yesterday

today annual report NORWAY POST 2002

tomorrow Contents

CEO report ...... 4-7 Consumer Division ...... 26-27

Business concept, vision and goals ...... 7 ErgoGroup ...... 28-29

Organisation ...... 8-9 Distribution Network Division ...... 30-31

Board of Directors’ report ...... 10-17 Market overview ...... 32-35

Key figures for the Group ...... 18 Working for the community ...... 36-37

Income statement ...... 19 Environmental report ...... 38-39

Balance sheet ...... 20 Notes to the accounts ...... 40-56

Cash flow statement ...... 21 Auditor’s report ...... 57

Communication Division ...... 22-23 Highlights ...... 58-59

Logistics Division ...... 24-25

contentsNORWAY POST ANNUAL REPORT - PAGE 3 CEO report

Long-term value creation is Norway Post’s key challenge in a rapidly changing and highly competitive European postal market that is being increasingly affected by globalisation, technology and liberalisation. Sustainable value creation Creating long-term value for its owner, the of the logistics and communications market, Norwegian state, is Norway Post’s number one the replacement of traditional postal services priority. In addition to this the company must by electronic products and services, and the meet the social objective stipulated in its licen- liberalisation of the European postal market. ce. These three key drivers will generate strong Other main strategy elements are: competitive pressures and a rapidly changing • Norway Post will be a logistics and commu- business environment in which companies nications enterprise with a rigid structure and content will strug- • The company will be streamlined to increase gle, while enterprises that are successful in its competitiveness adapting their organisations, services and • The quality of the company’s services will be products will see new opportunities. improved • New sources of income will be identified, The EU has decided that the postal market particularly at the interface between physical should be further liberated from 2006, with and electronic services. full liberalisation from 2009. Norway Post In 2002, some aspects of the strategy were believes the process will be faster in Norway, further elaborated: and the company’s own objective is to be • Norway Post aims to streamline its organisa- ready for full competition from 2007. tion to ensure cost-efficient and competitive Some 85 per cent of Norway Post’s revenues operations. come from the corporate market. The compa- «Our goal is to be ready • Norway Post’s IT initiatives through ny’s financial success, therefore, depends on its ErgoGroup are important because they allow performance in this market segment. Norway for full competition integration of electronic services with physical Post’s reputation, however, is largely formed services, in order to respond to the increasing by the private market’s opinion of its services. from 2007» demand in this field. This paradox obviously influences Norway • Norway Post aims to become a market leader Post’s marketing, which is largely directed in its core business in Norway. The company towards the private market, but it also affects will also seek to assume leading positions in the development of the company’s products niche activities in other Nordic countries, and services, which are directed towards the while its engagement in activities outside the corporate market. Nordic region will be through alliances. Naturally, the various elements of Norway The three main factors affecting the deve- Post’s strategy are met with different lopment of Norway Post are the globalisation degrees of attention when implemented.

NORWAY POST ANNUAL REPORT - PAGE 5 CEO report

Norway Post's vision The world’s most future-oriented postal enterprise The vision expresses Norway Post´s long term ambition. Our vision represents a picture of how we want Norway Post to be perceived. 1998, and 34.8 per cent of its shares are now The vision must create a common understanding of Norway Post’s held by the Dutch state. Deutsche Post was choice of direction, at the same time providing an ideal for all of us listed in 2000, and the German state now who work with Norway Post and particularly something to strive for. «World» expresses the idea that we shall be a world leader in our owns 68 per cent of the shares in this compa- sector. No other postal company should be better in its market than ny.In the future, the number of listed compa- Norway Post is in Norway. We shall draw inspiration from the best nies will clearly increase, while government performers in our industry, regardless of where in the world they are ownership in European postal companies will active. decline. The interpretation of «most» is that we shall be best. We shall be the ones winning profitable competitions in the market frequently. «Future-oriented» means that we want to be at the front edge of In July 2002, Norway Post became a limi- development at all times. We offer solutions adapted to ted company, but is not listed on the stock present and future requirements, where the customer’s needs are exchange. The Norwegian Ministry of central. We operate in a dynamic industry and are experiencing a market that is undergoing rapid development. The vision underlines Transport and Communications commissions the fact that change and development will be ongoing. external analysts to carry out regular valuati- The concept of a «postal company» is not static. We ourselves decide ons of the company. In 2000, its estimated what is to be incorporated into the concept «post» in the future. At value was NOK 4.8 billion, compared with the same time, we shall build on our history and the trust we have NOK 6.3 billion in 2002 and NOK 5.5 billion gained in the market. Norway Post is a concept charged with positive values. We must make good use of this. «Increased accessibility is an important trend. in 2003. In other words, the value of Norway Post increased by 13 per cent from 2000 to As a supplier, Norway Post must take the 2003, during which period the main index on the Oslo Stock Exchange fell by 47 per cent. In Business concept consequences of this» Norway Post develops and delivers integrated, value-adding 2002, the value of Norway Post decreased by communications and logistics solutions –through physical and 13 per cent, compared with a drop in the electronic networks to domestic and international customers. The change from company-operated in Shops will grow and the opening hours of stock exchange index of 30 per cent. Thus the Norway Post shall develop holistic, value-adding communications and post offices to a combination of compa- company-operated outlets will be adapted to development in the value of Norway Post logistics solutions. This means that we not only transport items from ny-operated outlets and Post in Shops is the the demand for increased accessibility to must be said to be relatively satisfactory com- Ato B, but also offer total value adding solutions based on the custo- mers’ needs. event that has attracted most attention. Norway Post’s products and services. pared with the development of other compa- We develop solutions, which are supplied through physical and elec- The company now has a sales network nies. Norway Post’s management and employ- tronic networks. This means that we shall continue to transport consisting of 1146 Post in Shops and 304 Norway Post is continuously exploring ees will do their utmost to ensure that this physical consignments, but will also offer electronic services, such as company-operated outlets/Post Offices. The new areas of business, which has resulted in a will also be the case in the future. payment services, secure ID and secure e-mail. These can be supplied by our own production system and through alliance partners. experience to date has been positive, with slight increase in the number of employees in Our network serves both private individuals and companies. The main improved customer satisfaction. Especially its subsidiaries and a marked growth in turn- focus is still on customers in Norway, but the network offered to Post in Shop scores high on accessibility and over per employee both in the parent compa- our customers must cover the whole world. opening hours. No doubt, accessibility is ny and in the Norway Post Group. becoming increasingly important in today’s One of the new opportunities for growth Kaare Frydenberg Norway Post aims to society, and being a products and services resulting from the liberalisation of the postal Chief Executive Officer Principal goals increase the integration of provider, Norway Post must ensure high market in Europe is the acquisition of Using our business concept, vision, values and future challenges as a basis, Norway Post has defined the following principal goals for its traditional postal services accessibility by focusing on technology, CityMail in Sweden. The company distributes extended opening hours and flexible customer addressed letters in major Swedish towns and business operations: with electronic solutions. «The development of the agreements. is active in a niche that has all the right condi- Satisfied customers Today, IT represents 12 per tions for profitability. The acquisition also value of Norway Post must These will be measured through the development of customer satis- Another element of Norway Post’s on- means that Norway Post will be able to offer faction, which over time will reflect our customers’ overall perception cent of the group’s turnover. going restructuring process that has attracted high-quality services to customers operating of Norway Post. In a few years, more than half be said to be relatively

omorrow considerable attention, is the substantial work- in both the Swedish and Norwegian markets. Strong market position

t of it will come from IT and force reductions implemented over the last satisfactory compared Our market position will be measured as market share, both in exis- years. The cut from 25,000 to 19,000 full time The restructuring of Norway Post reduced ting and new areas. We must be leaders in Norway and in niche mar- electronic services. equivalent positions from 1999 until the end costs by NOK 2 billion from 2000 to 2002. A with the development of kets in the Nordic region. We must enter into international alliances. of 2002 is one of the biggest reductions that negative result before tax of NOK 106 million other companies» Attractive workplaces have been made in Norwegian business and for 2002 , however, reflects plummeting letter This will be measured by the development of workplace attracti- industry. Decreasing volumes of letters, new volumes as well as pay settlements in Norway veness, where employee satisfaction is a central factor. technology and increased pressures on effici- in recent years that have not been in accordan- ency are the drivers behind the reduction. ce with the country’s real economy. Competitive value creation Further workforce reductions will still be This will be measured through the development of Norway Post’s sha- reholder value. The owners must be offered better value creation by necessary, but not on the same scale. The Two European postal companies have investing in our company than through alternative investments. number of Post Offices, however, will not been listed on the stock exchange in recent decline. On the contrary, the number of Post years. The Dutch TPG company was listed in

PAGE 6 – NORWAY POST ANNUAL REPORT Organisation

CHIEF EXECUTIVE OFFICER Kaare Frydenberg

CORPORATE CORPORATE INFORMATION STAFF Senior Vice President Chief Financial Officer Elisabeth H. Gjølme Klaus-Anders Nysteen

INTERNATIONAL ALLIANCES Senior Vice President Bernt Reitan Jenssen

LOGISTICS COMMUNICATION ERGOGROUP AS DISTRIBUTION CONSUMER Senior Vice President Senior Vice President Managing Director NETWORK Senior Vice President Arne Bjørndahl Lars Tendal Per Andersen Senior Vice President Erik Johannessen Aniela Gjøs

Market-oriented group structure Norway Post has organised the group into five market-oriented divisions and three corporate staffs. The structure will help to strengthen Norway Post's value creation.

The establishment of Norway Post as a The five divisions are responsible for implement the group’s strategies as effectively limited company on 1 July 2002 did not in- developing and supplying competitive as possible. volve any changes in the company’s structure, solutions to meet existing and new customer but helped establishing the company external needs, both separately and jointly. In 2002, Corporate Staff Development and conditions on level with competitors and the Corporate Staff Finance merged to become business community in general. Norway Post’s The group structure is an aid to achieving Corporate Staff. The change contributes organisation now corresponds to that of goals and realising strategies, which helps to towards increased distribution skills and better public limited companies that are fully owned strengthen value creation in the group. The utilisation of resources in the staff functions. by the government. heads of divisions and staffs are part of the In addition, a separate staff has been formed, group management, which is the group’s focusing specially on international relations. Norway Post is an organisation that highest management team. The fact that the prioritizes most of its resources externally to group management is operative helps the develop and satisfy the market and customers’ focus on overall market solutions. The group needs. The group consists of five divisions, structure is not static and both the structure which are focused on the market and results, and boundaries between the different units and three development-oriented staffs. must be constantly evaluated in order to

PAGE 8 – NORWAY POST ANNUAL REPORT Board of Directors’ Report

Towards a future-oriented postal company

Norway Post’s vision, business concept and strategies were developed and adopted in 2000. In 2002 the Board of Directors decided that work will continue on the same lines in the next few years. Norway Post’s business concept is to be a logistics and communications company.

The main strategy for strengthening the A-post (first class/priority) was 86.7%, which company in an increasingly competitive was an improvement on the 86.3% of the pre- market is to make all parts of the business vious year and 1.7 percentage points above the more efficient, while improving service and licence requirement. This means the quality quality. In its core business, Norway Post will has never been better. A high level of regulari- «By restructuring be the market leader in Norway. In the Nordic ty in A-post deliveries is essential to achieve region, Norway Post is concentrating on satisfied customers and a good reputation. Norway Post's sales taking a leading position in niche sectors, • The prices of addressed mail remains unc- while international ventures will take place hanged for the second year running. Market network we now have through alliances. trends do not allow for postage increases on Norway Post became a state-owned limited these products. In 2002, prices for new 101 more sales company on 1 July 2002. It is important that services, such as storing and temporary Norway Post has the same competitive redirection of post, was introduced. In 2003, outlets than in the conditions as its competitors. To establish charging was introduced for «redirecting post previous year» Norway Post as a limited company is a step in to permanent new addresses». In the future, the right direction. Norway Post also wants to continue to intro- duce value-adding products and services The restructuring of the company, in alongside its traditional products. relation to the competitive conditions given by • In 2002, Norway Post made a breakthrough the owner, helps Norway Post to fulfil its in secure electronic post with eCourier, which vision of becoming «the world’s most future- important target groups has started using. oriented postal enterprise». Both individually Norway Post's eInvoice for companies was and as a whole, all the main activities in 2002 launched and was well received in the market. moved the group in this direction. The solution is based on secure electronic sig- nature with secure online payment. In Opp- The following points illustrate important dal, Norway Post initiated a pilot project with development trends for Norway Post: its Smart Card, which provides secure electro- • The restructuring of Norway Post’s sales net- nic reporting to the local authority. work in 2002 resulted in 101 more sales out- • In 2002 revenues from international activiti- lets than the previous year. At the end of es increased by NOK 372 million or 51% and 2002, the sales network comprised 1,146 Post represents 7.2% of Norway Post's total opera- in Shops, ting revenues. Norway Post pursues a niche 24 Business Centres and 304 Post Shops/Post policy in the Nordic region, with its largest Offices. Service and accessibility are critical investments being CityMail Sweden, Transport success factors for Norway Post. Systems International (TSI) and Pan • In 2002 the delivery quality for overnight Nordic Logistics (PNL).

