1. Click to edit Master subtitle style 1 Budget 2011 – 2012 FY

2. 2 Market factors

3. 3 Economic factors - CPI Forecast : Reserve Bank

4. 4 Economic factors - PPI Source : Standard Bank

5. 5 Economic factors – Prime rate Source : Standard Bank

6. 6 Economic factors – Prime rate Source : Reserve Bank

7. 7 Economic factors – GDP Source : Standard Bank

8. 8 Economic factors – Fuel Price

9. Mass broadband adoption to drive a decline G F C G F C De-coupling due to internet substitution Growth traditionally matched GDP Digital substitution causing decline in letters GDP and mail volume index (1993 = 100) Disruptive scenario-6.0% Volume declines 2010–2020 CAGR Int'l comparison scenario-2.0% Midrange scenario-3.5% Forecast GDP Forecast mail volumes Real GDP Source: Australia Post letter volume data; ABS GDP data; Economist Intelligence Unit international GDP data; BCG analysis

10. 1010 Mail volumes vs GDP Source Royal Mail & Pitney Bowes

11. 1111 SA Mail volumes (’000)

12. 1212 Year end estimate

13. 1313

14. 1414 Profit trend

15. 1515 Operating profit trend

16. 1616 Net profit trend

17. 1717 Profit margin

18. 1818 Revenue

19. 1919 19 Revenue

20. 2020 20 Revenue (R’000)

21. 2121 21 Mail revenue (R’000)  CPI forecast 2011 – 4.6%.  GDP forecast 2011 – 3.7%.  Tariff increase approved @ 4.5%, however effective increase for standard 4,2%.  Mail revenue increase - 3.8 %.

22. 2222 22 Mail revenue

23. 2323 23 Logistics revenue (R’000)  CPI forecast 2011 – 4.6%.  GDP forecast 2011 – 3.7%.  Market growth is 3 times that of GDP.  Logistics revenue increase - 8 %.

24. 2424 24 Financial Services revenue (R’000 )

25. 2525 25 Postbank non interest revenue (R’000)

26. 2626 26 Interest income (R’000)

27. 2727 27 Interest income (R’000)

28. 2828 Expenses

29. 2929 29 Expenses analysis

30. 3030 30 Expenses (R’000)

31. 3131 31 Staff costs  Staff costs  Staff costs as a percentage of expenses 51%.  Staff costs as percentage of revenue 49%.  Staff increases above inflation not supported by productivity and revenue increase cannot be sustained.  CPI forecast for 2011 is 4.6%.  SAPO can only afford 5% and any higher increase will have to be supported by revenue increase and productivity increase.

32. 3232 32 Staff costs 2011/12

33. 3333 33 Transport costs  Transport costs  Transport expenses as a percentage of expenses is 11% and as percentage of revenue is 10%.  SSC and National line haul integration synergies.  Budget – 5% increase.

34. 3434 34 Property Expenses  Property Expenses  Accommodation costs as a percentage of expenses will increase by 1% to 10% and as percentage of revenue will be 10%.  Electricity costs will increase by 25% as a result of Eskom annual tariff increase.  New rental properties.  Budget – 13% increase.

35. 3535 35 PRMA

36. 3636 Capex & subsidy

37. 3737 Subsidy MTEF allocations  Subsidy allocation  2010/11 FY – R306,077 million,  2011/12 FY – R180,442 million ENE 2011,  2012/13 FY – R51,964 million ENE 2011,  2013/14 FY – R54,822 million ENE 2011.  Subsidy allocation required to fund USO costs  2010/11 FY – R306,077 million,  2011/12 FY – R354 million,  2012/13 FY – R372 million,  2013/14 FY – R392 million.

38. 3838 Capex investment

39. 3939 Capex investment

40. 4040 Funding

41. 4141 Budget 2011/12

42. 4242 SA Post Office Group Budget 2011/12

43. 4343 SA Post Office excl subsidiaries Budget 2011/12

44. 4444 Logistics Budget 2011/12

45. 4545 Budget 2011/12 – Business units

46. 4646 Balance sheet 2011/12

47. 4747 5 Year Budget 2012 -2016

48. 4848 SA Post Office Group

49. 4949 SA Post Office Group

50. 5050 SA Post Office Group

51. 5151 Post Office

52. 5252 Post Office

53. 5353 Post Office

54. 5454 Logistics

55. 5555 Logistics

56. 5656 Logistics

57. 5757 Postbank

58. 5858 Financial ratios

59. 5959 Financial ratios (R’000)

60. 6060 Financial ratios

61. 6161 Financial ratios

62. 6262 Financial ratios

63. 6363 Financial ratios

64. 6464 Financial ratios

65. 6565 Financial ratios ( R’ millions)

66. Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level  Ninth Outline LevelClick to edit Master text styles  Second level  Third level  Fourth level » Fifth level 6666 End of presentation