar to enrol for taking part in events related to blood donation, including blood collection organised by Poczta Polska. The website also contains current information and interesting facts about blood donation, as well as addresses of local blood donation points. The Blood Donor Zone is also a platform for establishing contacts. Employees and their relatives who want to notify others that blood is needed or organise an initiative related to blood donation can send such information to a special email address. As of now, there are 257 employees registered as part of the Blood Donor Zone. They have donated a total of 2 500 litres of blood.

EMPLOYEES

62

Annual Report 2014

The “Our Independence!” (”Mamy Niepodległą!”) project

Distribution of “Fairy Tales with a Message” (”Bajki z morałem”) Striving to promote the involvement and initiative of its employees, Poczta Polska became a distributor of books for children written by Robert Kuśta, an employee of Poczta Polska S.A. The company supported the sale of those books with a promotional campaign in the intranet, on its website and during 30 regional meetings with children. From November 2014 to January 2015, 15 842 copies of “Fairy Tales with a Message” were sold at Poczta Polska S.A. post offices.

EMPLOYEES

CUSTOMERS

Safe Apprenticeship with Poczta Polska S.A.

Poczta Polska S.A., acting in cooperation with Józef Piłsudski Museum, has organised a project for sending wish cards on the occasion of the Polish Independence Day for the second time. From 4 to 11 November, our customers sent, free-of-charge, 170 000 postcards designed by Polish artists to their friends and relatives.

CUSTOMERS

We, together with Robinson Crusoe Foundation, started a programme aimed at involving employees of post offices in selflessly helping young people from children’s homes and foster care. Our employees became mentors for such young trainees. The trainees, due to their bad past experiences, often find it difficult to adjust to a new environment or taking up responsibility. This is why mentors helped them not only in professional terms but also provided them with emotional support. In 2014, 20 such apprenticeships took place in all of Poland.

SOCIETY

63

Certification of post offices

The “In customer’s opinion” (”Zdaniem Klienta”) website This is a new website of the Contact Center of Poczta Polska S.A. where customers can, by phone or via e-mail, ask questions or voice comments and ideas regarding the company’s products and activity. It is a platform for dialogue and a source of knowledge for customers and feedback for the company.

This is a continuation of a project aimed at confirming the accessibility of post offices to the disabled. In 2014, such certificates were awarded to 23 more offices (4 offices in 2013). Poczta Polska S.A., while re-branding its post offices, also renovates them according to suggestions from Fundacja Integracja so as to make them consistent with standards of disabled-friendly facilities. Selected offices have received the “Facility without barriers” (”Obiekt bez barier”) certificate.

CUSTOMERS

Blood Donor Zone is a Community of Honorary Blood Donors In 2014, a Blood Donor Zone was opened in the intranet. As part of it, every Poczta Polska Blood Donor can create an account and then publish information on how much blood they donated and when. All users are listed as part of a Blood Donor Ranking. They can use a special calendar to enrol for taking part in events related to blood donation, including blood collection organised by Poczta Polska. The website also contains current information and interesting facts about blood donation, as well as addresses of local blood donation points. The Blood Donor Zone is also a platform for establishing contacts. Employees and their relatives who want to notify others that blood is needed or organise an initiative related to blood donation can send such information to a special email address. As of now, there are 257 employees registered as part of the Blood Donor Zone. They have donated a total of 2 500 litres of blood.

EMPLOYEES

62

Annual Report 2014

The “Our Independence!” (”Mamy Niepodległą!”) project

Distribution of “Fairy Tales with a Message” (”Bajki z morałem”) Striving to promote the involvement and initiative of its employees, Poczta Polska became a distributor of books for children written by Robert Kuśta, an employee of Poczta Polska S.A. The company supported the sale of those books with a promotional campaign in the intranet, on its website and during 30 regional meetings with children. From November 2014 to January 2015, 15 842 copies of “Fairy Tales with a Message” were sold at Poczta Polska S.A. post offices.

EMPLOYEES

CUSTOMERS

Safe Apprenticeship with Poczta Polska S.A.

Poczta Polska S.A., acting in cooperation with Józef Piłsudski Museum, has organised a project for sending wish cards on the occasion of the Polish Independence Day for the second time. From 4 to 11 November, our customers sent, free-of-charge, 170 000 postcards designed by Polish artists to their friends and relatives.

CUSTOMERS

We, together with Robinson Crusoe Foundation, started a programme aimed at involving employees of post offices in selflessly helping young people from children’s homes and foster care. Our employees became mentors for such young trainees. The trainees, due to their bad past experiences, often find it difficult to adjust to a new environment or taking up responsibility. This is why mentors helped them not only in professional terms but also provided them with emotional support. In 2014, 20 such apprenticeships took place in all of Poland.

SOCIETY

63

Win an Apprenticeship (”Grasz o Staż”)

Aid for Ukraine

Become an Olympian

Red Nose Day (”Dzień Czerwonego Noska”)

The objective of this all-Poland contest was to enable promising students and graduates to meet with employers. The programme makes it possible for students to gain real-life professional experience and employees often get very good trainees and employees this way.

Poczta Polska S.A. joined activity aimed at providing Ukraine with charitable aid, making it possible for its customers to send, free-of-charge, packages with food and clothes to that country. As part of this project, more than 25 thousand such parcels with humanitarian aid were sent.

This is an educational project supported by Poczta Polska. It is aimed at promoting Olympic ideals among the youth. Polish Olympians acts as ambassadors for the project: Paweł Zygmunt - he has been an Olympian four times and won medals in world and European speed skating championship, Leszek Blanik - he has won two Olympic medals in artistic gymnastics, and Katarzyna Zygmunt the first woman to become an international-level Polish hockey referee. As part of the project, those ambassadors will deliver 100 lectures concerning the Olympic movement in elementary schools, junior high schools, and high schools. In 2014, 30 such lectures were delivered. Students from schools covered by the project will be able to take part in a contest - the main prize is a trip to the Olympic Games in Rio de Janeiro.

Poczta Polska S.A. took part in an event for children promoting laughter therapy, organised by the Dr Clown Foundation. As part of voluntary activity, Poczta Polska employees managed its stall where games for children were organised, including a postman bicycle race, little philatelist booth, and writing postcards to children at hospitals. The Dr Clown Foundation has been active in Poland since 1999. Hunter Cambell Adams, an American doctor who started laughter therapy, is its patron. Voluntary activists from the Foundation, many of whom are employees of Poczta Polska, visit hospitals and children’s homes, organise charitable events for children, and repair day rooms.

Poczta Polska S.A. has already been a partner as part of this contest three times. In 2014, 23 trainees were accepted for 2-month to 3-month apprenticeships - the greatest number among all companies taking part.

Poczta Polska S.A. joining the activity aimed at helping Poland’s eastern neighbour was a token of solidarity of the Polish postal operator and, at the same time, one of the largest logistical companies in our part of Europe, with the people of Ukraine. Poczta Polska S.A. received a special award from Caritas Polska for its “Aid for Ukraine” project.

SOCIETY

SOCIETY

SOCIETY

The “Become Independent” educational project

Computer equipment for schools

Visit by Santa Claus from Lapland

“Paper-eaters” (”Papierojady”)

Poczta Polska became a partner of a campaign aimed at helping young people to take control over their professional career. This educational project included 100 workshops - 80 for young people and 20 for parents. During such meetings, professional trainers presented career development opportunities and possible further education after the school leaving examination to young people.

Poczta Polska S.A. provided elementary school children from Łódzkie Voivodeship with 50 computers. Employees of the company’s Contact Center helped to install those computers at school classrooms as part of voluntary activity. They will also provide the schools with free-ofcharge service desk services.

Poczta Polska S.A. has organised two meetings of Santa Claus with children from a children’s home and children of the company’s employees: one at a post office and one at a postal sorting station. As an additional attraction, it was possible to design a postcard and send it. Participants could see for themselves the handling of postcards at a sorting station. 180 children took part in those meetings.

This is a continuation of a project started in 2013 whose objective was to promote pro-ecological activity among employees by means of placing plastic containers for unnecessary printouts, notes, used paper envelopes and other recyclable paper materials at the facilities of the company. Paper-eaters were equipped with security measures preventing access to their contents, ensuring that confidential information remains safe. In the period from November 2013 to December 2014, 14 tonnes of paper were collected for recycling. In 2014, around 150 new Paper-eaters were bought.

For purposes of this campaign, Poczta Polska S.A. also prepared an educational video in which experts discuss possibilities connected with pursuing one’s own business activity while young.

SOCIETY

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SOCIETY

Annual Report 2014

Employees who do not have access to such containers can use the online document shredding zone. It makes it possible for them to order online the removal of documents for shredding and recycling. In total, in the period from November 2013 to December 2014, 144.5 tonnes of paper were processed.

SOCIETY

SOCIETY

ENVIRONMENT

65

Win an Apprenticeship (”Grasz o Staż”)

Aid for Ukraine

Become an Olympian

Red Nose Day (”Dzień Czerwonego Noska”)

The objective of this all-Poland contest was to enable promising students and graduates to meet with employers. The programme makes it possible for students to gain real-life professional experience and employees often get very good trainees and employees this way.

Poczta Polska S.A. joined activity aimed at providing Ukraine with charitable aid, making it possible for its customers to send, free-of-charge, packages with food and clothes to that country. As part of this project, more than 25 thousand such parcels with humanitarian aid were sent.

This is an educational project supported by Poczta Polska. It is aimed at promoting Olympic ideals among the youth. Polish Olympians acts as ambassadors for the project: Paweł Zygmunt - he has been an Olympian four times and won medals in world and European speed skating championship, Leszek Blanik - he has won two Olympic medals in artistic gymnastics, and Katarzyna Zygmunt the first woman to become an international-level Polish hockey referee. As part of the project, those ambassadors will deliver 100 lectures concerning the Olympic movement in elementary schools, junior high schools, and high schools. In 2014, 30 such lectures were delivered. Students from schools covered by the project will be able to take part in a contest - the main prize is a trip to the Olympic Games in Rio de Janeiro.

Poczta Polska S.A. took part in an event for children promoting laughter therapy, organised by the Dr Clown Foundation. As part of voluntary activity, Poczta Polska employees managed its stall where games for children were organised, including a postman bicycle race, little philatelist booth, and writing postcards to children at hospitals. The Dr Clown Foundation has been active in Poland since 1999. Hunter Cambell Adams, an American doctor who started laughter therapy, is its patron. Voluntary activists from the Foundation, many of whom are employees of Poczta Polska, visit hospitals and children’s homes, organise charitable events for children, and repair day rooms.

Poczta Polska S.A. has already been a partner as part of this contest three times. In 2014, 23 trainees were accepted for 2-month to 3-month apprenticeships - the greatest number among all companies taking part.

Poczta Polska S.A. joining the activity aimed at helping Poland’s eastern neighbour was a token of solidarity of the Polish postal operator and, at the same time, one of the largest logistical companies in our part of Europe, with the people of Ukraine. Poczta Polska S.A. received a special award from Caritas Polska for its “Aid for Ukraine” project.