PAGE 10 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 11 Board of Directors’ Report

«Norway Post wants to introduce value-adding products and services alongside its traditional products»

In order to ensure that Norway Post At the request of the Ministry of Transport develops into a competitive and profitable and Communications, DnB Markets carried company, all parts of the operations must be out a valuation of the group in the first quar- streamlined. Major restructuring projects were ter of 2003. This placed a total equity value of carried out in 2002 and this work has produ- NOK 5.5 billion on the group. The correspon- ced considerable effects: ding valuation in 2000 put the value of • Restructuring and streamlining measures Norway Post at NOK 4.8 billion and in 2002 produced annual cost reductions of NOK NOK 6.3 billion. This means that Norway 1,022 million in 2002. Total cost reductions Post's value has increased by 13% between for 2001 and 2002 amounted to NOK 2.0 billi- 2000 and 2003, while the main index on the on. Restructuring is continuing in 2003 and Oslo Stock Exchange fell by 47% in the same will give lasting cost level reductions compa- period. Taking the period 2002-2003 on its rable with previous years. The decline in own, Norway Post's value fell by 13%, with advertising mail and marketing communicati- growth, large disability pension withdrawals addressed mail continues and emphasize the index falling 30% in the same period. The on and also the acquisition of CityMail. The and various scheme changes in recent years all need for cost reductions. Board of Directors is satisfied that Norway sales network in the Consumer division has contributed towards a significant increase in • As the efficiency improvement processes Post's value development has been more experienced a reduction in income of 4%, net pension commitments. The increase is not continue, government expenditure on purcha- positive than market development during with the biggest decline being related to bank included in the balance sheet, but is listed as a OPERATING REVENUES sing unprofitable postal services has almost these years. transactions and sale of Norway Post Bank’s non-balance-sheet commitment. At year-end, REVENUE DEVELOPMENT AND EXPENSES halved over five years, from NOK 570 million services. Parcels and logistics operations made the total non-balance-sheet commitments for NOK mill NOK mill to 305 million. Finance and profit trends: In 2002, a positive contribution, with an revenues the parent company amounted to NOK 1,183 10 000 16000 • Restructuring in 2002 resulted in workforce Norway Post had a operating revenues totalled growth of 11%. ErgoGroup has a growth by million, cf. note 2 to the annual accounts. 14000 reductions of 1804 man labour-years in the NOK 15,166 million, an increase of 1.1% 21% and is reporting good results in a difficult Equity taking into account the non-balance- 8 000 parent company. Between 2000 and 2002, the from 2001. The parent company’s revenues market. sheet pension commitment would have been 12000 number of man-hours has been reduced by was 3.5% down on the previous year and Income from IT and Logistics represents NOK 2,862 million. 6 000 10000 6,000 or approximately 25%. represents 79.4 percent of the group’s 2002 an increasing proportion of Norway Post's In November, Parliament decided that 8000 • A new NAVO tariff agreement was negotia- revenues, compared with 83.2 percent the turnover. The IT area represented 12% of Norway Post would have to pay the calculated 4 000

6000 ted with the trade unions in 2002. This previous year. The subsidiaries’ revenues revenues in 2002, compared with 10% in 2001 underabsorption of NOK 1,475 million into replaces the government’s tariff agreement showed an increase of 11%. and logistics operations represented 23% of the Public Service Pension Fund in 2003. The 2 000 4000 and gives Norway Post considerable influence Operating result before tax amounted to income in 2002, compared with 21% the non-balance-sheet commitment is not affected 2000 in salary development in the company. NOK -106 million in 2002. Operating profit previous year. Communications products by this payment. At the same time, Parliament 0 ** 0 • Land-based heavy goods transport was put (EBIT) amounted to NOK -33 million, which accounted for 54% of income, compared with decided to invest NOK 600 million in new 2000 2001 2002 1999 2000 2001 2002 out to tender in 2002. 40% of transport is NOK 876 million lower than the previous 57% the previous year and the consumer area equity into Norway Post to compensate for the assignments is currently carried out by year when the sale of property made a large was unchanged with 9%. negative effect. Letter post Operating revenues external carriers. contribution to revenues. Provisions of NOK Parcel post Operating expenses • The move from privately owned vans to lea- 105 million for restructuring lowered the Capital: Total capital amounted to NOK Return on capital employed in the group Total postage income

sed vans for post delivery began in 2001 and group’s profit in 2002. The Board considers 9,561 million at 31 December 2002. This is an amounted to 1.7% in 2002, compared with * Incl. Postreklame Helg. 2001 volume has been estimated continued in 2002. The past financial year profit to be too weak to cover Norway Post's increase of NOK 395 million on the previous 24.6% in 2001. After adjusting for non recur- gave a total cost reduction of NOK 115 milli- need for further development. For this reason, year. ring items, the return amounted to 1.2%, on. measures to strengthen Norway Post's financi- When Norway Post was established as a compared with 11.0% the previous year. The • Posten Servicepartner AS, which provides al development have been given top priority in limited company on 1 July, the parent compa- return is not satisfactory and is the conse- Norway Post with in canteen operations, future work. ny received NOK 1,660 million in additional quence of a negative change in profitability cleaning and building services, was sold to ISS new capital. A subordinated loan of NOK 400 with an increase in capital employed. At 31 in 2002. The development has been influenced by million was converted to equity. At the same December 2002, capital employed amounted • The companies Netaxept AS and Nettlast the fall in revenues from addressed mail. The time, the company was required to take over to NOK 5,184 million, an increase of NOK Helgeland AS, which were not strategic busi- move to electronic alternatives is progressing the financing of a particular redundancy pay- 1,017 million on last year. The increase is lar- nesses in Norway Post, were sold in 2002. more quickly in Norway than in the rest of ment system, applicable until 1 January 2005. gely attributable to investments in the new It is the Board’s opinion, large-scale impro- Europe. Industries at the forefront in the Book equity in Norway Post at 31 Dec- sales network and acquisitions. vement measures are necessary to secure and transition to electronic services are banking ember 2002 amounted to NOK 4,045 million. Cash flow from operations amounted to develop Norway Post's position as the leading and finance and public administration. The The parent company’s pension costs are repor- NOK 488 million in 2002, which repre- communications and logistics company in total volume in the Communication division ted in accordance with Norwegian and inter- sents an improvement of NOK 305 Norway. increased by 1.5%, as a result of growth in national accounting practice. High wage million compared with 2001.

PAGE 12 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 13 Board of Directors’ Report

«To ensure a proper Norway Post's operations are such that the Norway Post uses moderate gender discrimi- TOTAL PRIORITY MAIL DELIVERED financial risks are relatively small. Financial nation to increase the number of female NEXT DAY IN NORWAY changeover process, instruments are used to reduce the risks in- managers and employees in male-dominated in % volved in changes in interest rates, exchange job categories. This is incorporated into 100

Norway Post is working rates and the price of energy. The Board of Norway Post's recruitment policy and tariff 95 Directors confirms that the annual accounts agreements. When taking on management on the basis that have been prepared on the going concern basis trainees and during management evaluation 90 Norway will follow and that the conditions for this are in place. and development, there is an active focus on 85 85% finding and developing female managers and 80 Allocations: In 2002, Norway Post reported management candidates. 75 the EU's schedule for net profit for the year of NOK -43 million. Norway Post attaches great importance to liberalisation» The Board proposes to the annual general skills development. A large-scale management 70 assembly that the loss for the year be transfer- development programme was implemented in 65 red to other equity. The company had NOK 2002. During 2003, 96 managers will have 60 -35 million in negative other equity at year- undergone Norway Post’s senior management 1999 2000 2001 2002 end, which means it has no unrestricted equi- programme and 126 managers its middle Quality, rolling 12 months ty.In accordance with the Public Limited management programme. (licence requirement 85%) Companies Act, the Board therefore proposes that no dividend be paid for 2002. Atotal of 75 nationalities are represented VOLUME DEVELOPMENT, among Norway Post's employees. Our zero INCOME DISTRIBUTION, GROUP PARCEL POST Organisation and environment: At the end tolerance approach to racism has continued in volume in million of 2002, there were 23,509 full-time jobs in all parts of operations and the employees have 30 Norway Post, 19,407 of which were in the wholeheartedly supported this. with the National Office for Social Insurance. and conditions for members in the scheme at 29 parent company. The major restructuring The goals of the agreement are to reduce sick- the current level. The company has pledged 28 resulted in 1,804 full-time jobs being cut in The Board would like to thank employees ness absence by 20% over a three-year period, not to change the affiliation to the Public 27 the parent company in 2002, while the subsi- for their active contributions and shared increase the average retirement age and inclu- Service Pension before 1 March 2004, unless 26 diaries’ workforce increased by 807 full-time responsibility in what has been a demanding de more people with disabilities in working otherwise agreed by the parties. 25 jobs. process of change. life. Concrete IA action plans for all parts of 24 50% of the parent company’s total number There is still concern over the high inciden- the organization were formulated in autumn. The Board: At the Norway Post Annual 23 of permanent employees at the end of 2002 ce of sick leave. Total sick leave in 2002 was General Assembly in 2002, Arvid Moss was 22 were women. 41% of full-time employees and 11.3%, against 11.2% the previous year. The last three years have seen a marked elected as the new Chairman of the Board, 65% of part-time employees were women. Ongoing measures to reduce absence are being decline in the number of postal robberies. succeeding Magnus Stangeland. In addition, 21 A Priority (24.4%) Norway Post has placed emphasis on systema- Terje Christoffersen was elected as a new 20 40% of the Board members are women. The applied, using the Post model and focusing on B Economy (12.2%) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 executive management team consists of nine health-promoting work throughout the tic development of effective security measures. Board member after Bjørn Kaldhol’s resignati- Newspapers/magazines (4.2%) Total parcel post people, two of whom are women, i.e. 22%. organisation. In June, Norway Post and the In 2002, there were six postal robberies in on from the Board. Other communication (12.8%) 29% of the 412 middle managers and 33% of trade unions entered into an agreement to Norway,compared with eight in 2001, 20 in In 2002, a new Board instruction was adop- Norgespakken (1,2%) the 1,230 junior managers are women. achieve a more inclusive working life (IA) 2000 and 32 in 1999. This represents better ted, which specifies the Board’s work, authori- Other logistics products (14.1%) development for Norway Post than other cri- ty and work processes. The Board considers it ErgoGroup (11,7%) minal trends in society. When robberies do important for the company to have expedient Postbanken (5,5%) take place, a main priority is to follow up and and efficient management and control systems Government purchases (2.5%) support affected employees. that satisfactorily deal with administration of Other (1.8%) Operational related injuries leading to sick the group for the owner and other interested Other subsidiaries (9.6%) VOLUME COMPARISON TOTAL leave totalled 297 in 2002. The corresponding parties. Continuous reporting and following VOLUME AGAINST A AND B POST figure in 2001 was 357 and in 2000 362. The up of important investments and measures is volume in million PROPORTION OF NORWAY POST’S injury frequency rate, i.e. the number of inju- a main priority. Any possible conflicts of inte- 2700 INCOME FROM RESERVED AREA res involving absence per million working rest in the handling and resolutions of matters 2550 in % 2400 hours, was 8.7 in 2002, against 9.8 in 2001 and are evaluated by the Board for the individual 100 2250 9.2 in 2000. board member and the Chief Executive 2100 Officer. There were no such matters in 2002. 1950 80 1800 During the 2002 wage settlements, a new Company information is made available on 1650 tariff agreement was negotiated with NAVO, Norway Post’s web site. The Board will for- 60 1500 which replaces the state tariff agreement. The mally review its work annually and, if 1350 agreement paves the way for a simplification required, the content of the board instruction. 1200 40 of the payroll system in Norway Post and the 34,0 33,3 1050 29,9 900 parties formed a committee to draw up a new The external environment: Norway Post 19,8 20 750 payroll system for Norway Post. The parties influences the external environment through 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 also selected a committee to formulate future its transport operations, management of 0 Total letter post pension schemes and affiliation. In this work buildings, waste and recycling and 2000 2001 2002 2003 A and B post the focus is on securing competitive returns environmentally sound purchasing. estimated

PAGE 14 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 15 Board of Directors’ Report

«With ErgoGroup as an integrated part of Norway Post's business, the group can develop and offer total solutions»

