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2019-australia-post-annual-report.pdf Annual Report 2019 Contents Performance highlights 1 Who we are 2 About this report 3 Values 4 Chairman’s message 6 Strategic direction 7 Group Chief Executive Officer and Managing Director’s message 8 Corporate responsibility 10 Value creation 12 Our business performance 14 Our people 20 Our customers and communities 30 Our network 38 Our innovation and expertise 42 Our environment 48 Addressing our key risks 54 Materiality assessment 2019 57 Our Board 58 Corporate governance statement 61 Our leadership team 62 Remuneration report 64 Financial and statutory reports 84 Our full Corporate Governance Statement and Corporate Responsibility Index, including GRI Content Index, are available online at: auspost.com.au/about-us/news-media/publications Australia Post acknowledges the Traditional Custodians of the land on which we operate, live and gather as employees, and recognises their continuing connection to land, water and community. We pay respect to Elders past, present and emerging. Performance highlights Our business performance Revenue of $6.99 billion Profit before tax of $41.1 million A record peak period, delivering 40 million parcels in December Acquired full ownership of Australia Post Global (APG) Strong domestic parcel growth, with revenue up 9.2 per cent Business efficiency savings of over $250 million Our people Launched our refreshed purpose, values and code of conduct, Our Ethics Negotiated a new Licensed Post Office (LPO) Payment Scheme Employee engagement of 68 per cent Launched a new incident management reporting tool, OneSafe Extended our wellbeing programs Updated and launched our Alcohol and Other Drugs policy Our customers and communities Gained support of 74 financial institutions for landmark new Bank@Post agreement Record high net promoter score (NPS) of 20.5 316 million digital customer visits and 230 million retail customer visits $16.4 million contributed to the community programs Developed new retail and digital channels to China Our network $423.9 million capital investment Express Post next day delivery network expanded to 500 additional postcodes Boosted processing capacity with new automation in Melbourne, Sydney and Brisbane Began construction of our largest ever facility in Redbank, Queensland Launched a new commercial international delivery solution to New Zealand Began the roll out of 30,000 NextGen scanners to our network Our innovation and expertise Highest rated postal app in the world Launched new Police Check and Workforce Verification services POST+ mobile system deployed to improve in-store customer service Trialled a new domestic letter with tracking product Started deploying electric delivery vehicles to provide our posties with increased capacity for parcels and mail and improve safety A u s tra lia P o s t A n n u a l R e p o rt 2 0 19 P E R F O R M A N C E H IG H L IG H T S 1 Our environment Rollout of LED lighting program, eliminating 11,000 tonnes of carbon Launched our first compostable packaging Incorporated sustainable energy efficiency initiatives in the design of new facilities Achieved a score of 90.7 per cent, equivalent to a gold status, in the annual emissions management survey conducted by the International Post Corporation Reduced landfill through e-waste and fabric recycling programs Performance against targets Performance indicator Standard/Target Performance Profit before tax $25.0 million $41.1 million Shareholder return on equity 0.7% 1.7% Ordinary dividend declared for 2018/19 $7.983 million $25.335 million Ordinary dividend paid in 2018/19 $41.811 million $42.205 million Street posting boxes 10,000 15,037 On-time letter delivery 94.0% 98.9% Retail outlets (total) 4,000 4,343 Delivery frequency per delivery point at least 5 days per week 98.0% 98.8% no less than 2 days per week 99.7% 99.9% Who we are Australia Post has been at the heart of Australian communities for more than 200 years, connecting them to each other and the world. As Australia’s leading logistics, postal and integrated services business, we support our customers to grow and communities to thrive, helping to unlock opportunities for all Australians. Our objective is to create products that people value and trust, and to always deliver great service and value to our customers and the community. As a Government Business Enterprise (GBE) operating under the Australian Postal Corporation Act 1989 (APC Act), we are a completely self-funding business with both commercial and community service obligations. We make the best use of our assets and resources in order to earn profits that can be reinvested in our business for the benefit of the Australian community. Under our community service obligations (CSO), as set out in section 27 of the APC Act, we are required to provide an accessible and reliable letters service, at a uniform price, for all Australians, wherever they live. But we deliver much, much more than just our community service obligations. Over recent years, we have been transforming our business and investing in our people and infrastructure to meet the ever-changing expectations of our customers. As a result, Australia Post has become an important enabler for the growth of online shopping in Australia. Today, we handle over 80 per cent of all items