SOCIETY

SOCIETY

SOCIETY

The “Become Independent” educational project

Computer equipment for schools

Visit by Santa Claus from Lapland

“Paper-eaters” (”Papierojady”)

Poczta Polska became a partner of a campaign aimed at helping young people to take control over their professional career. This educational project included 100 workshops - 80 for young people and 20 for parents. During such meetings, professional trainers presented career development opportunities and possible further education after the school leaving examination to young people.

Poczta Polska S.A. provided elementary school children from Łódzkie Voivodeship with 50 computers. Employees of the company’s Contact Center helped to install those computers at school classrooms as part of voluntary activity. They will also provide the schools with free-ofcharge service desk services.

Poczta Polska S.A. has organised two meetings of Santa Claus with children from a children’s home and children of the company’s employees: one at a post office and one at a postal sorting station. As an additional attraction, it was possible to design a postcard and send it. Participants could see for themselves the handling of postcards at a sorting station. 180 children took part in those meetings.

This is a continuation of a project started in 2013 whose objective was to promote pro-ecological activity among employees by means of placing plastic containers for unnecessary printouts, notes, used paper envelopes and other recyclable paper materials at the facilities of the company. Paper-eaters were equipped with security measures preventing access to their contents, ensuring that confidential information remains safe. In the period from November 2013 to December 2014, 14 tonnes of paper were collected for recycling. In 2014, around 150 new Paper-eaters were bought.

For purposes of this campaign, Poczta Polska S.A. also prepared an educational video in which experts discuss possibilities connected with pursuing one’s own business activity while young.

SOCIETY

64

SOCIETY

Annual Report 2014

Employees who do not have access to such containers can use the online document shredding zone. It makes it possible for them to order online the removal of documents for shredding and recycling. In total, in the period from November 2013 to December 2014, 144.5 tonnes of paper were processed.

SOCIETY

SOCIETY

ENVIRONMENT

65

Charitable activity and support for pro-social initiatives

One of the elements of the CSR strategy of Poczta Polska S.A. is the activity of the Postal Gift Foundation, a public benefit organisation founded by the company. The mission of the Foundation is to support activity facilitating the development of individuals in need of aid, particularly by means of making their educational, health and health-related opportunities even. There are four aspects of such activity:

Ecological education A series of 10 articles about ecology was published on the intranet. In January, a special supplement to the Poczta Polska magazine was published, promoting pro-ecological activity among the company’s employees. Issues discussed in the magazine included: ecological matters at offices, good ecological practices in other companies, ecology in Poczta Polska S.A., an ecological test, ecological re-branding, saving water and electricity, and recycling. Additionally, employees received 1 800 stickers encouraging pro-ecological office behaviours. As part of shaping pro-ecological attitudes, an Electricity Saving Week was organised - a project for all employees of Poczta Polska S.A. conducted as part of the “Challenges affecting the Development of Poczta Polska S.A. 2014” initiative. Over the course of a week, a cycle of educational articles encouraging employees to save energy was published.

1) education by means of organising and co-funding scholarship programmes promoting talented children and young people, 2) protection of health and life by means of material support or sponsoring treatment and purchasing medicines and rehabilitation equipment, 3) social aid for employees of Poczta Polska S.A. who have suffered from a natural disasters such as fires or floods, 4) participation in social activities, programmes, and campaigns, cooperation with and support for projects of other non-governmental organisations.

ENVIRONMENT The Foundation is managed by employees of the company on a voluntary basis. Initiatives organised or co-funded by the Foundation in 2014: Caps collection

Earth Hour at the Warsaw sorting station

An all-Poland project for collecting plastic bottle caps by employees of Poczta Polska S.A. The collection of caps was aimed at helping pupils of the Postal Gift Foundation (”Fundacja Pocztowy Dar”). By the end of 2014, around 6 tonnes of caps were collected and sold for more than PLN 4 thousand - this money was donated for the rehabilitation of a former Poczta Polska S.A. employee.

Poczta Polska S.A. joined the “Earth Hour” programme. As part of it, ecological workshops were organised. “How to make a sorting and distribution centre (WER) more ecological?” The participants prepared a set of ecological principles which should be applied to all sorting stations in Poland. 120 employees took part in this project.

The project continues. Money received for selling caps will be transferred to further pupils of the Postal Gift Foundation.

ENVIRONMENT

66

Annual Report 2014

• A scholarship programme under the name of “Transfer for the future” (”Przekaz ku przyszłości”) - meeting the needs of children and young people from impoverished families who are exceptionally gifted and talented or who are particularly adept at education, sport, culture or social activity, the Foundation funded 81 scholarships with a total value of PLN 283 500 as part of the fourth education of the “Transfer for the future” scholarship programme.; •

Protection of health and life - in 2014, PLN 117 619 was assigned to: - material support or subsidies for individuals for purchasing medicines or rehabilitation equipment a total of PLN 52 380, - co-funding of rehabilitation at home - a total of PLN 13 860, - co-funding of rehabilitation trips - a total of PLN 20 879,

-

social campaigns and programmes - the Foundation, as part of supporting programmes, social campaigns, and educational campaigns organised jointly with other nongovernmental organisation, provided PLN 30 500 to be used for co-funding. - XXII Final of the Great Orchestra of Christmas Charity, - a project by the Foundation of the Order of Malta purchase of respirators for the Blessed Gerard Hospital in Barczewo. - organisation of a Dignity Day for the Mentally Challenged - it was organised by the Polish Foundation for the Mentally Challenged, Koszalin branch (Polskie Stowarzyszenie na rzecz Osób z Upośledzeniem Umysłowym), - a project called “The world within arm’s reach” (”Świat w zasięgu ręki”) - a series of social and therapeutic camps for children organised by the Łódź Alternative Upbringing Centre (Pracownia Alternatywnego Wychowania z Łodzi), - a trip for pupils of the Moomin Association (Stowarzyszenie Muminki) for an annual rehabilitation camp. In 2014, the Foundation, together with Poczta Polska S.A., organised a contest for designing a special occasion postcard for the World Kindness Day. The contest was meant for disabled children studying at elementary schools and junior high schools. The Foundation sponsored prizes for winners their total value was PLN 6 600 gross.

Expenses of the Foundation for its beneficiaries in 2011-2014 Scholarship programme “Transfer for the future” with the tax due on it (4 editions - 305 scholarship holders) PLN 964 792.17 Health-related purposes - rehabilitation trips, purchase of medicines and equipment PLN 244 736.91 Aid for employees and their families (suffering from natural disasters)

PLN 27 661.60

Cooperation with non-governmental organisations and educational organisations PLN 129 839.50 Contest for children for designing a neopostcard (disbursement of prizes) Total value of donations transferred to beneficiaries

PLN 6 600

PLN 1 373 30.18

ENVIRONMENT

67

Charitable activity and support for pro-social initiatives

One of the elements of the CSR strategy of Poczta Polska S.A. is the activity of the Postal Gift Foundation, a public benefit organisation founded by the company. The mission of the Foundation is to support activity facilitating the development of individuals in need of aid, particularly by means of making their educational, health and health-related opportunities even. There are four aspects of such activity:

Ecological education A series of 10 articles about ecology was published on the intranet. In January, a special supplement to the Poczta Polska magazine was published, promoting pro-ecological activity among the company’s employees. Issues discussed in the magazine included: ecological matters at offices, good ecological practices in other companies, ecology in Poczta Polska S.A., an ecological test, ecological re-branding, saving water and electricity, and recycling. Additionally, employees received 1 800 stickers encouraging pro-ecological office behaviours. As part of shaping pro-ecological attitudes, an Electricity Saving Week was organised - a project for all employees of Poczta Polska S.A. conducted as part of the “Challenges affecting the Development of Poczta Polska S.A. 2014” initiative. Over the course of a week, a cycle of educational articles encouraging employees to save energy was published.

1) education by means of organising and co-funding scholarship programmes promoting talented children and young people, 2) protection of health and life by means of material support or sponsoring treatment and purchasing medicines and rehabilitation equipment, 3) social aid for employees of Poczta Polska S.A. who have suffered from a natural disasters such as fires or floods, 4) participation in social activities, programmes, and campaigns, cooperation with and support for projects of other non-governmental organisations.

ENVIRONMENT The Foundation is managed by employees of the company on a voluntary basis. Initiatives organised or co-funded by the Foundation in 2014: Caps collection

Earth Hour at the Warsaw sorting station

An all-Poland project for collecting plastic bottle caps by employees of Poczta Polska S.A. The collection of caps was aimed at helping pupils of the Postal Gift Foundation (”Fundacja Pocztowy Dar”). By the end of 2014, around 6 tonnes of caps were collected and sold for more than PLN 4 thousand - this money was donated for the rehabilitation of a former Poczta Polska S.A. employee.

Poczta Polska S.A. joined the “Earth Hour” programme. As part of it, ecological workshops were organised. “How to make a sorting and distribution centre (WER) more ecological?” The participants prepared a set of ecological principles which should be applied to all sorting stations in Poland. 120 employees took part in this project.

The project continues. Money received for selling caps will be transferred to further pupils of the Postal Gift Foundation.

ENVIRONMENT

66

Annual Report 2014

• A scholarship programme under the name of “Transfer for the future” (”Przekaz ku przyszłości”) - meeting the needs of children and young people from impoverished families who are exceptionally gifted and talented or who are particularly adept at education, sport, culture or social activity, the Foundation funded 81 scholarships with a total value of PLN 283 500 as part of the fourth education of the “Transfer for the future” scholarship programme.; •

Protection of health and life - in 2014, PLN 117 619 was assigned to: - material support or subsidies for individuals for purchasing medicines or rehabilitation equipment a total of PLN 52 380, - co-funding of rehabilitation at home - a total of PLN 13 860, - co-funding of rehabilitation trips - a total of PLN 20 879,

-

social campaigns and programmes - the Foundation, as part of supporting programmes, social campaigns, and educational campaigns organised jointly with other nongovernmental organisation, provided PLN 30 500 to be used for co-funding. - XXII Final of the Great Orchestra of Christmas Charity, - a project by the Foundation of the Order of Malta purchase of respirators for the Blessed Gerard Hospital in Barczewo. - organisation of a Dignity Day for the Mentally Challenged - it was organised by the Polish Foundation for the Mentally Challenged, Koszalin branch (Polskie Stowarzyszenie na rzecz Osób z Upośledzeniem Umysłowym), - a project called “The world within arm’s reach” (”Świat w zasięgu ręki”) - a series of social and therapeutic camps for children organised by the Łódź Alternative Upbringing Centre (Pracownia Alternatywnego Wychowania z Łodzi), - a trip for pupils of the Moomin Association (Stowarzyszenie Muminki) for an annual rehabilitation camp. In 2014, the Foundation, together with Poczta Polska S.A., organised a contest for designing a special occasion postcard for the World Kindness Day. The contest was meant for disabled children studying at elementary schools and junior high schools. The Foundation sponsored prizes for winners their total value was PLN 6 600 gross.