STAFF DEVELOPMENT The most serious impact on the environment management tool will be developed and comes from transport and the management of implemented in 2003. 35000 buildings. Improvement processes to reduce the impact on the external environment are Prospects: Liberalisation in the European 28000 constantly being worked on, particularly with post market continues. The Government has regard to energy consumption and emissions. decided to reduce Norway Post’s reserved area 21000 Energy requirements in Norway Post's buil- for addressed letters from 350 to 100 grams dings are mainly covered by electricity and from 1 July 2003. This means that Norway 14000 fuel oil. In 2001, an energy efficiency project Post's reserved area is down to less than 20% was initiated, with the aim of reducing energy of total revenues. To ensure a proper change- 7000 consumption by 20% in the period 2002-2005 over process, Norway Post is working on the and increasing the use of renewable sources of basis that Norway will follow the EU‘s schedu- 0 energy. In 2002, energy consumption in the ling for liberalisation, which in the long term 1999 2000 2001 2002 buildings owned by Norway Post fell by 4.5%, will allow free competition from 2006 when

Number of employees while there was an increase in the percentage the reserved area is reduced to letters under 50 Number of man-labour/ of remote heating, which amounted to 13% of grams. full-time jobs total energy consumption. The communications market will be subject The pilot project «Drive Right» was launc- to continuous change in the coming years, hed in Trondheim and Bergen with drivers’ which will place high demands on Norway NET PROFIT FOR THE YEAR Norway Post's Board of Directors, back row, left to right: Asbjørn Birkeland, Erik Døvle and Hans Fredrik Danielsen. Middle, left to right: Ingrid Svensen (deputy for Terje Christoffersen), Gerd Øiahals (deputy for Ingeborg Anne Sætre) and Inger Marie Gulvik Holten. Front, left to right: Vice Chairman Liv Stette, Chairman Arvid Moss, NOK mill computers for fuel savings. Norway Post has Post's ability to adapt to change. With 39 electric vehicles and has taken part in a ErgoGroup as an integrated part of Norway Wenche Pedersen and Odd Christian Øverland. 600 480 joint European electric vehicle project which Post's business, the group can develop and 437 400 evaluated the effectiveness and environment offer services that meet the customers Post must improve its financial results • developing service and quality at all levels in must be balanced between efficiency improve- effects of electric vehicles in transportation. demands for total communication and logis- substantially in the future, both to increase Norway Post ment processes and skills development. 200 Norway Post is also part of Bellona’s hydrogen tics solutions, both physical and electronic. the return on capital in the company and to • developing new integrated services based on In the short term, the group’s profitability 0 car project. The logistics market tends to be influenced ensure freedom of action to implement the the group as a whole will be affected by the continuing major

-110 In 2002, Norway Post decided to introduce more by periods of economic recession. formulated strategies. • adapting and optimising the production restructuring work. At the same time, the -200 environment management, which will include Norway Post is well positioned for additional The ongoing improvement work must structure (networks, terminals etc.) and difficult market situation is expected to -400 an environmental action programme with activity in logistics solutions, physical distri- continue. utilising scale benefits continue in IT, the courier and express sector concrete goals, and electronic environmental bution and express services and the offer is The postal business is becoming increasing- and banking/finance in 2003. To ensure -600 -655 reporting. This will give an overview of being developed towards increased flexibility In the future, Norway Post will focus on: ly skills driven. In order to succeed, Norway positive, long-term development, the company -800 resource utilisation and emissions into the and customized tailoring. • implementing measures to achieve cost- Post must be able to satisfy its employees’ needs to achieve constant result improvements 1999 2000 2001 2002 external environment. The environment The Board wants to emphasise that Norway effectiveness and continuing professionalisati- needs for development and challenging assign- in the future. on in all parts of the organisation ments. The group’s restructuring programmes Net profit for the year

Oslo, 27 March 2003

Arvid Moss Liv Stette (Chairman) (Vice Chairman)

Terje Christoffersen Asbjørn Birkeland Inger Marie Gulvik Holten

Wenche Pedersen Odd Chr. Øverland Hans Fredrik Danielsen

Ingeborg Anne Sætre Erik Døvle Kaare Frydenberg (Chief Executive Officer)

PAGE 16 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 17 Annual accounts

KEY FIGURES INCOME STATEMENT Amounts in NOK mill Amounts in NOK mill

NORWAY POST GROUP NORWAY POST NORWAY POST GROUP

2002 2001 2000 2000 2001 2002 Note 2002 2001 2000 INCOME STATEMENT Operating revenues 15 166 15 008 13 659 NOK mill 12 024 12 486 12 042 Operating revenues 1 15 166 15 008 13 659 Operating profit/(loss) (EBIT) NOK mill (33) 843 (848) Operating result before tax (106) 718 (886) NOK mill 992 984 1 465 Cost of goods and services 3 193 2 578 2 029 7 416 7 326 6 906 Payroll expenses 2 8 485 8 628 8 331 PROFITABILITY AND RETURNS 499 549 461 Depreciation 7, 8 903 805 625 Calculated key figures incl. non recurring effects 2): 25 62 19 Write-downs 7, 8 22 71 26 Net operating margin 3) (0,2) 5,6 1) % 2 936 3 343 3 237 Other operating expenses 3 2 620 2 608 2 434 Net operating margin before tax 4) (0,7) 4,8 1) % 1 062 (458) Other income and expenses 4 (24) (525) 1 062 Return on capital employed 5) % 1,7 24,6 1) Return on equity 6) (3,5) 22,8 1) % (906) 680 (46) Operating profit/(loss) (EBIT) (33) 843 (848)

Calculated key figures excl. non recurring effects 2): 97 174 194 Financial income 5 114 105 104 Net operating margin 3) (0,4) 2,1 1,6 % 128 215 209 Financial expenses 5 187 230 142 Net operating margin before tax 4) (0,9) 1,3 1,3 % (937) 639 (61) Operating result before tax (106) 718 (886) Return on capital employed 5) % 1,2 11,0 8,5 (257) 178 (18) Taxes 6 4 238 (231) CAPITAL AND LIQUIDITY Cash flow from operations 488 183 843 NOK mill (680) 461 (43) Net profit/(loss) for the year (110) 480 (655) Investments NOK mill 1441 2 033 1 359 Equity ratio 7) 42,2 23,9 24,8 % Minority interests’ share of net Net debt ratio 8) 0,1 0,5 0,4 % profit/(loss) for the year (17) 17 7

PERSONNEL Transfers and allocations No. of employees at 31 December 26 886 29 563 32 365 (300) Allocated for dividend No. of man-labour years 23 509 24 506 25 684 680 (161) 43 Transferred (to)/from other equity 680 (461) 43 Total transfers and allocations 15

Adjustments made to the base figures for calculation of key figures: 1) One-off effects in 2000 relating to the allocation for restructuring and disability pensions amount to NOK 1.2 billion.

2) Calculated figures without non recurring effects take into account sale of real estate and operations in 2001 and 2002 and allocation for restructuring in 2002.

Definitions 3) Operating profit/(loss)/operating revenues 4) Operating result before tax/operating revenues 5) (Operating result before tax + financial income)/average of capital employed 6) Net profit/(loss) for the year/average equity 7) Equity/total capital 8) (Interest-bearing liabilities - liquid assets)/equity

PAGE 18 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 19 Annual accounts

BALANCE SHEET CASH FLOW STATEMENT Amounts in NOK mill Amounts in NOK mill

NORWAY POST NORWAY POST GROUP NORWAY POST NORWAY POST GROUP

2000 2001 2002 Note 2002 2001 2000 2000 2001 2002 2002 2001 2000 Assets Cash flow from operational activities 536 370 185 Intangible assets 7 1 639 1 301 944 (294) 613 370 Generated from the year’s operations *) 692 855 (142) 3 823 3 560 3 468 Tangible fixed assets 8 4 034 3 938 4 148 (4) (2) (15) Change in inventories (14) (2) (6) 674 821 951 Investments in shares 9 150 135 83 Change in interest-free current receivables, 49 38 259 Interest-free long-term receivables 10 236 60 58 (160) (572) 68 excl. group contribution 116 (713) (157) 106 721 1 184 Interest-bearing long-term receivables 11 58 168 588 (31) Change in interest-free current liabilities, excl. dividends 44 637 177 5 188 5 510 6 047 Fixed assets 6 117 5 434 5 233 964 (566) (327) Change in provisions (350) (594) 971 674 61 65 Net cash flow from operational activities 488 183 843 47 49 64 Inventories 12 65 51 50 1 610 2 182 2 086 Interest-free current receivables 13 2 526 2 721 2 002 Cash flow from investment activities 647 720 701 Cash and cash equivalents 14 853 960 823 (904) (1 186) (654) Investments in tangible fixed assets/IT development etc. (1 441) (2 033) (1 359) 2 304 2 951 2 851 Current assets 3 444 3 732 2 875 333 1 248 601 Sales of tangible fixed assets 258 1 384 342 (638) (551) (869) Changes in other fixed assets (225) 86 (419) 7 492 8 461 8 898 Total assets 9 561 9 166 8 108 (1 209) (489) (922) Net cash flow from investment activities (1 408) (563) (1 436)

Equity and liabilities Cash flow from financing activities 1 515 1 515 3 060 Share capital 3 060 1 515 1 515 80 139 Payments, new long-term loans 139 80 4 505 505 1 020 Share premium reserve 1 020 505 505 400 432 Payments, new current loans 442 416 (32) 129 (35) Other equity (94) 138 (33) 28 Payments of group contributions/dividends Minority interests 48 35 25 (226) (11) (436) Repayment of long-term loans (461) (18) (236) 1 988 2 149 4 045 Equity 15 4 034 2 193 2 012 (532) Repayment of current loans (532) (131) (300) Group contribution/dividends paid (300) (131) 1 242 702 403 Provisions 16 446 796 1 279 1 939 Additional equity payment 1 939 43 501 838 Net cash flow from financing activities 785 504 53 979 1 048 751 Interest-bearing long-term liabilities 17 846 1 133 1 119 (492) 73 (19) Total change in liquid assets (135) 124 (540) 400 832 300 Interest-bearing current liabilities 17 304 841 416

2 883 3 730 3 399 Interest-free current liabilities 18 3 931 4 203 3 282 1 139 647 720 Cash and cash equivalents at start of period 960 823 1 333 Cash and cash equivalents at acquisition of 7 492 8 461 8 898 Total equity and liabilities 9 561 9 166 8 108 subsidiaries 28 12 30

Guarantee liability/mortgages 19 647 720 701 Cash and cash equivalents at end of period 853 960 823

Oslo, 27 March 2003 *) This figure breaks down as follows: Arvid Moss Liv Stette (680) 461 (43) Net profit/(loss) for the year (110) 480 (655) (Chairman) (Vice Chairman) 524 634 489 + Depreciation and write-downs 934 928 651 (138) (482) (76) - Gain on disposal of fixed assets (132) (553) (138) Terje Christoffersen Asbjørn Birkeland Inger Marie Gulvik Holten (294) 613 370 = Generated from the year’s operations 692 855 (142)

Depreciation and write-downs plus gain from sale of fixed assets in cash flow statement also include shares etc., in addition to assets. Wenche Pedersen Odd Chr. Øverland Hans Fredrik Danielsen

Ingeborg Anne Sætre Erik Døvle Kaare Frydenberg (Chief Executive Officer) NOTES The notes are an integral part of the annual accounts and can be found on pages 40-56.

PAGE 20 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 21 Communication Division

LARS TENDAL Offer total communication Senior Vice President, Communication Division

Norway Post offers letter post and market communication via physical and electronic channels.