that need to be delivered from businesses to consumers. Our post offices are increasingly the teller of the nation – a vital shopfront in every community, where Australians can transact with hundreds of other organisations, including banks, business and government agencies. These services also help to create more inclusive, vibrant communities where everyone can access a world of opportunity. Our activities contribute around $6 billion annually to Australia’s economy. Each year, we make a direct contribution of over $3 billion to national GDP through our operations; and the indirect economic impacts that flow from our activities contribute almost as much again. We have a total workforce of approximately 80,000 people, made up of 36,000 employees and an extended workforce of contractors, licensees and sub-contractors. We continue to place the safety of our people as our highest priority because we believe everyone should feel safe and well in the course of their day. We are committed to enhancing our reputation, and performance, as a responsible business and we are actively pursuing our goal of reducing our environmental impacts. Nagambie Licensees Andrew and Alison Biggs. We belong to 25.5 million Australians. 2 About this report Our annual report provides an overview of our business activities and our financial, environmental and social performance for the 2018/19 financial year in a single, integrated report. The report is prepared in accordance with legislative requirements, the Integrated Reporting
framework, the Global Reporting Initiative Standards (GRI) Core option and the 10 principles set out in the UN Global Compact. Our approach to value creation, governance, performance and future outlook are reported against the six capitals of the framework – financial, human, social, manufactured, intellectual and natural capitals. The report includes a detailed Remuneration Report, explaining our approach to executive and director remuneration. It shows the key components of remuneration and bonuses of our Board members, Group Chief Executive Officer and Managing Director, and senior executives. The Diversity and Inclusion section demonstrates how we are developing and implementing our Equal Employment Opportunity program, meeting the requirements of the Equal Employment Opportunity (Commonwealth Authorities) Act 1987. The disclosures in this report are aligned with the main principles outlined in the Task Force on Climate-related Financial Disclosures (TCFD). Further details can be found on our CDP submission via our website. This report is approved by the Australia Post Board and presented to Australia Post’s Shareholder Ministers in accordance with section 46 of the Public Governance, Performance and Accountability Act 2013. Unless otherwise stated, the information in this report refers to the entire Australia Post Group for the 2018/19 reporting period. Any restatements of information (due to changes in cost allocations or to allow like-for-like comparisons) are clearly noted and explained throughout this report. There were no significant changes in the boundary or scope of this report in 2018/19. Identifying material issues Each year, we undertake a materiality review to identify those topics that have a direct or indirect impact on Australia Post’s ability to create, sustain or erode economic, environmental and social value for the enterprise, our stakeholders and society at large. We use these symbols throughout the report to signal content relating to the six capitals of the Integrated Reporting Framework. Financial capital Our business performance Human capital Our people Social capital Our customers and communities Manufactured capital Our network Intellectual capital Our innovation and expertise Natural capital Our environment A u s tra lia P o s t A n n u a l R e p o rt 2 0 19 W H O W E A R E A N D A B O U T T H IS R E P O R T 3 The top 10 material issues nominated by our internal and external stakeholders for 2019 were: 1. Employee safety, health and wellbeing 2. Viable parcel business 3. Fair labour practices 4. Operating profitably 5. Customer experience 6. Workforce engagement 7. Corporate governance 8. Changing competitive landscape 9. Transparency and disclosure 10. Post Office transformation More information about the materiality index is included on page 57. Corporate Governance Statement and Corporate Responsibility Index This report and supporting documentation, including the full Corporate Governance Statement and Corporate Responsibility Index, can be found on online at: auspost.com.au/about-us/news-media/publications Our Corporate Responsibility Index comprises a summary of how we are addressing the UN Global Compact (UNGC) and the Sustainable Development Goals (SDGs), our GRI Content Index, our Independent Limited Assurance Statement and London Benchmarking Group verification statement. Values During 2018/19, we launched our refreshed purpose and values. Our purpose is to connect people with each other and the world. We unlock opportunities for everyone. Our values underpin everything we do – the services we deliver, the products we provide and, importantly, how we behave and communicate with each other and our customers. Trust Do the right thing Communities rely on us. We have the courage to speak up, be honest and take responsibility for our actions.