Expenses of the Foundation for its beneficiaries in 2011-2014 Scholarship programme “Transfer for the future” with the tax due on it (4 editions - 305 scholarship holders) PLN 964 792.17 Health-related purposes - rehabilitation trips, purchase of medicines and equipment PLN 244 736.91 Aid for employees and their families (suffering from natural disasters)

PLN 27 661.60

Cooperation with non-governmental organisations and educational organisations PLN 129 839.50 Contest for children for designing a neopostcard (disbursement of prizes) Total value of donations transferred to beneficiaries

PLN 6 600

PLN 1 373 30.18

ENVIRONMENT

67

view in mind and we meet our customers face-to-face while rendering services to them. Our principles are simple and the goal of our activity is clear - we want to deliver satisfaction.

68

Annual Report 2014

FINANCIAL PERFORMANCE OF POCZTA POLSKA IN 2014

We always act with the customer’s point of

69

view in mind and we meet our customers face-to-face while rendering services to them. Our principles are simple and the goal of our activity is clear - we want to deliver satisfaction.

68

Annual Report 2014

FINANCIAL PERFORMANCE OF POCZTA POLSKA IN 2014

We always act with the customer’s point of

69

FINANCIAL PERFORMANCE OF POCZTA POLSKA IN 2014

Main factors influencing the company’s financial performance Postal services form the greatest part of the company’s revenue and, consequently, have the greatest impact on its financial performance. The fact that customers are more and more inclined towards electronic communication and shop online more and more frequently resulted in a number of steps being taken in order to adjust the company’s business profile to the tendencies currently affecting the market. A programme under the name of Exp@nsion was started in order to make good use of the dynamically developing e-commerce market and to increase the company’s share of that market. In 2014, the first stage of the programme was performed - a special website targeted at ecommerce entities was prepared, as well as a convenient eReturns platform and a package of additional financial and insurance services. Intensification of activity in the CEP sector resulted in an increase of income and volumes handled as part of that sector. Last year, the greatest challenge Poczta Polska S.A. faced was to counter the losses resulting from losing a tender for handling the correspondence of courts and prosecutor’s offices and from a rapid decrease of the number of letters. Poczta Polska S.A. faced a difficult problem - to find additional sources of income and to reduce the costs of its business activity. Reacting to the situation in which the company found itself, a programme called “Challenges affecting the development of Poczta Polska S.A. in 2014” was created.

70

Annual Report 2014

Its main objectives were met and, thanks to the programme, Poczta Polska S.A. showed that it is capable of effectively managing risk and of dynamically reacting to unfavourable market environment. Acting in line with the needs of its customers, the company extended the range of its electronic services rendered via the Envelo platform, created in 2013. Using the platform, private and business customers could access services such as the neopostcard, neoletter, neostamp, neoinvoice, and neobills. As far as services ordered via the Envelo platform are concerned, Poczta Polska S.A. ensures the physical performance of a considerable part of processes (e.g. delivery of correspondence, creating accounts for customers) and this is directly translated into significant revenues and income from cooperating with the subsidiary company operating the platform. Fast response to changes of market tendencies and to growing customer expectations made it possible for Poczta Polska S.A. to remain a trusted business partner, offering services which are attractive from the market perspective and in terms of quality. This is confirmed by Poczta Polska S.A. having won 90% of tenders in which it took part in 2014, procuring several key customers who had been using services offered by alternative operators. In 2014, Poczta Polska S.A. continued its efforts aimed at introducing changes adjusting its product range and its internal procedures to the current business situation and to customer expectations. A restructuring process carried out within the company required an intensification of efforts in development areas with the greatest potential (CEP, banking and insurance services, and e-services) and maintaining strict cost discipline. Poczta Polska S.A. organised numerous projects aimed at optimising internal

costs and making it possible to considerably reduce the costs of pursuing business while at the same time bearing the costs connected with developing new services. Such activity made it possible to reduce the scope of employment restructuring which resulted from the unfavourable situation on the market. Moreover, the Management Board of the company, following the principles of corporate social responsibility and in order to reduce the social cost of such changes, unwaveringly followed a staff policy based on its Voluntary Resignation Programme, minimising the social consequences of employment optimisation. Ensuring that the company is able to implement the development-related principles it accepted also requires a stable investment process. Last year, Poczta Polska S.A. made major investments in its logistical network and IT infrastructure. In spite of difficulties resulting from its environment, in 2014, the performance of a package of developmentrelated and optimisation activity following from Poczta Polska S.A. strategy made it possible for Poczta Polska S.A. to perform better in financial terms than in 2013, to retain a stable level of profitability, and to maintain the company’s financial solvency.

Factors and extraordinary events which significantly influenced the company’s financial performance Year 2014 was a time of major challenges for the company, resulting from a combination of negative external factors. The market of conventional letters has been dwindling for several years now. Due to the progressing electronization of correspondence and the growing significance of digital services (esubstitution), this tendency will only become more prominent. Considerable price pressure regarding the letter services sector is also of no small consequence. It has been intensifying ever since the liberalization of the postal market on 1 January 2013. Also in 2013, Poczta Polska S.A. lost a tender for providing postal services to courts and prosecutor’s offices in 2014 and 2015. This resulted in a major loss of revenues in 2014. Poczta Polska S.A. faced a number of challenges and it needed to adjust its business activity to the current situation on the market. It was necessary to strive towards retaining the position of a leader on the postal services market. Decisions, which turned out to have been the right ones but which were nevertheless very difficult, were taken fast and they, as well as the involvement of the organisation and the efforts it made, brought the desired effects. Poczta Polska S.A. proved that, in spite of the unfavourable market situation and in spite of strong competition, it is capable of maintaining its leading position on the market.

71

FINANCIAL PERFORMANCE OF POCZTA POLSKA IN 2014

Main factors influencing the company’s financial performance Postal services form the greatest part of the company’s revenue and, consequently, have the greatest impact on its financial performance. The fact that customers are more and more inclined towards electronic communication and shop online more and more frequently resulted in a number of steps being taken in order to adjust the company’s business profile to the tendencies currently affecting the market. A programme under the name of Exp@nsion was started in order to make good use of the dynamically developing e-commerce market and to increase the company’s share of that market. In 2014, the first stage of the programme was performed - a special website targeted at ecommerce entities was prepared, as well as a convenient eReturns platform and a package of additional financial and insurance services. Intensification of activity in the CEP sector resulted in an increase of income and volumes handled as part of that sector. Last year, the greatest challenge Poczta Polska S.A. faced was to counter the losses resulting from losing a tender for handling the correspondence of courts and prosecutor’s offices and from a rapid decrease of the number of letters. Poczta Polska S.A. faced a difficult problem - to find additional sources of income and to reduce the costs of its business activity. Reacting to the situation in which the company found itself, a programme called “Challenges affecting the development of Poczta Polska S.A. in 2014” was created.

70

Annual Report 2014

Its main objectives were met and, thanks to the programme, Poczta Polska S.A. showed that it is capable of effectively managing risk and of dynamically reacting to unfavourable market environment. Acting in line with the needs of its customers, the company extended the range of its electronic services rendered via the Envelo platform, created in 2013. Using the platform, private and business customers could access services such as the neopostcard, neoletter, neostamp, neoinvoice, and neobills. As far as services ordered via the Envelo platform are concerned, Poczta Polska S.A. ensures the physical performance of a considerable part of processes (e.g. delivery of correspondence, creating accounts for customers) and this is directly translated into significant revenues and income from cooperating with the subsidiary company operating the platform. Fast response to changes of market tendencies and to growing customer expectations made it possible for Poczta Polska S.A. to remain a trusted business partner, offering services which are attractive from the market perspective and in terms of quality. This is confirmed by Poczta Polska S.A. having won 90% of tenders in which it took part in 2014, procuring several key customers who had been using services offered by alternative operators. In 2014, Poczta Polska S.A. continued its efforts aimed at introducing changes adjusting its product range and its internal procedures to the current business situation and to customer expectations. A restructuring process carried out within the company required an intensification of efforts in development areas with the greatest potential (CEP, banking and insurance services, and e-services) and maintaining strict cost discipline. Poczta Polska S.A. organised numerous projects aimed at optimising internal

costs and making it possible to considerably reduce the costs of pursuing business while at the same time bearing the costs connected with developing new services. Such activity made it possible to reduce the scope of employment restructuring which resulted from the unfavourable situation on the market. Moreover, the Management Board of the company, following the principles of corporate social responsibility and in order to reduce the social cost of such changes, unwaveringly followed a staff policy based on its Voluntary Resignation Programme, minimising the social consequences of employment optimisation. Ensuring that the company is able to implement the development-related principles it accepted also requires a stable investment process. Last year, Poczta Polska S.A. made major investments in its logistical network and IT infrastructure. In spite of difficulties resulting from its environment, in 2014, the performance of a package of developmentrelated and optimisation activity following from Poczta Polska S.A. strategy made it possible for Poczta Polska S.A. to perform better in financial terms than in 2013, to retain a stable level of profitability, and to maintain the company’s financial solvency.

Factors and extraordinary events which significantly influenced the company’s financial performance Year 2014 was a time of major challenges for the company, resulting from a combination of negative external factors. The market of conventional letters has been dwindling for several years now. Due to the progressing electronization of correspondence and the growing significance of digital services (esubstitution), this tendency will only become more prominent. Considerable price pressure regarding the letter services sector is also of no small consequence. It has been intensifying ever since the liberalization of the postal market on 1 January 2013. Also in 2013, Poczta Polska S.A. lost a tender for providing postal services to courts and prosecutor’s offices in 2014 and 2015. This resulted in a major loss of revenues in 2014. Poczta Polska S.A. faced a number of challenges and it needed to adjust its business activity to the current situation on the market. It was necessary to strive towards retaining the position of a leader on the postal services market. Decisions, which turned out to have been the right ones but which were nevertheless very difficult, were taken fast and they, as well as the involvement of the organisation and the efforts it made, brought the desired effects. Poczta Polska S.A. proved that, in spite of the unfavourable market situation and in spite of strong competition, it is capable of maintaining its leading position on the market.