EMPLOYEES solutions 2002 429 2001 403 «We shall consolidate our market position through acquisitions 2000 429 and the development of new services», says Lars Tendal, REVENUES IN NOK MILL. 2002 8 356 Senior Vice President, Communication Division. 2001 8 508 2000 8 184 New electronic communication channels, The offer is part of a larger concept, whereby

PHYSICAL POSTAL ITEMS IN MILL. increased competition and a general recession Norway Post assumes the role of trusted third 2002 2 546 both at home and internationally, were the party and simplifies the customers’ communi- 2001 2 503 main challenges for the Communication cation through hybrid solutions, such as scan- 2000 2 556 Division in 2002. ning and printing of electronic information. SUBSIDIARIES «We have seen a bigger income decline than Major customers such as Europay, Creno, The distribution company City Mail expected in A post (first class mail), which is Adviso and Scribona have entered into Sweden, which distributes mail in falling more rapidly than in the rest of Europe, eInvoice agreements. the largest towns and cities in largely due to internet use in Norway. While the electronic focus is important to Sweden, and Posten Forbruker- However, we have been pleasantly surprised by Norway Post, Lars Tendal also points out that kontakt, which distributes direct mail in the four largest cities in the growth in addressed and unaddressed physical items have clear advantages. Norway. advertisements,» says Senior Vice President, «Paper doesn’t require any computer sys- Lars Tendal. tems at the recipient’s end for it to be received, whether it’s a bill or a letter that arrives Norway Post distributes 2.5 billion letters and 25 million parcels each year. De norske Bokklubbene is The major customers now have one contact The acquisition of the Swedish distributi- through the letter box. By sending the traditi- one of Norway Post’s biggest customers. point with Norway Post. on company CityMail Sweden has given onal letter, a postcard, newspaper or samples, Norway Post a foothold in the Scandinavian products can be presented in a way that can’t explains Mr. Tendal. The customer list in- EU plans to introduce free competition for «As the market gradually «We shall satisfy cludes motor group Bertel O. Steen, which all addressed letters from 2009 will certainly market. The company delivers post to be matched by electronic media,» says Lars becomes fully exposed to our customers with 1.8 million households, mainly in the cities of Tendal. Norway Post’s sample boxes represent has transferred large parts of its physical and present big challenges for Norway Post. Stockholm, Gothenburg and Malmö, covering a new initiative for the company. Delivery of electronic communication services, package The forecasts indicate that the sharp decline competition, we shall and must new products and 40 percent of Swedish households. In 2002, samples directly to the doorstep of 20,000 exchange and IT operations to Norway Post. in addressed letter products will continue. offer total solutions that are CityMail Sweden had revenues totalling of households in Oslo was introduced before The Senior Vice President explains that the not dependent on channels and solutions» SEK 430 million. Christmas. Norway Post is keen to establish itself as Communication division will face the future «With CityMail Sweden on our side, we can «Sample boxes is an exciting service that has a key player in newspaper distribution. with strategic acquisitions and by increasing that benefit the customers offer better solutions to major Scandinavian been well received by consumers and adverti- Co-operation with the newspapers’ own the rate of innovation even more. The deve- along the entire value chain. customers. This acquisition is a niche invest- sers alike. During 2003 we shall undertake a distribution companies is vital to success. lopment of new products and solutions will omorrow

t This calls for a sales and market ment but means we have doubled our mar- number of new types of dispatches across the «By combining Norway Post's distribution take place with the customer at the centre. ket,» explains Lars Tendal. entire country,» says Lars Tendal. apparatus and the newspapers’ own distributi- «We didn’t pay enough attention to the oriented organisation with a on companies, we can deliver a solution customers’ needs when previously developing high level of expertise,» The Communication division has gained In 2002, Norway Post established a key where quality and price are favourable to new solutions. If we are to succeed with our useful experience in relation to the market accounts centre, which gives the biggest both parties,» says the Senior Vice President. future initiatives, we must always keep focus concludes the Senior Vice situation for electronic communication soluti- customers one contact point with Norway Negotiations with Adresseavisen on joint on the customer,» says Lars Tendal. President Lars Tendal. ons. Post. newspaper and post distribution have not «We have chosen to concentrate much more «Norway Post has a very broad product been productive, but discussions are ongoing In 2002 prices for temporary redirection of our attention on the business to business portfolio and can offer everything from pallets with several other newspapers. Norway Post and storing of post was introduced, and in market,» says Lars Tendal. He singles out to web design. The challenge consists in launched a new profile programme in 2003 Norway Post also charges for redirecting eInvoice as the most important innovation for making our major customers aware of this, so summer 2002. The new profile marks Norway post to new, permanent addresses in excess of business customers in 2002. eInvoice is that we can take on larger parts of their value Post's transition from a letter distributor to a one month. Norway Post’s service for electronic transfer of chain and offer a broader range of products communications and logistics company. invoices. and services through one point of contact,» As far as future prospects are concerned, the

PAGE 22 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 23 Logistics Division

mined by weight and volume. ARNE BJØRNDAHL «We are making these changes because they Senior Vice President, represent a more businesslike system. The Logistics Division price is now a better reflection of what it actually costs to transport the packages. The The Logistics division is responsible for the sale and distribution of packaging vans are filled by the volume of the packages, products, express services and general not the weight,» explains the Senior Vice goods, combined with information and President. payment solutions.

EMPLOYEES In 2002, Norway Post sold its shares in 2002 1 227 Netaxept, a company which provides on-line 2001 1 357 logistics and payment solutions. Netaxept 2000 1 595 Norway Post has 35 bicycle couriers in the supplies payment solutions to Norway Post REVENUES IN NOK MILL. biggest towns and cities. and Norway Post’s logistics solutions continue 2002 3 225 to be part of Netaxept’s solutions for distri- 2001 2 840 bution of goods. 2000 2 821 «Norway Post does not need an ownership TOTAL NUMBER OF PARCELS IN MILL. in Netaxept to achieve its goal to provide 2002 24.7 integrated logistics and payment solutions,» 2001 24.5 says Arne Bjørndahl. 2000 25.4 SUBSIDIARIES There is tough competition in transport Oslo Container Stevedor AS (OCS), and logistics. As far as the international Wajens AS, Transport Systems activities are concerned, Norway Post will International AS (TSI), KortProsess AS,Pan Nordic Logistics (PNL) AB, continue its co-operation together with 1to1 Factory AS and Nettlast AS. Post Denmark in the joint venture PNL (Pan Nordic Logistics). PNL has built up a network Many people want their goods delivered to the door, which prompted Norway Post to enter into a home delivery agre ement with IKEA in 2002. Anew service enables customers to receive an in the Nordic region through the acquisition SMS alert when their parcel has arrived. of Expressgods in Sweden and an alliance with IKEA and Vinmonopolet. The number of customs handling and clearance during the Finland Post. Further efforts are being made delivery areas has grown from 48 to 51 towns. year. This is now concentrated in three places to find an international logistics partner, in This means that Norway Post can offer eve- rather than the previous ten. order to provide customers with competitive Seamless ning home delivery to about half the popula- «By centralising customs handling and clea- logistics solutions outside the Nordic region. tion. rance to Oslo, Gardermoen and Tromsø, we «With more international players represen- «We are increasing accessibility and free- have increased the service and reduced costs,» ted in Norway, competition is getting tougher logistics dom of choice for our customers. Our goal is explains Arne Bjørndahl. all the time. The tendency is towards fewer, for everything that arrives at the doorstep of Norway Post has also worked actively to but bigger companies. We are ready for Norwegian households to be delivered by increase customs boundaries for private con- international alliances,» says Arne Bjørndahl. «Our goal is for For the Logistics division, 2002 ended with volume growth and Norway Post», says Arne Bjørndahl. The signments, making it easier for users to buy positive results. «With a good network and integrated logistics Logistics division has also extended the time goods from abroad. Norway Post wants the everything that arrives We are seeing an increasing ten- solutions, we are well equipped in the competition for new window for home delivery. In the long term it maximum value for clearance of private con- at the doorstep of will be possible for the customer to choose the signments from abroad to be raised from dency for customers to prefer customers,» says Senior Vice President Arne Bjørndahl. time and place for delivery of parcels. NOK 200 to 1,000 at least, but the Ministry of one supplier that can supply Finance appears reluctant to raise the maxi- Norwegian households several services. In the competi- Customers want integrated logistics solu- service enabling customers to receive an In 2002, the Logistics division implemen- mum value. to be delivered by tions and Norway Post is the only company in SMS alert when their parcel has arrived. The ted several cost-cutting projects, which resul- Norway Post has had EDI production, or tion for customers, this means Norway that is able to offer seamless and con- service is available to customers who use EDI- ted in improved profitability. During the electronic data interchange, since 1998. In that it is crucial that we are Norway Post» current physical transportation, information based communication with Norway Post. The year the division also identified new areas for 2002, the number of EDI packages increased capable of putting together inte-

exchange and payment solutions. In 2002, Logistics division has introduced a new pri- efficiency improvement. by 20 percent. This means that well over half omorrow

Norway Post launched several new services. cing system for general goods, which means «For instance, we discovered that 25 percent the 25 million packages sent every year with t grated logistics solutions that The development of value-added services, that the customer can send several packages to of all business packages has the wrong adres- Norway Post are connected with this form of combine the best of physical and such as payment solutions, SMS tracing and the same recipient at the same time, at a more ses. We therefore want to work with our custo- communication, enabling Norway Post to alerts, is a prioritised initiative in 2003. favourable price than before. mers to improve the quality of addressing. offer services such as SMS package arrival electronic services in physical Innovations include active alerts, which Arne Bjørndahl says that the interest in Production and less returns will bring the alerts and electronic payment solutions. transport, information develop- enable Norway Post to work with customers home delivery has increased significantly. costs down for both parties,» says Arne Last year was also used to prepare the intro- ment and payment,» says Senior to reduce parcel returns. During 2002 the Logistics division entered Bjørndahl. duction of a new pricing system for packages In November, Norway Post introduced a into two large home delivery agreements, with Norway Post improved the efficiency of from 1 January 2003. The price is now deter- Vice President Arne Bjørndahl.

PAGE 24 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 25 Consumer Division

Norway Post is more accessible, with 1,500 points of sale.

«We must keep the focus on the customer in everything we do»

Norway Post's Business Centres provide basic postal services and value-increasing solutions for business customers. Five Call Centres take care of customer service.

support Norway Post's value chain and busi- way to do so is to offer services to other «Queues are first and foremost a big city pro- ness concept communication and logistics companies outside Norway Post,» says Erik blem. We shall be applying various measures ERIK JOHANNESSEN Better service and increased Senior Vice President, solutions. Johannessen. to reduce waiting times. For example, it may Consumer Division The product range in Post in Shops must be appropriate to increase the number of staff be developed and extended. 19 Business Centres were established during the busiest periods and install more The Consumer division is responsible «For instance, we are moving towards during 2002. This means there is now a total Cash Points/ATMs at our premises,» explains for Norway Post’s nationwide sales offering ticket sales in the Post in Shops. This of 24 of these points of sales across the Erik Johannessen. network with physical, electronic and accessibility telephonic contact points for custo- will be introduced during 2003,» says Erik country. Norway Post's Business Centres «We have now moved into an operating mers through the Post Shop, Post in In 2002, the Consumer division completed the large-scale Johannessen. provide basic postal services and value-added phase, in which I am totally committed to Shop, Business Centre and Call Centre solutions for business customers. The centres placing the focus on the customer. With this in chains. restructuring of Norway Post's sales network. The establish- Five Call Centres have been set up in are adapted to the needs of business customers mind, we want to develop our sales channels, EMPLOYEES ment of Post in Shops and Post Shops means that Norway Haugesund, Kristiansand, Larvik, Sarpsborg and are located in areas with a high density of introduce simpler procedures and evaluate an 2002 4 800 and Steinkjer. The Call Centres take care of commerce and industry, where the customer increased level of self-service,» he continues. 2001 5 775 Post has almost 1,500 points of sale across the country. customer service, complaint management and base is sufficiently large. 2000 8 963 sales and provide a central switchboard for In 2002, two surveys were carried out to REVENUES IN NOK MILLION At the end of 2002, there were 1,146 not staying in the same old rut, but finding Norway Post. With their 283 employees, the measure customer satisfaction with Norway 2002 2 705 Post in Shops, 304 Post Shops, 24 Business non-traditional solutions instead. The group Call Centres processed a total of 1.5 million Post’s new sales channels. Almost 10,000 post 2001 2 698 2000 3 224 Centres and five Call Centres in operation. has also skilfully adapted products to the incoming calls in 2002, with an average customers were interviewed about Post in This means that the number of points of sale major restructuring that has been implemen- waiting time of 30 seconds. There were also Shops, Post Shops, Business Centres and Call has increased by more than 200 compared ted,» says Handelsbladet FK, which awards the 500,000 outgoing customer calls. In addition, Centres. All channels scored highly on service with the status before the restructuring pro- annual prize. the Call Centres answered 110,000 e-mails, approach and willingness to help. The surveys «The future will see physical cess which began on 1 March 2001. The service and product range in the Post redirected 800,000 postal items and dealt with conclude that customers are most satisfied and electronic services Shops chain, which is replacing the post office 60,000 written complaints. In a customer with Norway Post's geographical accessibility Post in Shops offering postal and bank of today, has been expanded with new financi- satisfaction measurement conducted in and opening hours. Both Post in Shops and becoming integrated and services to private customers have been esta- al services, insurance products and sale of September 2002, the Call Centres scored 88 Post Shops now have considerably longer supporting each other to a blished in co-operation with retail chains goods. The Consumer division has on a trial out of a possible 100. This shows that custo- opening hours than previously. Customers such as NorgesGruppen, COOP and Hakon bases sold different products such as mobile mers are very satisfied with all Call Centre also showed an increasing degree of satisfacti- much greater extent than Gruppen. Norway Post’s improvement in phones, CDs, video films and PC games. The services. In 2003, the call-centre chain is on with the competence of Post in Shop at present,» says custumer satisfaction and the fact that we product categories will be reviewed during planning to offer customer service for external employees. With regard to waiting times in Erik Johannessen. where awarded the 2002 Consumer Prize both 2003, on the basis of the experience gained in companies. Post Shops and Post in Shops, the surveys omorrow

show that the concept has been well received. 2002. «Our challenge is to obtain a return on the showed that Norway Post needs to work t «Norway Post has become very skilled at The goal is to have a product range that will investments made and utilise capacity. One even harder to serve customers more quickly.

PAGE 26 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 27 ErgoGroup

the conference, which covered topics such as PER ANDERSEN electronic signature, eAdministration and Managing Director, ErgoGroup information security. In 2002, ErgoGroup conducted an external customer survey, in which as many as 85 ErgoGroup develops and supplies IT services and electronic communication percent of customers declared themselves solutions and supports Norway Post’s satisfied with the company’s services. role as a trusted third party for «The result was very satisfactory. It shows eBusiness. that we have done a solid job in our customer EMPLOYEES orientation process,» says Per Andersen. 2002 2 123 2001 1 836 When the Post in Shops were being 2000 1 362 Streamlining of the health service is one of established, ErgoGroup took care of all the REVENUES IN NOK MILLION ErgoGroup’s major investment areas. installation of IT and data solutions. 2002 2 907 «ErgoGroup plays an important role in 2001 2 454 ning of the health service is one of the areas in developing integrated solutions to help achie- 2000 1 678 which ErgoGroup is investing heavily. ve Norway Post's vision of being the world’s SUBSIDIARIES ErgoGroup’s spearhead to the public sector, most future-oriented postal enterprise,» says ErgoBluegarden, ErgoEnet, ErgoEphorma, was for instance commissioned Per Andersen. ErgoEphorma, ErgoIntegration, to supply a common financial system to Helse He goes on to say that the company’s co- ErgoPeople, ErgoRunit, ErgoSensia, ErgoSolutions, Nord. operation with the other divisions in Norway ePartner, ElectricFarm, Buypass, Norway Post's smart card can be used for secure online identification, signature and payment. The card has also been used as a medical record for pregnant women in a pilot project. Post strengthened during 2002. When Norway Medix, TransWare, ZebSign and The company Buypass AS, which is owned Post purchased ErgoGroup (then Statens ErgoIDP (International Data Post). by ErgoGroup and Norsk Tipping, has develo- Datasentral) in 1995, there were two clear ErgoGroup also has shareholdings ped smart cards, which can be used for secure strategies behind the acquisition. The IT in Atento, Adviso and Interprise Pushing into Consulting. online identification, signature and payment. company would be able to help develop new This solution is also the central feature of the products to compensate for the falling revenu- agreement with Trygdeetaten, which was sig- es in the letter business. In addition, Norway ned in January 2003 for delivery of solutions Post was in great need of IT expertise to new markets for signature and encryption of information restructure its internal operations. sent over the Internet. «It is becoming ever clearer that we are an In 2002, the contract with Bertel O. Steen important part of Norway Post’s strategy and «It is becoming In 2002, Norway Post's IT company ErgoGroup grew by 15 per- was extended. This means that ErgoGroup is future and that Norway Post and ErgoGroup increasingly evident cent, which is more than the growth in the rest of the market. now responsible for all operation of IT sys- are a great combination,» says Per Andersen. «Our aspiration is to capture new market shares in 2003,» tems, as well as maintenance and development that ErgoGroup is an At ErgoGroup, computer operations are monito- of the automotive company´s business applica- says Managing Director Per Andersen. red round the clock. tions. essential part The IT company can look back on a year in hips», says Per Andersen. To adapt capacity, ons at home and abroad. ErgoGroup has increased its ownership in of Norway Post's which it won a large number of contracts. ErgoGroup made a number of workforce «Our challenge is to identify the right com- the Swedish logistics company TransWare AB, «New internet solutions will Despite a tough market and smaller volumes reductions in parts of its operations during panies that fit in with our three areas of con- which is a market leader in developing electro- evolve. We want to utilise the strategy and future» than expected, revenues increased by NOK 0.5 the year. centration: infrastructure, electronic services nic services in logistics and transportation. technology in a way that makes billion – from NOK 2.4 billion to NOK 2.9 «If our positive growth is to continue, we and administrative support systems,» explains The purchase is an important step forward in billion. The company is now the second must continue to work on skills development Per Andersen. ErgoGroup’s strategy to adopt a leading role as us more effective and profi- The concentration on communications and largest IT company in Norway. The sizeable and adaptation of organisation to the market. an IT supplier in transportation and logistics. table. The new data solutions growth is due to acquisitions and growth in This means that we must always ensure that logistics solutions has elevated ErgoGroup to a One year after Runit became part of the company’s own business area. we have the right skills in the right place,» he central player in the Nordic IT market. Ergo- ErgoGroup, the Trondheim-based company will organise data –content –in «Over several years we have developed an continues. Group’s goal is to simplify and streamline has played a central role in ErgoGroup’s a different way and will beco- omorrow extensive IT community. Size is important if eBusiness and IT operations for its customers industry and building/plant undertakings and

t me even more user-friendly,» we are to be competitive in the market. We In 2003, the company will focus on stream- in the public and private sectors. By making won customers, such as Bautas and SN Power. have also been in the market for a long time lining, new sales and acquisitions. The target is eBusiness simpler, ErgoGroup will help custo- In September, ErgoGroup held the 19th IT says Managing Director Per and some customers probably prefer us becau- to double turnover over a period of three to mers to improve their competitiveness. Conference in Lillehammer. Customers, Andersen. se of our solid expertise and good relations- four years, particularly by means of acquisiti- The public sector and in particular streamli- competitors and partners were assembled at

PAGE 28 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 29 Distribution Network Division

ANIELA GJØS Postal network of Senior Vice President, Distribution Network Division

The Distribution Network division develops and runs Norway Post's physical network, which covers collection, sorting and distribution of letters and parcels. the future EMPLOYEES 2002 16 083 2002 was characterised by improved quality and increased 2001 17 277 2000 17 968 efficiency in the Distribution Network division. «We will create

REVENUES IN NOK MILLION the most efficient distribution network in the country,» says 2002 6 744 Senior Vice President Aniela Gjøs. 2001 6 537 2000 6 326 At present, the main focus of the division, Gjøs. As part of the distribution improvement which develops and runs Norway Post's process, Norway Post is establishing a new dis- physical networks, is on Norway Post's future tribution organization from 1 June 2003. national logistics. «Norway Post will become the best distributor «We must have fewer and larger production reaching all households in the country six days facilities. Expectations of smaller volumes of a week,» continues the Senior Vice President. letter post and larger volumes of heavy goods The Distribution Network division concen- Distribution of letters and parcels is co-ordina- mean a new approach is required in order to trates its efforts on maintaining good quality ted in the new postal network. adapt to future technology and infrastructure and kept this goal in sharp focus throughout needs. Liberalisation of the postal market the year. means we have to be as prepared as possible The quality of A-Post has been better than to meet the future and we shall do so by ever. In the fourth quarter, 88.3 percent of this choosing the right terminal structure,» priority mail was delivered overnight, while explains Aniela Gjøs. the total result for 2002 was 86.7 percent of A-post delivered next day. This is well over The division is Norway Post's largest unit, the licence requirement, which requires with 16,000 people employed in the transpor- 85 percent of priority mail to arrive at its tation, sorting and distribution of post. In the destination next day. The 2001 result was 86.3 new distribution system, the knowledge of the percent. delivery personnel must be put to better use, «This shows that the work on quality has Norway Post has 16,000 employees in transpor- so that the operational processes are impro- produced good results. Our goal is to stabilise As much as 87.6 percent of A-post was delivered overnight in 2002. This is well over the licence The level of machine-sorted post also increased tation, sorting and distribution. ved. the quality at a steady, high level, so that the requirement, which requires 85 percent of priority mail to arrive at its destination by the next day. during 2002. One example could be to enter knowledge postal service becomes predictable and our of address changes into the systems, which customers are satisfied,» says Aniela Gjøs. Norway Post must operate profitably and Distribution Network transports approxima- «Norway Post will become the would improve addressing quality and reduce effectively. With this in mind, Norway Post tely seven million letters and 80,000 parcels «It is our ambition best distributor reaching all the percentage of wrongly sent post, making The level of machine-sorted post also put out for tender all post transportation with every day. Norway Post experienced a growth to develop a market- delivery times shorter. increased during the year. The machine- heavy goods vehicles south of Saltfjellet in in total volume of one percent compared households in the country six sorting level for small letters at Norway Post's March 2002. This means that from September with 2001. At the same time, the division has days a week,» says Senior oriented and efficient «Our goal is to create an efficient, stre- machine terminals was an average of 75 2002, 40 percent of transportation in the main succeeded in cutting costs by streamlining Vice President Aniela Gjøs. amlined network, in which we co-ordinate the percent in 2002, compared with 71 percent in postal service went to external transportation operations. distribution network distribution of letters and parcels in the most 2001. companies, while Norway Post Transport «We managed to do so by changing our cost-efficient manner. To achieve this goal, we In September 2001, Norway Post introdu- remains a large supplier. The biggest external working methods and improving planning,» of international must put into operation better IT technology ced new guidelines for post delivery, whereby carriers are Sognefjord Spedisjon og Transport explains the Senior Vice President. omorrow class» and equipment and improve production pro- customers can decide where their letterbox AS. t cesses, so that we don’t handle post more than shall be situated. Since the new strategy was In March 2002, Norway Post also called for One of Norway Post's most important necessary. We must also adapt a more modern introduced, some 93,000 letterboxes have been tenders for air-freight transportation of post future tasks will be to continue making the management style, a flatter organization struc- moved from joint stands to entrances to cus- and a principal agreement was signed with postal network more efficient. ture and shorter decision lines,» says Aniela tomers’ homes. SAS Cargo.

PAGE 30 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 31 Market overview

«The rapid development places new requirements Competition on how Norway Post meets its customers» brings new opportunities

Norway Post's most important task in the future will be to meet the market changes offensively by taking the opportunities to create the best possible solutions for its customers – both nationally and internationally.

Rapid development means that Norway Norway Post's operations and from custo- Post has to deal with its customers in new mers. Norway Post's business customers are ways. Norway Post's most important future becoming increasingly internationalised. task will be to meet the development offensi- Structural changes in trade and industry vely by taking every opportunity to create the affect Norway Post's market as customers best possible solutions for our customers – merge and form alliances with competitors or both nationally and internationally. other sections of the value chain, often inter- There has been a trend towards falling letter nationally. revenues, as electronic communication repla- ces physical letter post in the sales and distri- Liberalisation of the post market will bution network. Industries that have been result in tougher competition and interesting quick to move to electronic services are in opportunities for Norway Post. The EU has particular banking and finance and public adopted a time schedule for liberalisation of administration. High PC concentration and the European post market. The monopoly extensive use of online banking is helping to limit for letters falls to 100 grams in 2003 (in accelerate the transfer to electronic communi- Norway from 1 July) and to 50 grams in 2006. cation in Norway more than in the rest of The market for outbound cross border mail Europe. Unaddressed direct mail has grown by will be opened up completely in 2003 and the 4-6 percent, preventing an even more rapid EU commission is aiming for a fully liberali- fall in total letter volumes. The traditional sed post market in 2009. letter volume will increasingly be replaced by electronic alternatives, while the growth in To date, the liberalised section of the unaddressed post will slow down. Nordic market has not lost large market sha- res. Norway Post believes that this will change Norway Post is experiencing increased in time. New competitors will focus on the challenges and pressure from several areas – most profitable letter and parcel segments, from the government as the owner, from the such as business letters in densely authorities that regulate and control some of populated urban areas. Norway Post's