71

Individual profit and loss account of Poczta Polska

The performance of Poczta Polska in 2014, including its “business results” indicator (gross financial results after eliminating the impact of one-time events such as real estate sale and investments in real estate) was better than in 2013. Gross results were better by PLN 20.5 million (31.2%) and business results by PLN 15.7 million (27.6%) than the results in 2013. The situation was similar for net results and profit remaining at the company’s disposal - 48.2% and 47.7% more than in 2013 respectively.

million PLN

2014

2013

change

2013-2014

Total receipts

5 665.1

5 945.3

-280.3

-4.7%

Net receipts from the sale of products, goods, and materials

5 541.4

5 819.7

-278.3

-4.8%

Receipts from the sale of products plus markup from the sale of goods and materials

5 511.3

5 736.5

-225.1

-3.9%

Other operating receipts

72.8

75.6

-2.8

-3.7%

Financial receipts

50.9

50.1

0.8

1.6%

Business receipts

5 651.4

5 936.5

-285.1

-4.8%

Total costs

5 578.8

5 879.6

300.8

-5.1%

Costs of basic operating activity

5 509.6

5 808.6

-298.9

-5.1%

Costs of basic operating activity less the purchase value of goods and materials sold

5 479.6

5 725.4

-245.8

-4.3%

59.3

58.6

0.65

1.1%

Financial costs

9.9

12.4

-2.5

-20.1%

Business costs

5 578.8

5 879.6

-300.8

-5.1%

Gross results

86.2

65.7

20.5

31.2%

Sales results

31.8

11.1

20.7

186.4%

Other operating activity results

13.5

17.0

-3.4

-20.3%

Financial operations results

40.9

37.7

3.3

8.7%

Business results

72.5

56.8

15.7

27.6%

Net results

54.8

37.0

17.8

48.2%

Profit remaining at the company’s disposal / Losses to be covered

41.7

28.2

13.5

47.7%

Other operating costs

It was possible for the company to achieve net results better by PLN 17.8 million than in 2013 thanks to several factors: • generating sales results better by PLN 20.7 million than in 2013, in spite of the market conditions being unfavourable for the company, • an increase of financial operations income by PLN 3.3 million, • a decrease of the results of other operating activity by PLN 3.4 million.

Annual Report 2014

• CEP market services - thanks to the introduction of a new price and product offer for business customers as part of the Pocztex service and thanks to a complete remodelling of the offer of contractual parcel services. Changes of the product offer were aimed at maintaining the current tendencies regarding CEP sales and at maximising sales, particularly to business customers in the B2C and B2B segments. Facing the competition ensured a stable position for the company on the Polish courier services market. After a negative tendency affecting services in this segment of the market until the turn of 2011/2012, the company has seen a reversal of the situation on the market, • commission sale services and sales of commercial goods, a result of constantly extending the company’s commercial offer, • the Pallet Parcel service - thanks to intensifying sales activity and extending the offer, e.g. introducing an additional offer and organising a campaign promoting the service,

Changes of the financial performance of Poczta Polska S.A. (in million PLN) +17,8 (+48,2%)

54,8

• advertising services - thanks to advertisers returning to conventional advertising, deemed more effective, • banking and insurance services - thanks to continued development of services and sales activity carried out.

37,0 20,7

3,3

2,7

results of financial activity

income tax

-3,4

72

In increase of sales results by almost 190% in comparison with 2013 was an effect of strict cost discipline and an increase of revenues from:

net results in 2013

sales results

results of other operating activity

net results in 2014

It should also be emphasized that thanks to the introduction in November 2013 of a new service called “priority payment,” as well as thanks to an intensification of informational campaigns and introducing facilities for RTV subscribers, Poczta Polska S.A., for the first time in many years, also saw an increase of revenues from conventional financial services.

73

Individual profit and loss account of Poczta Polska

The performance of Poczta Polska in 2014, including its “business results” indicator (gross financial results after eliminating the impact of one-time events such as real estate sale and investments in real estate) was better than in 2013. Gross results were better by PLN 20.5 million (31.2%) and business results by PLN 15.7 million (27.6%) than the results in 2013. The situation was similar for net results and profit remaining at the company’s disposal - 48.2% and 47.7% more than in 2013 respectively.

million PLN

2014

2013

change

2013-2014

Total receipts

5 665.1

5 945.3

-280.3

-4.7%

Net receipts from the sale of products, goods, and materials

5 541.4

5 819.7

-278.3

-4.8%

Receipts from the sale of products plus markup from the sale of goods and materials

5 511.3

5 736.5

-225.1

-3.9%

Other operating receipts

72.8

75.6

-2.8

-3.7%

Financial receipts

50.9

50.1

0.8

1.6%

Business receipts

5 651.4

5 936.5

-285.1

-4.8%

Total costs

5 578.8

5 879.6

300.8

-5.1%

Costs of basic operating activity

5 509.6

5 808.6

-298.9

-5.1%

Costs of basic operating activity less the purchase value of goods and materials sold

5 479.6

5 725.4

-245.8

-4.3%

59.3

58.6

0.65

1.1%

Financial costs

9.9

12.4

-2.5

-20.1%

Business costs

5 578.8

5 879.6

-300.8

-5.1%

Gross results

86.2

65.7

20.5

31.2%

Sales results

31.8

11.1

20.7

186.4%

Other operating activity results

13.5

17.0

-3.4

-20.3%

Financial operations results

40.9

37.7

3.3

8.7%

Business results

72.5

56.8

15.7

27.6%

Net results

54.8

37.0

17.8

48.2%

Profit remaining at the company’s disposal / Losses to be covered

41.7

28.2

13.5

47.7%

Other operating costs

It was possible for the company to achieve net results better by PLN 17.8 million than in 2013 thanks to several factors: • generating sales results better by PLN 20.7 million than in 2013, in spite of the market conditions being unfavourable for the company, • an increase of financial operations income by PLN 3.3 million, • a decrease of the results of other operating activity by PLN 3.4 million.

Annual Report 2014

• CEP market services - thanks to the introduction of a new price and product offer for business customers as part of the Pocztex service and thanks to a complete remodelling of the offer of contractual parcel services. Changes of the product offer were aimed at maintaining the current tendencies regarding CEP sales and at maximising sales, particularly to business customers in the B2C and B2B segments. Facing the competition ensured a stable position for the company on the Polish courier services market. After a negative tendency affecting services in this segment of the market until the turn of 2011/2012, the company has seen a reversal of the situation on the market, • commission sale services and sales of commercial goods, a result of constantly extending the company’s commercial offer, • the Pallet Parcel service - thanks to intensifying sales activity and extending the offer, e.g. introducing an additional offer and organising a campaign promoting the service,

Changes of the financial performance of Poczta Polska S.A. (in million PLN) +17,8 (+48,2%)

54,8

• advertising services - thanks to advertisers returning to conventional advertising, deemed more effective, • banking and insurance services - thanks to continued development of services and sales activity carried out.

37,0 20,7

3,3

2,7

results of financial activity

income tax

-3,4

72

In increase of sales results by almost 190% in comparison with 2013 was an effect of strict cost discipline and an increase of revenues from:

net results in 2013

sales results

results of other operating activity

net results in 2014

It should also be emphasized that thanks to the introduction in November 2013 of a new service called “priority payment,” as well as thanks to an intensification of informational campaigns and introducing facilities for RTV subscribers, Poczta Polska S.A., for the first time in many years, also saw an increase of revenues from conventional financial services.

73

Financial standing and sources of asset coverage

Liabilities Structure of own capital

2 214.5

101.0

4.6%

49.6%

45.6%

Current assets

2 352.5

2 644.2

-292.0

-11.0%

50.4%

54.4%

Own capital

1 321.2

1 279.5

41.7

3.3%

28.3%

26.3%

Borrowed capital

3 346.5

3 579.2

-232.7

-6.5%

71.7%

73.7%

Balance sheet total

4 667.7

4 858.7

-191.0

-3.9%

100.0%

100.0%

Structure of fixed assets

-0.3%

-0.2%

1.2%

0.8%

1.5%

0.0%

+0.2p.p.

31 XII 2013 31 XII 2014

+0,2p.p. +1.1p.p.

-3.1p.p.

reserve for obligations

long-term obligations

short-term obligations

inter-period settlements

35.5%

intangible assets

fixed material assets

long-term receivables

long-term investments

-0.2pp 4.4%

5.4%

0.1%

0.1%

2.7%

2.0%

+0.01pp

7.1%

+1.7pp

4.2%

33.7%

Management of financial resources and financial solvency

+0.7pp

long-term inter-period settlements

38.2%

32.7%

-5.5pp Structure of current assets

31 XII 2013 31 XII 2014

13.3%

+0.6pp

2.9% short-term amounts due

short-term investments

3.6%

+0.7pp

0.8%

0.6%

reserves

Annual Report 2014

Structure of obligations and reserves for obligations

net profits deductions from from the net profits during business year business year

31 XII 2013 31 XII 2014

+0.2pp

74

net profit from previous years

reserve capital

+1.8pp

12.7%

The value of current assets decreased by PLN 292.0 million in comparison with 2013; this concerned mostly funds and other financial assets. This is a result of capital expenditure aimed at developing the company in spite of a decrease of funds generated by its operating activity.

share capital

11.7% 12.8%

2 315.5

• the value of obligations and reserves for covering obligations dropped by PLN 232.7 million (to PLN 3 346.5 million, i.e. 71.7% of the balance sheet total; value by the end of 2013: 73.7%). As far as this group of liabilities is concerned, the following changed: - reserves for covering obligations - a decrease of PLN 172.6 million, most resulting from usage of the reserves for restructuring and from a decrease of reserves for pension benefits and similar benefits, - inter-period obligations and settlements a decrease of PLN 60.1 million, mostly as a result of borrowed operations and payments to bank accounts and due to deliveries and services.

44.9%

Fixed assets

Assets An increase of the value of fixed assets is visible. By the end of 2014, they reached a level of PLN 2 315.5 million, increasing throughout that year by PLN 101.0 million. As far as the asset structure of the company is concerned, they form 49.6% of it (45.6% by the end of 2013). Assets increased: long-term financial assets, intangible property, and fixed material assets. Assets decreased: assets connected with deterred income tax.

10.8%

31 XII 2013

45.1%

31 XII 2014

1.6%

2014-2013

1.8%

change

12.2%

31 XII 2013

+2.5p.p.

-1.5p.p. +0.4p.p. -0.1p.p.

15.3%

31 XII 2014

31 XII 2013 31 XII 2014

8.3%

• an increase of own capital by PLN 41.7 million (to PLN 1 321.2 million, i.e. 28.3% of the balance sheet total; value by the end of 2013: 26.3%); this increase resulted chiefly from increasing the reserve capital using net profits achieved in 2013 and profits from preceding years,

Selected balance sheet information

million PLN

16.6%

As at 31 December 2014, the balance sheet total of Poczta Polska S.A. amounted to PLN 4 667.7 million, i.e. PLN 191.0 million less than at the end of 2013.

+0.7p.p. 15.9%

In 2014, the following changes regarding the structure of liabilities of Poczta Polska S.A. took place:

short-term inter-period settlements

Management of financial resources Management of financial resources in Poczta Polska S.A. take place within a consolidated account maintained by Bank Pocztowy S.A. and using secondary accounts maintained by various banks.

For comparison purposes: in 2014, the POLONIA rate (benchmark rate at the financial market), expressed as the weighted arithmetic mean of operations during O/N, was at 2.32%.

The company’s activity on the financial market is aimed at achieving as high a return on investment ratio as possible while at the same time maintaining sufficient availability of funds and safety of the capital involved, in line with the relevant internal regulations in force.

The financial solvency of the company in 2014 (i.e. its ability to promptly settle its current obligations) was additionally secured by means of a revolving credit line with a limit of: PLN 150 million and two additional credit lines in the form of intraday credit.

In spite of the Monetary Policy Council (RPP) having reduced the reference rate from 2.50% (at the beginning of 2014) to 2.00% (in October), the company, at its central level, managed to secure a deposit profitability rate at a level of 2.50% p.a., i.e. 2 base points above the WIBOR O/N rate, thanks to active management of funds.