PAGE 32 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 33 Market overview

«Liberalisation of the post market will result in tougher competition and interesting opportunities» acquisition of City Mail Sweden is one exam- ple of this. The big international companies are already established in the Nordic region through their local co-operation partners and subsidiaries, for example Danzas (Deutsche «Use of electronic Post) in transport. Individual markets (Sweden and the UK) already face competition solutions represents from other companies. The largest postal play- ers are now focusing on the Nordic market, new opportunities for which collectively is the largest in Europe. Norway Post» The development of new electronic com- munication solutions has erased sector and traditional industry differences. Information exchange, physical transportation and pay- ment solutions are merging into common and standardized solutions. Players with access to physical and electronic distribution networks, in order to be less dependent on income from works for letters, express delivery, logistics and cesses to improve cost-effectiveness. The use of ErgoGroup plays a central strategic role for workforce, combined with a rising level of both nationally and internationally, and access letter operations. The focus is directed towards financial services. In order to strengthen all electronic solutions represents new opportuni- Norway Post in terms of putting into operati- education and increased demand for specialist to IT expertise, electronic databases and ware- operations that are exposed to competition, their business areas, the companies have made ties for Norway Post in information develop- on and developing new technology to streng- competence. Employees are becoming more housing, want to develop their competitive particularly express delivery, logistics, interna- large-scale acquisitions and have focused on ment, physical distribution and provision of then the products Norway Post offers in its demanding in terms of job content, training edges. Technological developments have hel- tional services/networks and financial services. the international market. Deutsche Post World payment solutions. The expected liberalisation markets. IT expertise is playing a progressively and personal development opportunities and ped to remove the distinction between sectors, This particularly applies to the «big four» Net (Germany), TPG (the Netherlands) are in letter distribution will increase long-term more important role in logistics, where a large are less loyal to employers. The challenge is to enabling players with access to physical and postal companies: Deutsche Post World Net companies listed on the respective stock- competition. Norway Post wants to continue part of the information flow is electronic. meet the workforce needs in labour-intensive electronic distribution networks to take shares (Germ-any), TPG (the Netherlands), La Poste exchanges with access to very large financial and consolidate its work to achieve improved Customers are more demanding in terms of jobs with lower requirements for formal in new markets. (France) and Royal Mail (the UK). resources. cost effectiveness and improved profitability. expertise and expect seamless service and training. Technology also plays a central role in tradi- With liberalisation now a reality, postal products that supply solutions which relate to The ethnic and cultural diversity in the tional letter operations, for example in the companies in the Nordic region and Europe As is the case with the European market, Norway Post has been at the forefront in the customer’s total value chain and needs. labour market will increase. This means that form of automated sorting centres. By intro- are moving to consolidate and restructure Norway Post is facing challenges on several responding to changes in the market by Norway Post has gained a competitive advan- companies and managers will have employees ducing automation, postal players reduce costs within their areas of attention. Efforts will be fronts. Norway Post is experiencing the same restructuring traditional letter operations, tage from its increased access to infrastructure who require a greater degree of individual and make letter product-ion more efficient. concentrated on reducing fixed costs and the changes in its market in the form of falling implementing new initiatives anchored in the and customer relations and by exploiting its handling in relation to skills and cultural/- potential for price growth in traditional letter letter volumes. This trend presents huge group’s core business and exploiting its IT expertise and position. ethnic background. In recent years, the major players in operations is expected to be limited. The challenges to Norway Post, in terms of pro- competitive advantages. Norway Post has also Europe have worked to diversify income flows major players aim to become global logistics duct and service development, improvement benefited from the fact that entry barriers still The labour market will continue to be and have consolidated in the domestic market, companies with integrated solutions and net- of service level and continuing internal pro- exist. characterised by diminishing growth in the

PAGE 34 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 35 Community report

CUSTOMERS: BUSINESS CONNECTIONS: SUPPLIERS: SUPPLIERS:

14 0,5 2,0 1,5 12,5 bill. 0,5 bill. 12,0 bill. 12 0,4 1,2 bill. 1,5 1,5 bill. 10 1,0 8 0,3 0,9 bill. 1,0 0,6 bill. 6 0,2 0,5 4 0,1 bill. 0,5 0,1 2

0 0,0 0,0 0,0 2001 2002 2001 2002 2001 2002 2001 2002 Sale of products Sale of operations, Purchase of transport services Investments and services property and other products and services

SUPPLIERS: LENDERS: EMPLOYEES: LOCAL AUTHORITIES :

4 0,5 8 5 0,4 bill. 3,3 bill. 3,2 bill. 6,4 bill. 4,1 bill. 0,4 6,0 bill. 4 3,7 bill. 3 6

0,3 3 2 4 0,2 2

1 2 0,1 1

0,1 bill. 0 0,0 0 0 Norway Post reaching 2001 2002 2001 2002 2001 2002 2001 2002 Purchase of other products Loan repayments Payroll and social services Taxes and fees and services

requirements and an improvement from 86.3 Posting points include all points of sale, post DELIVERY DISTRIBUTION more people the previous year. boxes, rural post delivery and terminals where 1600 1548 contract customers can deliver post. 1235 Development in recent years shows that Norway Post has Accessibility of postal services: Norway 1173 1200 increased its accessibility and improved the content and Post extended its sales network in 2002, with Delivery frequency: Norway Post is working 1021 101 more points of sale than the previous to ensure that more and more households and quality of its services. year. At the end of 2002 the sales network was businesses have a daily postal delivery and 800 as follows: does not have any plans to reduce post delive-

Norway Post's owner, the government, has have been met and quality has improved Norway Post's extra costs relating to com- • 304 Post Offices/Post Shops ry to five days, as is the case in Sweden. In line 400 decided that Norway Post will attend to some significantly in the last few years. munity services are assumed covered by the • 1146 Post in Shop outlets with this, the number of households and busi- matters relating to the community. These surplus from the reserved area and govern- • 24 Business Centres nesses without a daily postal delivery is con- 0 include the desire to ensure a nationwide Norway Post was granted a new licence ment purchase of postal services. As Norway In addition, 484,298 households and 27,875 stantly decreasing. During the last four years 1999 2000 2001 2002 provision of high-quality postal services at a on 1 October 2001, which is valid until 31 Post has streamlined its operations, the businesses were served with rural postal deli- 527 fewer households and businesses have not reasonable price. Where community-related December 2005. The reserved area covers the government has more than halved its purchase veries. The licence requires there to be a point had a postal delivery on every working day, Number of households not receiving deliveries six days a matters are concerned, Norway Post operates distribution of sealed and addressed letter post of unprofitable postal services over five years, of sale in each municipality. This requirement six days a week. In 2002, 152 more households week by means of licence requirements. with weight and price limits respectively. with the reduction in 2002 amounting to has been met. and businesses received their post six days a The main community-related matters in the In return for the reserved area, the licence NOK 168 million. week. licence are requirements relating to product requires Norway Post to attend to a number of Opening hours: According to the licence, the provision, accessibility of delivery-based matters relating to the community, in the form Government purchases opening hours must be adapted to the needs For the remaining 1,021 households and services and delivery times. of a universal service obligation. 1999 NOK 570 million of the individual place. Norway Post considers businesses, geographical conditions made it The licence also puts upon Norway Post an 2000 NOK 540 million extension of opening hours as an important unreasonably expensive to deliver post every Every year Norway Post reports on how obligation to apply cost-oriented prices on the 2001 NOK 540 million service improvement. In 2002, 75% of points day. This represents 0.05% of all post recipi- the licence requirements have been fulfilled. services required by the licence. The same 2002 NOK 372 million of sale were open more than 8 hours a day ents. This means that 99.95 percent of the Recent years have seen an expansion in the applies to discounts. In addition, geographi- 2003 NOK 305 million from Monday to Friday and 47% were open households in the country have their post range of services offered. The accessibility of cally uniform tariffs is required in the reserved more than 8 hours on a Saturday. delivered six days a week. However, this deve- Norway Post's services has increased, parti- area. The reserved area services and communi- Delivery times: For 2002, 86.7% of prioriti- lopment shows that the offer has improved cularly through the establishment of Post in ty services must be offered on conditions that sed letter post arrived on the following day. Points of posting: At the end of 2002 there and more households now receive deliveries of Shops. Requirements relating to delivery times are clear and non-discriminatory. This is 1.7%-points better than the licence were 31,238 points where mail can be posted. post six days a week.

PAGE 36 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 37 Environmental Report

Managing the FACTS AND FIGURES ENERGY CONSUMPTION UNIT QUANTITY Electricity kWh 176 253 405 District heating kWh 10 059 352 Fuel oil kWh 11 359 096 environment Estimated energy consumption* kWh 14 582 586 In 2002 Norway Post decided to introduce an environmental NORWAY POST’S OWNED VEHICLES Vehicles (trucks + delivery vans) Number 5700 management system. An important element in this work will be Percentage of trucks ≥ Euro2 % 70 Driven kilometres Km 101 179 142 to establish an environmental action programme for the group. LEASED TRANSPORT SERVICES Vehicles Tonkm 32 126 164 Norway Post contributes to the environ- Planes Tonkm 10 579 121 mental burden throughout its value chain, Trains Tonkm 80 902 283 both directly and indirectly. Purchasing of products, energy and services BUSINESS JOURNEYS ** has an indirect environmental impact. Cars Km 12 049 769 Flights (return) Number 3219 Consumption of products and energy in Norway Post's buildings and in transportation CONSUMPTION OF RAW MATERIALS has a direct impact on the environment in the Petrol Litres 4 107 273 form of emissions to air and water and gene- Diesel Litres 14 202 890 Fuel oil Litres 1 124 663 ration of noise and waste. Copying paper ** Ton 326 Norway Post actively seeks to reduce resour- * Estimated energy consumption in rented buildings ce consumption and work to reduce and **Does not include figures from ErgoGroup prevent emissions and waste. by means of an environmental management system. Taking legislation and regulations as a • Environmental work must help to reduce WASTE starting point, Norway Post must help to fulfil the burden on the environment, lower resour- CATEGORY UNIT QUANTITY* national environmental targets in the areas ce consumption, increase earnings and deve- Residual waste Ton 4160 Paper Ton 987 where our activities have an effect. A good lop environmentally sound services. Cardboard Ton 161 environmental profile is important in an Cardboard and paper mix Ton 2187 increasingly competitive market and is vital to In 2002 Norway Post's group management Plastic Ton 64 a company that wants to be at the forefront of team decided to introduce an environmental Wood Ton 840 management system. Important elements in Wastepaper Ton 92 development. Customers are becoming more Metal Ton 97 and more demanding in terms of environ- the environmental management system are a Food Ton 38 mental management and performance. By group-wide Environmental Action Program- 25% of Norway Post's owned properties. Nordic region’s first hydrogen vehicles and programme. Total energy consumption is Tyres Ton 35 taking environmental work seriously, Norway me, with concrete goals for Norway Post's The total energy consumption in these building its first hydrogen filling station. expected to be reduced by 6% in 2003. EE waste Ton 31 Post is showing a responsible attitude to its main areas, and an electronic environmental buildings fell by 4.5% in 2002. The percentage • Conclusion of the ELCIDIS project. Norway • Mapping of quantities, categories and Special waste Ton 105 Vehicle batteries Ton 7 employees, owner, customers and the commu- reporting system. The defined areas of concen- of remote heating has increased and is now Post has taken part in the joint European processing of waste. TOTAL WASTE TON 8699 nity at large. tration in Norway Post's environmental work 13% of total energy consumption. electric vehicle project for 2 years. The project • Space optimisation. * Quantities for rented buildings are estimated are transportation, waste, energy consumption • Environmental work in the Head Office involved testing goods transportation with • Logistics optimisation. Norway Post’s environmental object: in buildings, environmental management, Project (Norway Post's co-location project) is electric vehicles in five European cities. • Completion of Norway Post's Environmental Norway Post shall promote economically environment control, environmental training, focused on a high level of space optimisation • Introduction of the «Drive Right» pilot pro- Action Programme. EMISSIONS INTO THE AIR

sound development in environmentally effec- environmentally effective purchasing, «green» and resource-saving solutions. The co-location ject – a driving control system for fuel saving. • Completion and introduction of an electro- FOSSIL FUEL CO2 SO2 NOX tive operations. Environmentally effective workplaces, product development and com- will result in large quantities of surplus mate- The pilot project is underway in Bergen and nic environmental accounting system as a tool TOTAL EMISSIONS (TONS) 85467 6 283

means an increase in value creation with redu- munication. rials. Arrangements have been made for inter- Trondheim. for Norway Post’s environmental manage- Norway Post's percentage of emissions ced environmental load. The main principles nal and external re-use of equipment, special • Mapping of waste categories and quantities ment. from vehicle traffic in Norway* 0,6% 0,3% 0,4% on which the environmental work is based: Norway Post's main environmental activi- furniture and IT equipment, as well as large- in Norway Post's terminals. • Development of a management environment * Based on the last available figures from SSB (1999) • Environmental work is a line and manage- ties in 2002: scale waste sorting. Working methods and • Start-up of the «Introducing Environmental training programme. ment responsibility • Continuation of the Norway Post Energy technology will be introduced, which will have Management in Norway Post» project. The • Development of procedures for environmen- DISTRIBUTION OF CO2 EMISSIONS DISTRIBUTION OF NOX EMISSIONS • Environmental work must be part of day-to- programme. The aim of the project, which resource-saving and waste-reducing effects in project includes development of a group-wide tally effective purchasing as part of Norway 2% 1% day operations in the company and be inte- was initiated in autumn 2001, is to reduce operations. The project has imposed environ- Environmental Action Programme and an Post's purchasing guidelines. 4% 7% grated in important decisionmaking processes energy consumption in Norway Post's large, mental requirements on building proprietors electronic environmental reporting system. 32% 11% 62% 81% in all parts of the organisation. owned buildings by 20% before 2005 and and those responsible for purchasing products • Environmental work must be systematic, increase consumption of renewable sources of and services. In 2003 Norway Post will focus on preventive and long-term. energy. • Participation in Bellona’s Hydrogen car environmental work in the following areas: • Environmental work must be documented The programme covers 22 buildings, approx. project. The project includes testing of the • Continuation of the Norway Post Energy Fuel oil Vehicles Planes Trains