75

Financial standing and sources of asset coverage

Liabilities Structure of own capital

2 214.5

101.0

4.6%

49.6%

45.6%

Current assets

2 352.5

2 644.2

-292.0

-11.0%

50.4%

54.4%

Own capital

1 321.2

1 279.5

41.7

3.3%

28.3%

26.3%

Borrowed capital

3 346.5

3 579.2

-232.7

-6.5%

71.7%

73.7%

Balance sheet total

4 667.7

4 858.7

-191.0

-3.9%

100.0%

100.0%

Structure of fixed assets

-0.3%

-0.2%

1.2%

0.8%

1.5%

0.0%

+0.2p.p.

31 XII 2013 31 XII 2014

+0,2p.p. +1.1p.p.

-3.1p.p.

reserve for obligations

long-term obligations

short-term obligations

inter-period settlements

35.5%

intangible assets

fixed material assets

long-term receivables

long-term investments

-0.2pp 4.4%

5.4%

0.1%

0.1%

2.7%

2.0%

+0.01pp

7.1%

+1.7pp

4.2%

33.7%

Management of financial resources and financial solvency

+0.7pp

long-term inter-period settlements

38.2%

32.7%

-5.5pp Structure of current assets

31 XII 2013 31 XII 2014

13.3%

+0.6pp

2.9% short-term amounts due

short-term investments

3.6%

+0.7pp

0.8%

0.6%

reserves

Annual Report 2014

Structure of obligations and reserves for obligations

net profits deductions from from the net profits during business year business year

31 XII 2013 31 XII 2014

+0.2pp

74

net profit from previous years

reserve capital

+1.8pp

12.7%

The value of current assets decreased by PLN 292.0 million in comparison with 2013; this concerned mostly funds and other financial assets. This is a result of capital expenditure aimed at developing the company in spite of a decrease of funds generated by its operating activity.

share capital

11.7% 12.8%

2 315.5

• the value of obligations and reserves for covering obligations dropped by PLN 232.7 million (to PLN 3 346.5 million, i.e. 71.7% of the balance sheet total; value by the end of 2013: 73.7%). As far as this group of liabilities is concerned, the following changed: - reserves for covering obligations - a decrease of PLN 172.6 million, most resulting from usage of the reserves for restructuring and from a decrease of reserves for pension benefits and similar benefits, - inter-period obligations and settlements a decrease of PLN 60.1 million, mostly as a result of borrowed operations and payments to bank accounts and due to deliveries and services.

44.9%

Fixed assets

Assets An increase of the value of fixed assets is visible. By the end of 2014, they reached a level of PLN 2 315.5 million, increasing throughout that year by PLN 101.0 million. As far as the asset structure of the company is concerned, they form 49.6% of it (45.6% by the end of 2013). Assets increased: long-term financial assets, intangible property, and fixed material assets. Assets decreased: assets connected with deterred income tax.

10.8%

31 XII 2013

45.1%

31 XII 2014

1.6%

2014-2013

1.8%

change

12.2%

31 XII 2013

+2.5p.p.

-1.5p.p. +0.4p.p. -0.1p.p.

15.3%

31 XII 2014

31 XII 2013 31 XII 2014

8.3%

• an increase of own capital by PLN 41.7 million (to PLN 1 321.2 million, i.e. 28.3% of the balance sheet total; value by the end of 2013: 26.3%); this increase resulted chiefly from increasing the reserve capital using net profits achieved in 2013 and profits from preceding years,

Selected balance sheet information

million PLN

16.6%

As at 31 December 2014, the balance sheet total of Poczta Polska S.A. amounted to PLN 4 667.7 million, i.e. PLN 191.0 million less than at the end of 2013.

+0.7p.p. 15.9%

In 2014, the following changes regarding the structure of liabilities of Poczta Polska S.A. took place:

short-term inter-period settlements

Management of financial resources Management of financial resources in Poczta Polska S.A. take place within a consolidated account maintained by Bank Pocztowy S.A. and using secondary accounts maintained by various banks.

For comparison purposes: in 2014, the POLONIA rate (benchmark rate at the financial market), expressed as the weighted arithmetic mean of operations during O/N, was at 2.32%.

The company’s activity on the financial market is aimed at achieving as high a return on investment ratio as possible while at the same time maintaining sufficient availability of funds and safety of the capital involved, in line with the relevant internal regulations in force.

The financial solvency of the company in 2014 (i.e. its ability to promptly settle its current obligations) was additionally secured by means of a revolving credit line with a limit of: PLN 150 million and two additional credit lines in the form of intraday credit.

In spite of the Monetary Policy Council (RPP) having reduced the reference rate from 2.50% (at the beginning of 2014) to 2.00% (in October), the company, at its central level, managed to secure a deposit profitability rate at a level of 2.50% p.a., i.e. 2 base points above the WIBOR O/N rate, thanks to active management of funds.

75

External sources of funding Leasing resulting from performing agreements concluded in previous years was the only usage of external funding for capital expenditure in 2014. The amount of capital instalments of leasing obligations paid off amounted to a total of PLN 57.0 million with interest costs at PLN 6.6 million.

Basic economic indicators

Poczta Polska S.A. restructuring in 2014 also pertained to the management of financial resources.

Selected profitability indicators

The company spent PLN 252.9 million on intangible assets, fixed materials assets, and financial assets - this was the main factor resulting in a decrease of the level of financial resources as at the end of 2014.

In 2014, the financial performance of Poczta Polska S.A. was better than in 2013. It was so in terms of its sales results and financial operations results, and, consequently, its net and gross results. Due to this, sales and circulation profitability indicators improved.

Financial solvency

Guarantees

Throughout the entire year 2014, the financial solvency of Poczta Polska S.A. was fully secured.

In 2014, Poczta Polska S.A. issued no guarantees or financial guarantees.

ROA was also higher than in 2013, demonstrating that the efficiency with which the company used its assets increased. An increase of ROE resulted from the increasing efficiency with which the company uses its own capital.

Basic values of the cash flow account

Selected profitability indicators

million PLN 2014

2013

change

2013-2014

A. Cash flow from operating activity

Changes regarding the level and structure of assets had a minor impact on the level of assets productivity. Current assets generated more sales revenues, as demonstrated by an increase of the current assets productivity indicator. A decrease of the fixed assets productivity indicator results from a decrease of sales revenues and the simultaneous increase of the value of fixed assets. The value of the total asset turnover indicator was similar to that of 2013

2014

2013

Gross turnover profitability indicators; gross financial results / total receipts

1.52%

1.11%

Gross sales profitability indicator; gross financial results / sales receipts

1.56%

1.13%

Net sales profitability indicator; net financial results / sales receipts

0.99%

0.64%

54.8

37.0

17.8

48.2%

II. Adjustment of net results

-168.8

-114.3

-54.5

-47.7%

ROA - return on assets indicator; net financial results / average annual total level of assets

1.15%

0.75%

III. Net funds from operating activity

-114.0

-77.3

-36.6

-47.4%

ROE - profitability indicator of own capital (equity); net financial results / average annual own capital

4.21%

3.01%

I. Net financial results

B. Cash flow from investment activity I Inflow

101.5

57.0

44.5

78.2%

II Expenses

252.9

146.5

106.4

72.6%

-151.4

-89.5

-61.9

-69.1%

III. Net cash flow from investment activity C. Cash flow from financial activity I Inflow II Expenses

63.6

60.5

3.1

5.2%

-63.6

-60.5

-3.1

-5.2%

D. Total net cash flow (A.III + B.III + C.III)

-328.9

-227.3

-101.6

-44.7%

E. Balance sheet change of the level of funds

-328.9

-227.3

-101.6

-44.7%

F. Funds at the beginning of the period

1 854.2

2 081.5

-227.3

-10.9%

G. Funds at the end of the period

1 525.2

2 854.1

-328.9

-17.7%

III. Net cash flow from financial activity

76

Annual Report 2014

Challenges for Poczta Polska S.A. development in 2014 The “Challenged for Poczta Polska S.A. development in 2014” programme was started at the beginning of 2014. It was aimed at making up for financial performance losses resulting from Poczta Polska S.A. losing the tender for providing financial services organised by Purchasing Centre for the Judiciary Sector (Centrum Zakupów dla Sądownictwa). As part of the Programme, 59 cost- and income-related initiatives were started. Their financial objectives, thanks to smooth cooperation of the entire organisation, were met. Total planned financial effects of the Programme were at PLN 260 million but they reached a level of PLN 320 million, exceeding the planned financial objective of the Programme by PLN 60 million.

77

External sources of funding Leasing resulting from performing agreements concluded in previous years was the only usage of external funding for capital expenditure in 2014. The amount of capital instalments of leasing obligations paid off amounted to a total of PLN 57.0 million with interest costs at PLN 6.6 million.

Basic economic indicators

Poczta Polska S.A. restructuring in 2014 also pertained to the management of financial resources.

Selected profitability indicators

The company spent PLN 252.9 million on intangible assets, fixed materials assets, and financial assets - this was the main factor resulting in a decrease of the level of financial resources as at the end of 2014.

In 2014, the financial performance of Poczta Polska S.A. was better than in 2013. It was so in terms of its sales results and financial operations results, and, consequently, its net and gross results. Due to this, sales and circulation profitability indicators improved.

Financial solvency

Guarantees

Throughout the entire year 2014, the financial solvency of Poczta Polska S.A. was fully secured.

In 2014, Poczta Polska S.A. issued no guarantees or financial guarantees.

ROA was also higher than in 2013, demonstrating that the efficiency with which the company used its assets increased. An increase of ROE resulted from the increasing efficiency with which the company uses its own capital.

Basic values of the cash flow account

Selected profitability indicators

million PLN 2014

2013

change

2013-2014

A. Cash flow from operating activity

Changes regarding the level and structure of assets had a minor impact on the level of assets productivity. Current assets generated more sales revenues, as demonstrated by an increase of the current assets productivity indicator. A decrease of the fixed assets productivity indicator results from a decrease of sales revenues and the simultaneous increase of the value of fixed assets. The value of the total asset turnover indicator was similar to that of 2013

2014

2013

Gross turnover profitability indicators; gross financial results / total receipts

1.52%

1.11%

Gross sales profitability indicator; gross financial results / sales receipts

1.56%

1.13%

Net sales profitability indicator; net financial results / sales receipts

0.99%

0.64%

54.8

37.0

17.8

48.2%

II. Adjustment of net results

-168.8

-114.3

-54.5

-47.7%

ROA - return on assets indicator; net financial results / average annual total level of assets

1.15%

0.75%

III. Net funds from operating activity

-114.0

-77.3

-36.6

-47.4%

ROE - profitability indicator of own capital (equity); net financial results / average annual own capital

4.21%

3.01%

I. Net financial results

B. Cash flow from investment activity I Inflow

101.5

57.0

44.5

78.2%

II Expenses

252.9

146.5

106.4

72.6%

-151.4

-89.5

-61.9

-69.1%

III. Net cash flow from investment activity C. Cash flow from financial activity I Inflow II Expenses

63.6

60.5

3.1

5.2%

-63.6

-60.5

-3.1

-5.2%

D. Total net cash flow (A.III + B.III + C.III)

-328.9

-227.3

-101.6

-44.7%

E. Balance sheet change of the level of funds

-328.9

-227.3

-101.6

-44.7%

F. Funds at the beginning of the period

1 854.2

2 081.5

-227.3

-10.9%

G. Funds at the end of the period

1 525.2

2 854.1

-328.9

-17.7%

III. Net cash flow from financial activity

76

Annual Report 2014

Challenges for Poczta Polska S.A. development in 2014 The “Challenged for Poczta Polska S.A. development in 2014” programme was started at the beginning of 2014. It was aimed at making up for financial performance losses resulting from Poczta Polska S.A. losing the tender for providing financial services organised by Purchasing Centre for the Judiciary Sector (Centrum Zakupów dla Sądownictwa). As part of the Programme, 59 cost- and income-related initiatives were started. Their financial objectives, thanks to smooth cooperation of the entire organisation, were met. Total planned financial effects of the Programme were at PLN 260 million but they reached a level of PLN 320 million, exceeding the planned financial objective of the Programme by PLN 60 million.

77

Consolidated financial performance of Poczta Polska Group Poczta Polska S.A., as part of its income-related projects:

Poczta Polska S.A:, as part of its cost-related projects:

ASSETS change 2014-2013

million PLN

• introduced new products and services to its offer; this applied to letter services, parcel services, the sale of goods and philately materials, and circulation abroad, • took steps aimed at maximising revenues generated by services already in its offer by means of, inter alia, training employees of post offices in up-selling and cross-selling, internal promotion of services, and contests for employees. The discipline and efforts of business units involved in performing revenue-related projects resulted in successful performance of 98% of such projects, in spite of the increasingly hard and competitive market.

• intensified the process for restructuring the network of its agencies and made procedures for using vehicles by postmen and support services more effective - in the Sales Division; • introduced systemic solutions, implementing, inter alia, consumption standards and limits and a principle of co-responsibility for users and managers of particular cost items - in the Infrastructure Division; • optimised and standardized processes - in the Logistical Operations Division; • centralized IT processes pertaining to, in particular, purchasing systems and equipment maintenance and optimized telephone line management processes - in the IT and Telecommunication Division;

31 XII 2014

Savings resulting from performing cost-related initiatives exceeded the planned objective and reached a level of 135% of the plan. Thanks to such activity, the financial results of the programme was greater by PLN 60 million (+23%) than expected. The cost-related initiatives performed and optimisation activity related to them will continue to bring positive results also in the years to come. In addition to its strictly financial results, the Development Challenges Programme spurred increased involvement among employees and presented to them their role in performing initiatives as part of the programme and their actual impact on the company’s financial performance. Successful performance of the Development Challenges Programme demonstrated that employees of Poczta Polska S.A. can focus all their efforts in order to prove their dedication to and responsibility for achieving business goals and can work together to meet the very ambitious goals set for them.

Annual Report 2014

2014

2013

2 214.5

101.0

4.6%

49.6%

45.6%

127.1

96.7

30.4

31.4%

2.7%

2.0%

1 657.4

1 636.5

20.8

1.3%

35.5%

33.7%

3.4

3.1

0.3

10.6%

0.1%

0.1%

Long-term investments

332.7

263.2

69.5

26.4%

7.1%

5.4%

Long-term inter-period settlements

194.9

214.9

-20.0

-9.3%

4.2%

4.4%

2 352.5

2 644.2

-292.0

-11.0%

50.4%

54.4%

38.7

31.2

7.5

24.0%

0.8%

0.6%

619.7

618.3

1.4

0.2%

13.3%

12.7%

1 527.2

1 854.2

-327.0

-17.6%

32.7%

38.2%

166.5

140.5

26.1

18.5%

3.6%

2.9%

4 667.7

4 858.7

-191.0

-3.9%

100.0%

100.0%

Intangible assets Fixed material assets Long-term receivables

Current assets Reserves Short-term receivables

Short-term inter-period settlements TOTAL ASSETS

LIABILITIES change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

stgructure

%

2014

2013

3.3%

28.3%

26.3%

16.6%

15.9%

1 321.2

1 279.5

Share capital

774.1

774.1

Reserve capital

505.3

402.7

102.6

25.5%

10.8%

8.3%

Profit (loss) from previous years

0.0

74.4

-74.4

-100.0%

0.0%

1.5%

Net profit (loss) in business year

54.8

37.0

17.8

48.2%

1.2%

0.8%

-13.1

-8.7

-4.4

-50.1%

-0.3%

-0.2%

3 346.6

3 579.3

-232.7

-6.5%

71.7%

73.7%

571.0

743.6

-172.6

-23.2%

12.2%

15.3%

Long-term obligations

75.1

85.4

-10.3

-12.1%

1.6%

1.8%

Short-term obligations

2 105.5

2 183.2

-77.7

-3.6%

45.1%

44.9%

595.0

567.0

28.0

4.9%

12.7%

11.7%

4 667.7

4 858.7

-191.0

-3.9%

100.0%

100.0%

Own capital/funds

Deductions from net profit in business year Obligations and reserves for obligations Reserves for obligations

Inter-period settlements TOTAL LIABILITIES

78

%

2 315.6

Fixed assets

Short-term investments

• implemented solutions aimed at employment optimisation (particularly in the area of administration) and at a more reasonable usage of vacancies and resources related to the costs of remuneration (reimbursement from ZUS).

31 XII 2013 million PLN

structure

41.7

79

Consolidated financial performance of Poczta Polska Group Poczta Polska S.A., as part of its income-related projects:

Poczta Polska S.A:, as part of its cost-related projects:

ASSETS change 2014-2013

million PLN

• introduced new products and services to its offer; this applied to letter services, parcel services, the sale of goods and philately materials, and circulation abroad, • took steps aimed at maximising revenues generated by services already in its offer by means of, inter alia, training employees of post offices in up-selling and cross-selling, internal promotion of services, and contests for employees. The discipline and efforts of business units involved in performing revenue-related projects resulted in successful performance of 98% of such projects, in spite of the increasingly hard and competitive market.

• intensified the process for restructuring the network of its agencies and made procedures for using vehicles by postmen and support services more effective - in the Sales Division; • introduced systemic solutions, implementing, inter alia, consumption standards and limits and a principle of co-responsibility for users and managers of particular cost items - in the Infrastructure Division; • optimised and standardized processes - in the Logistical Operations Division; • centralized IT processes pertaining to, in particular, purchasing systems and equipment maintenance and optimized telephone line management processes - in the IT and Telecommunication Division;

31 XII 2014

Savings resulting from performing cost-related initiatives exceeded the planned objective and reached a level of 135% of the plan. Thanks to such activity, the financial results of the programme was greater by PLN 60 million (+23%) than expected. The cost-related initiatives performed and optimisation activity related to them will continue to bring positive results also in the years to come. In addition to its strictly financial results, the Development Challenges Programme spurred increased involvement among employees and presented to them their role in performing initiatives as part of the programme and their actual impact on the company’s financial performance. Successful performance of the Development Challenges Programme demonstrated that employees of Poczta Polska S.A. can focus all their efforts in order to prove their dedication to and responsibility for achieving business goals and can work together to meet the very ambitious goals set for them.

Annual Report 2014

2014

2013

2 214.5

101.0

4.6%

49.6%

45.6%

127.1

96.7

30.4

31.4%

2.7%

2.0%

1 657.4

1 636.5

20.8

1.3%

35.5%

33.7%

3.4

3.1

0.3

10.6%

0.1%

0.1%

Long-term investments

332.7

263.2

69.5

26.4%

7.1%

5.4%

Long-term inter-period settlements

194.9

214.9

-20.0

-9.3%

4.2%

4.4%

2 352.5

2 644.2

-292.0

-11.0%

50.4%

54.4%

38.7

31.2

7.5

24.0%

0.8%

0.6%

619.7

618.3

1.4

0.2%

13.3%

12.7%

1 527.2

1 854.2

-327.0

-17.6%

32.7%

38.2%

166.5

140.5

26.1

18.5%

3.6%

2.9%

4 667.7

4 858.7

-191.0

-3.9%

100.0%

100.0%

Intangible assets Fixed material assets Long-term receivables

Current assets Reserves Short-term receivables

Short-term inter-period settlements TOTAL ASSETS

LIABILITIES change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

stgructure

%

2014

2013

3.3%

28.3%

26.3%

16.6%

15.9%

1 321.2

1 279.5

Share capital

774.1

774.1

Reserve capital

505.3

402.7

102.6

25.5%

10.8%

8.3%

Profit (loss) from previous years

0.0

74.4

-74.4

-100.0%

0.0%

1.5%

Net profit (loss) in business year

54.8

37.0

17.8

48.2%

1.2%

0.8%

-13.1

-8.7

-4.4

-50.1%

-0.3%

-0.2%

3 346.6

3 579.3

-232.7

-6.5%

71.7%

73.7%

571.0

743.6

-172.6

-23.2%

12.2%

15.3%

Long-term obligations

75.1

85.4

-10.3

-12.1%

1.6%

1.8%

Short-term obligations

2 105.5

2 183.2

-77.7

-3.6%

45.1%

44.9%

595.0

567.0

28.0

4.9%

12.7%

11.7%

4 667.7

4 858.7

-191.0

-3.9%

100.0%

100.0%

Own capital/funds

Deductions from net profit in business year Obligations and reserves for obligations Reserves for obligations

Inter-period settlements TOTAL LIABILITIES

78

%

2 315.6

Fixed assets

Short-term investments

• implemented solutions aimed at employment optimisation (particularly in the area of administration) and at a more reasonable usage of vacancies and resources related to the costs of remuneration (reimbursement from ZUS).