PAGE 38 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 39 Notes

General 1999, part of the Professional Services 2002 companies in which Norway Post has a rences are adjusted directly against period. Changes in pension commitments Norway Post became a limited company Division in Posten SDS AS was hived off Norway Post became a limited company controlling interest are presented as equity. and pension funds due to variations on 1 July 2002, with the government to form the company Ephorma AS and on 1 July 2002, with the government one financial unit. All company accounts from estimates and changes to assump- represented by the Ministry of Transport merged with Telenor Allianse AS. Posten represented by the Ministry of Transport consolidated in the group accounts have Accrual, classification and valuation tions (estimate changes) are spread and Communication as the sole share- SDS AS owns 50 % of Ephorma. In and Communications as the sole share- been prepared in accordance with stan- principles over the estimated average remaining holder. The company was formed as a autumn 1999, Posten SDS AS establis- holder. In this connection, existing paid-in dard accounting and valuation principles The accounts are prepared in accordan- accrual period if they exceed 10% of public corporation with limited liability on hed the companies Mondex Norge AS capital in Norway Post was converted to and items in the income statement and ce with generally accepted accounting whichever is greater of pension commit- 1 December 1996. Continuity in accoun- and Mondex Norge Originator AS. share capital. When Norway Post was balance sheet have been classified using principles and Norwegian law. ments and pension funds at the begin- ting and taxation was maintained during established as a limited company, a sub- uniform definitions. All major transacti- Items are classified in the accounts on ning of the year (corridor). Non-amorti- the transition to limited company. The 2000 ordinated loan of NOK 400 million from ons and intercompany accounts have the basis that all assets connected with sed estimate changes and changes in company ceased as a public corporation As from 1 January 2000, canteen servi- the government was converted to equity. been eliminated. the product cycle, receivables due for pension schemes are shown in note 2 with limited liability as a result of, and at ces in Norway Post were transferred to An additional NOK 1660 million was also Shares in subsidiaries have been elimina- repayment within one year and assets the same time as, the registration of the Posten Renhold AS, which changed its injected as new equity. When the compa- ted in accordance with the acquisition that are not for the company’s perma- Other income and expenses newly formed limited company, without name to Postens Servicepartner AS. ny became a limited company, it was method of accounting. The difference nent ownership or use are current The item other income and expenses following the standard rules for winding- Norway Post retained an 85% ownership decided to transfer the waiting pay between the purchase price paid and the assets. Other assets are fixed assets. includes restructuring costs, gain and up and discontinuance accounting. This share. Norway Post acquired Oslo commitment from the government to book value of net assets at the time of All liabilities directly connected with the loss on the sale of fixed assets and gain means that the annual accounts cover Container Stevedor AS (100%), Wajens Norway Post, which meant that NOK 121 purchase is analysed and allocated to product cycle are considered as current and loss on the sale of subsidiaries in the total activities for the two compani- AS (100%), Kort Prosess AS (51%), million was charged to other equity and the individual balance sheet items liabilities, even if some are due for the group. See note 4. es in 2002. The accounts have been pre- Nettlast AS (100%), Nettlast Hadeland allocated as a commitment. Continuity in according to the actual value. Any repayment after one year. pared in accordance with the Norwegian AS (100%), Nettlast Helgeland AS (100 accounting and taxation was maintained excess value that cannot be linked to Taxes Accounting Act and generally accepted %) and Netaxept AS (48%). Posten SDS during the transition to limited company. specific balance-sheet items is recorded Current assets are valued at whichever Tax costs comprise payable tax for the accounting principles. AS hived off its payroll systems and In 2002, Posten Sverige AB decided to as goodwill in the balance sheet and is lower of acquisition cost and actual period and changes in deferred tax/tax personal administration services to form sell its shareholding of 33.3% in Pan depreciated using the straight-line met- value. Fixed assets are valued at the asset. Payable tax is calculated on the Historical development a separate company, ErgoBluegarden AS. Nordic Logistics (PNL) and Post Denmark hod over the estimated economic life. acquisition cost minus any depreciation. basis of the results for the year in Since its establishment in 1996, the Similar operations in Merkantildata and and Norway Post increased their Companies acquired during the year are If the actual value of a fixed asset is terms of taxation. Net deferred tax/tax Norway Post Group has carried out the IBM were acquired and placed under ownership share to 50%. incorporated in the accounts from the lower than the book value and the fall in asset is calculated at 28% of the tem- following major transactions: Bluegarden. Posten SDS AS acquired PNL purchased 99.78 % of ABE, 24-hour date of purchase, while companies sold value is not considered to be temporary, porary differences between the financial 40% of transport solutions provider express goods. The shares in Postens are included in the accounts up to the the asset is written down. If the basis reporting basis and the tax basis, as well 1996 TransWare AB in Gothenburg, securing a servicepartner AS were sold to ISS date of sale. Subsidiaries are consolida- for the write-down is no longer appli- as any tax carried forward at the end of Norway Post was established at the end majority of seats on the board of direc- Norge AS. Norway Post further enhan- ted from the date on which effective cable, it is reversed. the accounting year. Temporary differen- of 1996 with the subsidiary Posten SDS tors and an option to purchase additio- ced its market position in Sweden by control is transferred to the Group. ces which either increase or reduce the AS (100%) and Billettservice AS (50 %) nal shares. acquiring 57% of the shares in CityMail Revenues amount of tax and which are reversed or as an associated company. Subsidiaries Sweden AB. Norway Post increased its Jointly-controlled companies are defined Revenues are entered as and when ser- may be reversed in the same period are of Posten SDS AS include Computas AS, 2001 ownership in TSI from 79.47% to 100%. as companies for which the Group has vices are performed. The sale of postage equalised. Deferred tax asset on net DeltaPro AS and Enet AS. With effect from 1 January 2001, The shares in Netaxept AS and the con- agreements with the other owners stamps is classified as advance payment tax-reducing differences that are not Posten SDS AS and its subsidiaries tent of Nettlast Helgeland AS were sold regarding joint control of the enterprise. for the sale of postal services. equalised and loss brought forward is 1997 changed name to ErgoGroup AS. Norway in 2002. ErgoGroup purchased operati- Owner interests in jointly-controlled Otherwise, revenues are entered contin- entered on the basis of expected future The remaining shares in Billettservice AS Post acquired 95 % of the shares in 1to1 ons in Runit AS, which were continued in companies are valued using the propor- uously as and when services are perfor- earnings. Deferred tax and tax asset and Forbruker-Kontakt AS were acqui- Factory AS, a subsidiary of the listed a new company, ErgoRunit AS. ErgoGroup tionate consolidation method, i.e. the med. Revenues from long-term projects that can be carried forward is entered red, while a 25% share was acquired in company E-Line Group ASA. At the same increased its ownership in Objectware share of income, expenses, assets and are entered on the basis of continuous net in the balance sheet. NordPack AB, with the other Nordic pos- time, E-Line Group ASA acquired 100% AB from 40% to 70%, while ErgoConnect liabilities are entered on separate lines settlement based on completion. tal companies holding a corresponding of the shares in Posten Escape AS. AS was sold to Adviso AS. in the accounts. Tangible fixed assets and depreciation share. Posten SDS AS hived off the Billettservice was sold to Ticketmaster Pensions Tangible fixed assets are entered at school administrative systems in the UK Ltd. Together with Telenor, ErgoGroup 2003 Associated companies are defined as Net pension costs comprise pension acquisition cost after deductions for wholly owned company IPOS AS. established a separate company, ZebSign In view of the EU’s postal directive, the companies in which Norway Post has a contributions for the period, including accumulated depreciation and write- AS, to offer the market electronic ID government has submitted a proposal significant influence. Owner interests in future wage growth and interest on downs. For large investments with a long 1998 solutions. Each party has an equal share for changes to the Postal Services Act associated companies are valued using commitments, with deductions for manufacturing period, interest is capita- At the end of 1998, Norway Post’s clea- in the company. Together with Telenor, with regard to the size of Norway Post's the equity method and the company’s employee contributions and expected lised as part of the acquisition cost. ning services were transferred to DNB and Accenture, ErgoGroup establis- reserved area. The proposal reduces the share of the year's profit/loss in the pension fund yield. Tangible fixed assets are valued at whi- Posten Renhold AS (85 %). The owners- hed a company to offer electronic pro- weight limit for the reserved area from associated company is offset against Prepaid pensions are the difference bet- chever is the lower of acquisition cost hip share in Billettservice AS was redu- curement services to their parent com- 350 grams to 100 grams and reduces the cost price of the owner interest and ween the actual value of the pension and actual value. The assets are written ced to 77%. NordPack AB changed its panies and the market in general. In the price limit from five times the basic included under financial income or finan- funds and the present value of the cal- down to actual value if the actual value name to Pan Nordic Logistics AB (PNL). partnership with Norsk Tipping AS, rate to three times the rate (the basic cial expenses. culated pension commitments minus is the lower of the two values and the Posten SDS AS divested some smaller ErgoGroup established the company rate is the price for domestic priority changes in estimates and pension sche- fall in value is not of a temporary nature. subsidiaries, including Computas AS. Buypass AS. ErgoGroup took over the mail in the first weight category, which is In the income statement, the minority mes. Prepaid pensions are entered as a An individual valuation of the individual operation of IT services in Gjensidige 20 grams), with effect from 1 July 2003. interests’ share of net profit is shown long-term asset in the balance sheet if asset is made with regard to any write- 1999 NOR Forsikring and Gjensidige NOR From the same date, foreign mail will be after taxes. This means that all income it is likely that the over-financing can be down. Norway Post established Posten Escape Spareforsikring. ErgoGroup acquired open to full competition. ErgoGroup has statement items include the minority utilised or paid back. In a similar way, a If the basis for the write-down is no AS (100%) and acquired 40% of Tran- 50% of the shares in Ephorma AS, acquired 25% of the shares in share. The minority share of equity is long-term liability appears in the longer applicable, it is reversed. New sport Systems International AS, the increasing its ownership share to 100%. Helsekomponenter AS through its subsi- shown as a separate item under group accounts when the pension commitment provisional Norwegian Accounting latter being treated as a joint venture In addition, the content of Ergo Business diary ErgoSolution AS. equity. is greater than the pension funds. Net Standards relating to the writing down company together with PNL. AS was sold to Adviso AS, in which Ergo pension costs are classified in their of fixed assets were not taken into use At the end of 1999, the financial services Business AS has a 27% ownership share. ACCOUNTING PRINCIPLES Foreign companies have been translated entirety as payroll and related costs in in 2002. Tangible fixed assets are depre- division was hived off from Norway Post Norway Post acquired the Danish courier Consolidation in the balance sheet at the closing the income statement. Changes in the ciated using the straight-line method and transferred to Postens Økonomi- company «De Grønne Bude » through its The consolidated accounts show the exchange rate, while average exchange pension commitment that are due to over the estimated economic life. tjenester AS, a wholly-owned subsidiary subsidiary Transport Systems total financial results and overall financi- rates for the year have been applied in changes in pension schemes are accrued Ordinary depreciation starts from the of Posten SDS AS. At the beginning of International AS (TSI). al position when the parent company and the income statement. Translation diffe- over the estimated remaining earning time when the asset is put into normal