31 XII 2013 million PLN

structure

41.7

79

BALANCE OF RESULTS

BALANCE OF CASH FLOWS change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

%

Receipts

5 665.1

5 945.3

-280.3

-4.7%

Net receipts from the sale of products, goods, and materials

5 541.4

5 819.7

-278.3

-4.8%

Receipts from the sale of services plus markup from the sale of goods and materials

5 511.3

5 736.5

-225.1

-3.9%

Other operating receipts

72.8

75.6

-2.8

-3.7%

Financial receipts

50.9

50.1

0.8

1.6%

Costs

5 578.8

5 879.6

-300.8

-5.1%

Costs of basic operating activity

5 509.6

5 808.6

-298.9

-5.1%

change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

%

A. Cash flow from operating activity 54.8

37.0

17.8

48.2%

II. Adjustment of net results

-168.8

-114.3

-54.5

-47.7%

III. Net funds from operating activity

-114.0

-77.3

-36.6

-47.4%

I Inflow

101.5

57.0

44.6

78.2%

II Expenses

252.9

146.5

106.4

72.6%

-151.4

-89.5

-61.8

-69.1%

63.6

60.5

3.1

5.2%

-63.6

-60.5

-3.1

-5.2%

I. Net financial results

B. Cash flow from investment activity

III. Net cash flow from investment activity Costs of basic operating activity less the purchase value of goods and materials sold

C. Cash flow from financial activity

5 479.6

5 725.4

-245.8

-4.3%

59.3

58.6

0.6

1.1%

Financial costs

9.9

12.4

-2.5

-20.1%

II Expenses

Gross results

86.2

65.7

20.5

31.2%

III. Net cash flow from financial activity

Sales results

31.8

11.1

20.7

186.4%

D. Total net cash flow (A.III + B.III + C.III)

-328.9

-227.3

-101.6

-44.7%

Other operating activity results

13.5

17.0

-3.4

-20.3%

E. Balance sheet change of the level of funds

-328.9

-227.3

-101.6

-44.7%

Financial operations results

40.9

37.7

3.3

8.7%

F. Funds at the beginning of the period

1 854.2

2 081.5

-227.3

-10.9%

Net results

54.8

37.0

17.8

48.2%

G. Funds at the end of the period

1 525.2

1 854.1

-328.9

-17.7%

Profit remaining at the company’s disposal / Losses to be covered

41.7

28.2

13.5

47.7% SELECTED PROFITABILITY INDICATORS

2014

2013

Gross turnover profitability indicators; gross financial results / total receipts

1.52%

1.11%

ROA - return on assets indicator; net financial results / average annual total level of assets

1.15%

0.75%

ROE - profitability indicator of own capital (equity); net financial results / average annual own capital

4.21%

3.01%

2014

2013

Gross sales profitability indicator; gross financial results / sales receipts

1.56%

1.13%

Net sales profitability indicator; net financial results / sales receipts

0.99%

0.64%

Other operating costs

B. Costs of products, goods, and materials sold: - including sales to associated entities

2014

2013

5 130.7

5 441.2

57.2

54.3

I

Production costs of products sold

5 100.6

5 358.0

II

Value of goods and materials sold

30.1

83.2

C

Gross sales profit

410.7

378.5

D

Costs of commercial activity

18.7

28.2

E

Common workplace costs

360.3

339.2

I Inflow

SALES PROFITABILITY INDICATOR

80

Annual Report 2014

81

BALANCE OF RESULTS

BALANCE OF CASH FLOWS change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

%

Receipts

5 665.1

5 945.3

-280.3

-4.7%

Net receipts from the sale of products, goods, and materials

5 541.4

5 819.7

-278.3

-4.8%

Receipts from the sale of services plus markup from the sale of goods and materials

5 511.3

5 736.5

-225.1

-3.9%

Other operating receipts

72.8

75.6

-2.8

-3.7%

Financial receipts

50.9

50.1

0.8

1.6%

Costs

5 578.8

5 879.6

-300.8

-5.1%

Costs of basic operating activity

5 509.6

5 808.6

-298.9

-5.1%

change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

%

A. Cash flow from operating activity 54.8

37.0

17.8

48.2%

II. Adjustment of net results

-168.8

-114.3

-54.5

-47.7%

III. Net funds from operating activity

-114.0

-77.3

-36.6

-47.4%

I Inflow

101.5

57.0

44.6

78.2%

II Expenses

252.9

146.5

106.4

72.6%

-151.4

-89.5

-61.8

-69.1%

63.6

60.5

3.1

5.2%

-63.6

-60.5

-3.1

-5.2%

I. Net financial results

B. Cash flow from investment activity

III. Net cash flow from investment activity Costs of basic operating activity less the purchase value of goods and materials sold

C. Cash flow from financial activity

5 479.6

5 725.4

-245.8

-4.3%

59.3

58.6

0.6

1.1%

Financial costs

9.9

12.4

-2.5

-20.1%

II Expenses

Gross results

86.2

65.7

20.5

31.2%

III. Net cash flow from financial activity

Sales results

31.8

11.1

20.7

186.4%

D. Total net cash flow (A.III + B.III + C.III)

-328.9

-227.3

-101.6

-44.7%

Other operating activity results

13.5

17.0

-3.4

-20.3%

E. Balance sheet change of the level of funds

-328.9

-227.3

-101.6

-44.7%

Financial operations results

40.9

37.7

3.3

8.7%

F. Funds at the beginning of the period

1 854.2

2 081.5

-227.3

-10.9%

Net results

54.8

37.0

17.8

48.2%

G. Funds at the end of the period

1 525.2

1 854.1

-328.9

-17.7%

Profit remaining at the company’s disposal / Losses to be covered

41.7

28.2

13.5

47.7% SELECTED PROFITABILITY INDICATORS

2014

2013

Gross turnover profitability indicators; gross financial results / total receipts

1.52%

1.11%

ROA - return on assets indicator; net financial results / average annual total level of assets

1.15%

0.75%

ROE - profitability indicator of own capital (equity); net financial results / average annual own capital

4.21%

3.01%

2014

2013

Gross sales profitability indicator; gross financial results / sales receipts

1.56%

1.13%

Net sales profitability indicator; net financial results / sales receipts

0.99%

0.64%

Other operating costs

B. Costs of products, goods, and materials sold: - including sales to associated entities

2014

2013

5 130.7

5 441.2

57.2

54.3

I

Production costs of products sold

5 100.6

5 358.0

II

Value of goods and materials sold

30.1

83.2

C

Gross sales profit

410.7

378.5

D

Costs of commercial activity

18.7

28.2

E

Common workplace costs

360.3

339.2

I Inflow

SALES PROFITABILITY INDICATOR

80

Annual Report 2014

81

ASSET PRODUCTIVITY INDICATORS

2014

2013

GROUP BALANCE OF RESULTS

Fixed assets turnover rate; sales receipts / fixed assets

2.39

2.63

Current assets turnover rate; sales receipts / current assets

2.36

2.20

change 2014-2013

million PLN

31 XII 2014

Total assets turnover rate; sales receipts / total assets

1.19

ASSET FINANCING INDICATORS

2014

1.20

2013

Asset coverage with own capital indicator; own capital / total assets

0.28

0.26

Fixed asset coverage with own capital indicator; own capital / fixed assets

0.57

0.58

Fixed asset coverage with constant capital indicator; (own capital + reserve capital for obligations + long-term obligations) / fixed assets

0.85

0.95

1.15

1.04

FINANCIAL SOLVENCY INDICATORS

2014

2013

Current financial solvency indicators (3rd level); current assets / short-term obligations

1.12

1.21

Fast financial solvency indicators (2nd level); (current assets - reserves) / short-term obligations

1.10

1.20

6 319.7

6.509.4

-189.7

-2.9%

Net receipts from the sale of products, goods, and materials

6 058.8

6 317.0

-258.2

-4.1%

Net receipts from the sale of products

5 983.6

6 174.0

-190.4

-3.1%

Net receipts from the sale of goods, and materials

75.2

143.0

-67.8

-47.4%

Other operating receipts

81.3

85.8

-4.5

-5.2%

179.5

106.5

73.0

68.5%

Costs

6 183.9

6 422.3

238.4

-3.7%

Costs of basic operating activity

5 921.9

6 229.4

-307.5

-4.9%

65.8

61.9

3.9

6.3%

196.2

131.1

65.1

49.7%

6.2

6.5

-0.3

-4.6%

Gross results

142.0

93.5

48.5

51.9%

Sales results

136.9

87.7

49.2

56.1%

15.5

24.0

-8.5

-35.4%

Financial operations results

-16.7

-24.6

7.9

32.1%

Net results

77.4

44.0

33.4

75.9%

Profit remaining at the company’s disposal / Losses to be covered

64.3

35.3

29.0

82.2%

Financial receipts

Other operating costs

Profit (loss) from participation in subordinate units, evaluated using the equity method

Other operating activity results

Instant financial solvency indicators (2nd level); short-term investments / short-term obligations

0.73

%

Receipts

Financial costs

Current asset coverage with short-term capital indicator; (short-term obligations + inter-period settlements) / current assets

31 XII 2013 million PLN

0.85

SELECTED FINANCIAL DATA change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

%

Receipts

5 665.1

5 945.3

-280.3

-4.7%

Costs

5 578.8

5 879.6

-300.8

-5.1%

Receipts

6 319.7

6.509.4

-189.7

-2.9%

Business results1

72.5

56.8

15.7

27.6%

Costs

6 183.9

6 422.3

-238.4

-3.7%

Gross financial results

86.2

65.7

20.5

31.2%

Business results 2

128.3

84.7

43.6

27.6%

Net financial results

54.8

37.0

17.8

48.2%

Gross financial results

142.0

93.5

48.5

31.2%

Profit remaining at the company’s disposal / Losses to be covered

41.7

28.2

13.5

47.7%

Net financial results

77.4

44.0

33.4

48.2%

251.2

221.2

30.0

13.6%

Profit remaining at the company’s disposal / Losses to be covered

64.3

35.3

29.0

47.7%

EBITDA

1 Business results 1 - gross results after elimination of real estate sales and investments in real estate within Poczta Polska S.A.

82

%

SELECTED FINANCIAL DATA

Annual Report 2014

2 Business results 2 - gross results after elimination of real estate sales and investments in real estate within Poczta Polska S.A.

83

ASSET PRODUCTIVITY INDICATORS

2014

2013

GROUP BALANCE OF RESULTS

Fixed assets turnover rate; sales receipts / fixed assets

2.39

2.63

Current assets turnover rate; sales receipts / current assets

2.36

2.20

change 2014-2013

million PLN

31 XII 2014

Total assets turnover rate; sales receipts / total assets

1.19

ASSET FINANCING INDICATORS

2014

1.20

2013

Asset coverage with own capital indicator; own capital / total assets

0.28

0.26

Fixed asset coverage with own capital indicator; own capital / fixed assets

0.57

0.58

Fixed asset coverage with constant capital indicator; (own capital + reserve capital for obligations + long-term obligations) / fixed assets

0.85

0.95

1.15

1.04

FINANCIAL SOLVENCY INDICATORS

2014

2013

Current financial solvency indicators (3rd level); current assets / short-term obligations

1.12

1.21

Fast financial solvency indicators (2nd level); (current assets - reserves) / short-term obligations

1.10

1.20

6 319.7

6.509.4

-189.7

-2.9%

Net receipts from the sale of products, goods, and materials

6 058.8

6 317.0

-258.2

-4.1%

Net receipts from the sale of products

5 983.6

6 174.0

-190.4

-3.1%

Net receipts from the sale of goods, and materials

75.2

143.0

-67.8

-47.4%

Other operating receipts

81.3

85.8

-4.5

-5.2%

179.5

106.5

73.0

68.5%

Costs

6 183.9

6 422.3

238.4

-3.7%

Costs of basic operating activity

5 921.9

6 229.4

-307.5

-4.9%

65.8

61.9

3.9

6.3%

196.2

131.1

65.1

49.7%

6.2

6.5

-0.3

-4.6%

Gross results

142.0

93.5

48.5

51.9%

Sales results

136.9

87.7

49.2

56.1%

15.5

24.0

-8.5

-35.4%

Financial operations results

-16.7

-24.6

7.9

32.1%

Net results

77.4

44.0

33.4

75.9%

Profit remaining at the company’s disposal / Losses to be covered

64.3

35.3

29.0

82.2%

Financial receipts

Other operating costs

Profit (loss) from participation in subordinate units, evaluated using the equity method

Other operating activity results

Instant financial solvency indicators (2nd level); short-term investments / short-term obligations

0.73

%

Receipts

Financial costs

Current asset coverage with short-term capital indicator; (short-term obligations + inter-period settlements) / current assets

31 XII 2013 million PLN

0.85

SELECTED FINANCIAL DATA change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

change 2014-2013

million PLN

31 XII 2014

31 XII 2013 million PLN

%

Receipts

5 665.1

5 945.3

-280.3

-4.7%

Costs

5 578.8

5 879.6

-300.8

-5.1%

Receipts

6 319.7

6.509.4

-189.7

-2.9%

Business results1

72.5

56.8

15.7

27.6%

Costs

6 183.9

6 422.3

-238.4

-3.7%

Gross financial results

86.2

65.7

20.5

31.2%

Business results 2

128.3

84.7

43.6

27.6%

Net financial results

54.8

37.0

17.8

48.2%

Gross financial results

142.0

93.5

48.5

31.2%

Profit remaining at the company’s disposal / Losses to be covered

41.7

28.2

13.5

47.7%

Net financial results

77.4

44.0

33.4

48.2%

251.2

221.2

30.0

13.6%

Profit remaining at the company’s disposal / Losses to be covered

64.3

35.3

29.0

47.7%

EBITDA

1 Business results 1 - gross results after elimination of real estate sales and investments in real estate within Poczta Polska S.A.

82

%

SELECTED FINANCIAL DATA

Annual Report 2014

2 Business results 2 - gross results after elimination of real estate sales and investments in real estate within Poczta Polska S.A.

83

ASSETS million PLN

31 XII 2014 Fixed assets Intangible assets Value of subordinate unit businesses Fixed material assets Long-term receivables Long-term investments Long-term inter-period settlements Current assets Reserves Short-term receivables Short-term investments Short-term inter-period settlements TOTAL ASSETS

structure

change 2014-2013

31 XII 2013 million PLN

%

2014

2013

7 551.4

7 296.5

254.9

3.5%

65.9%

65.4%

181.3

135.2

46.1

34.1%

1.6%

1.2%

2.4

0.02%

2.4

1 708.1

1 684.4

23.7

1.4%

14.9%

15.1%

4.3

3.5

0.8

22.9%

0.04%

0.03%

5 413.1

5 219.2

193.9

3.7%

47.3%

46.8%

242.2

254.2

-12.0

-4.7%

2.1%

2.3%

3 904.5

3 853.9

50.6

1.3%

34.1%

34.6%

40.0

31.9

8.1

25.4%

0.3%

0.3%

558.3

561.4

-3.1

-0.6%

4.9%

5.0%

3 131.1

3 107.6

23.5

0.8%

27.3%

27.9%

175.1

153.0

22.1

14.4%

1.5%

1.4%

11 455.9

11 150.4

305.5

2.7%

100.0%

100.0%

LIABILITIES

31 XII 2014

31 XII 2013 million PLN

%

2014

2013

13.2%

12.9%

1 507.0

1 439.5

67.5

4.7%

Share capital

774.1

774.1

0.0%

6.8% 6.9%

Reserve capital

502.7

399.1

103.6

26.0%

4.4%

3.6%

2.2

-1.0

3.2

320.0%

0.02%

-0.01%

Other reserve capital

180.4

166.4

14.0

8.4%

1.6%

1.5%

Profit (loss) from previous years

-16.7

65.6

-82.3

-125.5%

-0.1%

0.6%

Net profit (loss) in business year

77.4

44.0

33.4

75.9%

0.7%

0.4%

Deductions from net profit in business year

-13.1

-8.7

-4.4

-50.6%

-0.1%

-0.1%

Minority capital

115.0

101.9

13.1

12.9%

1.0%

0.9%

9 833.9

9 609.0

224.9

2.3%

85.8%

86.2%

Reserves for obligations

609.8

771.6

-161.8

-21.0%

5.3%

6.9%

Long-term obligations

908.2

646.6

261.6

40.5%

7.9%

5.8%

Short-term obligations

7 697.6

7 547.4

150.2

2.0%

67.2%

67.7%

618.3

643.4

-25.1

-3.9%

5.4%

5.8%

11 455.9

11 150.4

305.5

2.7%

100.0%

100.0%

Own capital/funds

Evaluation update capital

Obligations and reserves for obligations

Inter-period settlements TOTAL LIABILITIES

84

structure

change 2014-2013

million PLN

Annual Report 2014

SELECTED PROFITABILITY INDICATORS

2014

2013

Gross turnover profitability indicator; gross financial results / total receipts

2.25%

1.44%

ROA - asset profitability indicator; net financial results / average annual total level of assets

0.68%

0.40%

ROE - profitability indicator of own capital (equity); net financial results / average annual own capital

5.25%

3.17%

Total assets turnover rate; sales receipts / total assets

0.53

0.57

SALES PROFITABILITY INDICATOR

2014

2013

Gross sales profitability indicator; gross financial results / sales receipts

2.34%

1.48%

Net sales profitability indicator; net financial results / sales receipts

1.28%

0.70%

ASSET PRODUCTIVITY INDICATORS

2014

2013

Fixed assets turnover rate; sales receipts / fixed assets

0.80

0.87

Current assets turnover rate; sales receipts / current assets

1.55

1.64

ASSET FINANCING INDICATORS

2014

2013

Asset coverage with own capital indicator; own capital / total assets

0.13

0.13

Fixed asset coverage with own capital indicator; own capital / fixed assets

0.20

0.20

Fixed asset coverage with constant capital indicator; (own capital + reserve capital for obligations + long-term obligations) / fixed assets

0.40

0.39

Current asset coverage with short-term capital indicator; (short-term obligations + inter-period settlements) / current assets

2.13

2.13

FINANCIAL SOLVENCY INDICATORS

2014

2013

Current financial solvency indicators (3rd level); current assets / short-term obligations

0.51

0.51

Fast financial solvency indicators (2nd level); (current assets - reserves) / short-term obligations

0.50

0.51

Instant financial solvency indicators (2nd level); short-term investments / short-term obligations

0.41

0.41

85

ASSETS million PLN

31 XII 2014 Fixed assets Intangible assets Value of subordinate unit businesses Fixed material assets Long-term receivables Long-term investments Long-term inter-period settlements Current assets Reserves Short-term receivables Short-term investments Short-term inter-period settlements TOTAL ASSETS

structure

change 2014-2013

31 XII 2013 million PLN

%

2014

2013

7 551.4

7 296.5

254.9

3.5%

65.9%

65.4%

181.3

135.2

46.1

34.1%

1.6%

1.2%

2.4

0.02%

2.4

1 708.1

1 684.4

23.7

1.4%

14.9%

15.1%

4.3

3.5

0.8

22.9%

0.04%

0.03%

5 413.1

5 219.2

193.9

3.7%

47.3%

46.8%

242.2

254.2

-12.0

-4.7%

2.1%

2.3%

3 904.5

3 853.9

50.6

1.3%

34.1%

34.6%

40.0

31.9

8.1

25.4%

0.3%

0.3%

558.3

561.4

-3.1

-0.6%

4.9%

5.0%

3 131.1

3 107.6

23.5

0.8%

27.3%

27.9%

175.1

153.0

22.1

14.4%

1.5%

1.4%

11 455.9

11 150.4

305.5

2.7%

100.0%

100.0%

LIABILITIES

31 XII 2014

31 XII 2013 million PLN

%

2014

2013

13.2%

12.9%

1 507.0

1 439.5

67.5

4.7%

Share capital

774.1

774.1

0.0%

6.8% 6.9%

Reserve capital

502.7

399.1

103.6

26.0%

4.4%

3.6%

2.2

-1.0

3.2

320.0%

0.02%

-0.01%

Other reserve capital

180.4

166.4

14.0

8.4%

1.6%

1.5%

Profit (loss) from previous years

-16.7

65.6

-82.3

-125.5%

-0.1%

0.6%

Net profit (loss) in business year

77.4

44.0

33.4

75.9%

0.7%

0.4%

Deductions from net profit in business year

-13.1

-8.7

-4.4

-50.6%

-0.1%

-0.1%

Minority capital

115.0

101.9

13.1

12.9%

1.0%

0.9%

9 833.9

9 609.0

224.9

2.3%

85.8%

86.2%

Reserves for obligations

609.8

771.6

-161.8

-21.0%

5.3%

6.9%

Long-term obligations

908.2

646.6

261.6

40.5%

7.9%

5.8%

Short-term obligations

7 697.6

7 547.4

150.2

2.0%

67.2%

67.7%

618.3

643.4

-25.1

-3.9%

5.4%

5.8%

11 455.9

11 150.4

305.5

2.7%

100.0%

100.0%

Own capital/funds

Evaluation update capital

Obligations and reserves for obligations

Inter-period settlements TOTAL LIABILITIES

84

structure

change 2014-2013

million PLN

Annual Report 2014

SELECTED PROFITABILITY INDICATORS

2014

2013

Gross turnover profitability indicator; gross financial results / total receipts

2.25%

1.44%

ROA - asset profitability indicator; net financial results / average annual total level of assets

0.68%

0.40%

ROE - profitability indicator of own capital (equity); net financial results / average annual own capital

5.25%

3.17%

Total assets turnover rate; sales receipts / total assets

0.53

0.57

SALES PROFITABILITY INDICATOR

2014

2013

Gross sales profitability indicator; gross financial results / sales receipts

2.34%

1.48%

Net sales profitability indicator; net financial results / sales receipts

1.28%

0.70%

ASSET PRODUCTIVITY INDICATORS

2014

2013

Fixed assets turnover rate; sales receipts / fixed assets

0.80

0.87

Current assets turnover rate; sales receipts / current assets

1.55

1.64

ASSET FINANCING INDICATORS

2014

2013

Asset coverage with own capital indicator; own capital / total assets

0.13

0.13

Fixed asset coverage with own capital indicator; own capital / fixed assets

0.20

0.20

Fixed asset coverage with constant capital indicator; (own capital + reserve capital for obligations + long-term obligations) / fixed assets

0.40

0.39

Current asset coverage with short-term capital indicator; (short-term obligations + inter-period settlements) / current assets

2.13

2.13

FINANCIAL SOLVENCY INDICATORS

2014

2013

Current financial solvency indicators (3rd level); current assets / short-term obligations

0.51

0.51

Fast financial solvency indicators (2nd level); (current assets - reserves) / short-term obligations

0.50

0.51

Instant financial solvency indicators (2nd level); short-term investments / short-term obligations

0.41

0.41

85

86

Annual Report 2014

87

86

Annual Report 2014

87

Poczta Polska S.A. ul. Rodziny Hiszpańskich 8, 00-940 Warszawa Tax ID (NIP): 525-000-73-13, National Court Register (KRS): 0000334972 Court of registration: District Court for the capital city of Warsaw Share capital: 774 140 000, fully paid-in

www.poczta-polska.pl