PAGE 40 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 41 Notes

operation. This means that depreciation stamps and other goods sold through In financial leasing the asset is entered does not apply to construction in pro- the sales network. Inventories are ente- at the acquisition cost when the asset gress. red in the balance sheet at whichever is was taken over. The asset is depreciated NOTE 2 - PAYROLL EXPENSES Normal maintenance and repair costs the lower of acquisition value and expec- according to rules governing correspon- are expensed immediately. Costs of ted net sales value. ding tangible fixed assets. The interest replacements and renewals that appre- part of financial expenses is treated as NORWAY POST NORWAY POST GROUP ciably increase the standard of the Accounts receivable an ordinary financial expense. assets are capitalised. Accounts receivable are entered in the 2000 2001 2002 2002 2001 2000 balance sheet at the nominal value after Foreign exchange Development costs deduction for expected bad debt. Current receivables and liabilities in 5 882 5 854 5 596 Salaries 6 825 6 952 6 643 Costs relating to the development of IT foreign currency are valued at the systems are capitalised and depreciated Uncertain liabilities exchange rate on the balance sheet 820 803 755 National Insurance contributions 968 957 933 using the straight-line method over the Uncertain liabilities are entered if there date. Currency changes affecting income 328 359 348 Pension costs 446 420 377 expected life of the systems. Costs rela- is a high probability that they will be are entered under financial income and 386 310 207 Other benefits 246 299 378 ting to ongoing modifications and deve- settled and the value can be reliably financial expenses, apart from the 7 416 7 326 6 906 Payroll expenses 8 485 8 628 8 331 lopment of existing systems are expen- estimated. The best estimate is used effects of individual transactions in sed as maintenance. when calculating the settlement value. international postal development, which 801 252 1 056 920 1 246 428 Board of Directors Other development costs incurred by Other important matters are discussed are entered under operating revenues 351 444 225 982 Corporate assembly the group for the development or fur- in note 21. and operating expenses. 1 250 000 1 300 000 1 350 000 Auditor’s fees for annual accounts 6 389 485 4 440 510 3 111 000 ther development of existing and new Translation differences relating to finan- 4 074 890 1 715 750 1 388 050 Auditor’s fees for other financial audit 4 711 923 6 379 589 5 546 500 products, production processes etc, in Restructuring costs and redundancy cial instruments that have been designa- 937 500 518 000 138 624 Auditor’s consultancy fees 3 671 454 518 000 937 500 order to secure future earnings are payment ted and proved to be effective in hed- 23 389 21 211 19 407 No. of full-time jobs/man-labour years 23 509 24 506 25 684 expensed as they arise. These are capi- Restructuring is a planned programme ging net investment in foreign companies 27 178 25 126 22 807 No. of employees at 31.12 26 886 29 563 32 365 talised from the time a product is deve- involving major changes to the size of are entered as translation differences 23 281 26 861 27 198 No. in pension scheme at 31.12 29 442 29 643 25 630 loped and a customer base is establis- the company or the way it is run. under group equity. In the company hed that guarantees future earnings. Provisions for restructuring are expen- accounts, loans in foreign currency that sed when the programme is decided and are used for hedging are entered at the Shares and long-term investments the costs are identifiable, quantifiable historical rate of exchange. Hedging is Share investments in subsidiaries and and not covered by corresponding reve- taken into account by capitalising the Remuneration Remuneration of the Board of Directors lows the yield on government bonds. associated companies where the invest- nues (matching principle). realised currency gains and losses. The Board of Directors has no pension and the corporate assembly refers to Payment of pension benefits is guaran- ment is of a long-term and strategic Employees who have been made redun- Goodwill from the acquisition of foreign scheme or any other arrangements amounts recorded in the accounts. The teed by the Government. The pension nature are valued as fixed assets. The dant have a right to redundancy pay- companies is entered at transaction other than remuneration. corporate assembly ceased to exist in commitments include pension schemes same valuation applies to other strate- ment, which is paid for a period until rate of exchange. 2001, therefore no payment was made in for executive personnel. gic share investments. Shares that are they obtain new employment. When The Chief Executive Officer has an 2002. In addition, the group has collective pen- not valued as an investment in an asso- Norway Post became a limited company Cash flow statement annual salary of NOK 2 million. The sion schemes in life assurance compani- ciated company are entered at the cost on 1 July 2002, the government decided The cash flow statement has been pre- retirement agreement of the Chief Of the total auditor’s fees of NOK 14.7 es. price. The cost price also includes trans- that the company itself would cover the pared in accordance with the indirect Executive Officer stipulates a retirement million in 2002, NOK 8.5 million were fees action costs connected with the acquisi- expenses relating to redundancies bet- model. Holdings of cash and cash equiva- age of 65 years, but he is entitled to to the group auditor. This figure breaks Calculation of pension costs and com- tion. Write-downs are done on an indivi- ween 1 July 2002 and 31 December 2004. lents consist of liquid assets, including resign at 60 years and receive a supple- down to NOK 5.2 million in auditing fees, mitments is based on the following dual basis provided the fall in value is not The redundancy payment commitment is the sales network’s liquidity require- mentary pension amounting to 66% of 3.1 million other financial auditing and 0.2 financial and actuarial assumptions for due to temporary causes. In Norway calculated on a best estimate basis. ments. his salary at the time of retirement. million in consultancy fees. the group: Post's accounts the cost method is 2002 used for all ownership shares in limited Leasing In 2002, Norway Post introduced a bonus Pension commitments Discount rate 6.0% companies, including subsidiaries. Leasing agreements are registered eit- scheme for the Chief Executive Officer Norway Post and its subsidiaries have Wage adjustment 3.3% her as ordinary leases or as a form of and executive management. The scheme pension schemes under which most N. Ins. base rate adjustment 2.9% Inventories financing based on a review of the actual allows for a bonus payment of up to 25% employees are entitled to specific future Pension adjustment 2.9% Inventories consist mainly of postage substance of the individual agreements. of salary. The primary requirement for a pension benefits (benefits plan). The Yield 6.1 – 6.5% bonus payment is a pre-tax profit. If a pension benefits are normally based on Vol. redundancy (> 50 years) 0.0 – 8.0% bonus is paid out following positive the number of pension-earning years Vol. redundancy (< 50 years) 0.0 – 2.5% NOTE 1 - OPERATING REVENUES results, a similar bonus may be paid and the wage level on reaching retire- based on individual targets. The final ment age. Norway Post has a group pen- There were no changes in the financial bonus decision is made by the chairman sion scheme for its employees in the assumptions that were used as a basis NORWAY POST NORWAY POST GROUP of the board (by the chief executive offi- Norwegian Public Service Pension (SPK), in 2002 compared with 2001 and 2000. cer for the executive management). No a scheme that comprises benefits in bonus will be paid out if an employee has accordance with the Act governing the On account of the large staff cutbacks 2000 2001 2002 2002 2001 2000 ceased to work for the company on the Public Service Pension Fund. planned for the coming years, it has bonus payment date. On the basis of the The calculation of pension costs and been decided to change the voluntary 8 171 8 490 8 049 Communication products 8 244 8 482 8 202 specified criteria, no bonus will be paid commitments is based on the Norwegian redundancy to 8% up to 50 years and 2 143 2 096 2 297 Logistics operations 3 464 3 133 2 762 out for 2002. Accounting Standards for Pension 2.5% above 50 years. There has been a 1 032 1 364 1 336 Consumer 1 333 1 387 1 073 Expenses. However, the public service considerable increase in disability with- IT services 1 769 1 460 977 The Chief Executive Officer’s salary and pension fund scheme is not funds-based, drawals in recent years and the tariff in 678 536 360 Other, including eliminations 356 546 645 other remuneration for 2002 amounted but management of such a fund is simu- the actuarial calculations for 2002 has 12 024 12 486 12 042 Operating revenues 15 166 15 008 13 659 to NOK 2,240,415, including Board fees of lated (a «fictive fund»), as if the funds changed from 50% to 140%. The chang- NOK 100,000 in ErgoGroup. were invested in long-term government es to voluntary redundancy and disability His pension premium payments amoun- bonds. Yield on the starting fund was tariff increase the gross pension com- ted to NOK 1,437,894. 6.46% from 1 December 1996, while the mitments and the annual pension cost. The proportion of the group’s operating revenues generated by business abroad was 2.5 % in 2000, 4.8 % in 2001 and 7.2 % in 2002. yield on the change in pension funds fol-

PAGE 42 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 43 Notes

NOTE 2 CONT. - PAYROLL EXPENSES NOTE 3 - OTHER OPERATING EXPENSES

NORWAY POST NORWAY POST GROUP NORWAY POST NORWAY POST GROUP

2000 2001 2002 2002 2001 2000 2000 2001 2002 2002 2001 2000 Net pension costs 487 480 461 Present value of pension earnings for the year 532 537 530 909 943 988 Cost of premises 1 129 845 835 488 560 606 Interest cost of pension commitment 625 583 507 825 1 198 1 288 Misc. external services 380 340 340 (485) (528) (567) Return on pension funds (585) (552) (504) 299 225 118 Travelling expenses 199 303 354 (116) (116) (116) Employees’ 2% contribution (117) (116) (117) 137 90 126 Marketing 162 119 162 2 Estimate changes 5 766 887 717 Other costs 750 1 001 743 10 10 Changes in pension schemes 9 12 2 936 3 343 3 237 Total other operating expenses 2 620 2 608 2 434 374 406 396 Net pension costs 469 464 416

Net pension commitment Miscellaneous external services includes Most research and development costs (9 070) (10 243) (11 064) Estimated accrued commitment (11 445) (10 720) (9 463) internal group purchases of NOK 529 relate to IT development. 8 559 9 365 10 114 Estimated value of pension funds 10 433 9 807 8 917 million in 2000, NOK 902 million in 2001 In 2002, NOK 26.2 million was expensed (511) (878) (950) Net estimated pension commitment (1 012) (913) (546) and NOK 945 million in 2002. and an addition NOK 380 million was 147 136 Unrecorded changes in pension schemes 118 146 capitalised. See note 7. 186 609 1 047 Unrecorded estimate changes 1 095 626 204 (325) (122) 233 Book pension commitment 201 (141) (342)

The unrecorded estimate change (corri- are spread over the remaining expected Net pension funds are included in inte- dor) for Norway Post increased by NOK pension-earning period. Employer’s rest-free long-term receivables in note 438 million from 2001 to 2002. The incre- National Insurance contributions are 10. ase is attributable to higher wage included in the individual figures above. The government budget for 2003 stipu- growth and more withdrawals from the Subsidiaries also have supplementary lated that Norway Post would have to disability pension than the long-term plans on top of the benefit plans arran- make extraordinary payment of NOK NOTE 4 - OTHER INCOME AND EXPENSES assumptions. In accordance with gement. For these companies premiums 1,475 million into the Public Service Norwegian accounting standards for are expensed. Pension Fund. pension costs, the estimate changes are The above specification of capitalised NOK 600 million of the amount will be NORWAY POST NORWAY POST GROUP entered under «corridor» and excess pension commitments for 2000 includes compensated by the added new equity. amounts are entered over the average a provision of NOK 200 million for disabi- 2000 2001 2002 2002 2001 2000 remaining earning period of 15 years. lity pensions. The provision is classified in Changes to pension commitment that the income statement as other revenues 1 200 105 Restructuring 110 1 200 are due to changes in pension schemes and expenses, cf. note 4. (138) (458) (105) Net gain on fixed assets (116) (447) (138) Gain on disposal of subsidiaries (18) (78) 1 062 (458) 0 Total other income and expenses (24) (525) 1 062

Restructuring/provision for disability Sale of fixed assets In 2002, Norway Post sold five post buil- payments In 2001 Norway Post sold most of its dings, three post terminals, two studio In 2000, provisions of NOK 1,000 million post buildings and its future main post apartments and two plots of land. for restructuring and NOK 200 million to office, Posthuset. The sale of fixed assets in 2002 recor- cover disability pension payments were In connection with the sale of Posthuset, ded a net gain of NOK 105 million. This made. The provision for restructuring an agreement was signed whereby the amount includes the additional fee of was increased by NOK 105 million in 2002. buyer would pay an additional fee per NOK 46 million relating to Posthuset. This increase is to cover personnel-rela- square metre for an approved arrange- ted measures and lease rental for vaca- ment on enlargement of the property. ted premises. This additional fee was paid in 2002.

PAGE 44 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 45 Notes

NOTE 5 - FINANCIAL INCOME AND FINANCIAL EXPENSES NOTE 7 - INTANGIBLE ASSETS

NORWAY POST NORWAY POST GROUP NORWAY POST NORWAY POST GROUP

2000 2001 2002 2002 2001 2000 2000 2001 2002 2002 2001 2000

10 44 90 Interest income from group companies 222 234 22 IT development, rights etc. 474 330 279 75 68 68 Other interest income 88 93 98 314 136 154 Deferred tax asset 208 153 336 24 5 Gain on disposal of subsidiaries 9 Goodwill 957 818 329 4 6 9 Exchange gains etc. from financial investments 3 8 4 536 370 185 Intangible assets 1 639 1 301 944 8 32 22 Other financial income 23 4 2 97 174 194 Financial income 114 105 104 Most research and development costs rela- million was capitalised. See note 3. NOK 257 million. See note 21. te to IT development. In 2002, NOK 26.2 mil- In 2002, Norway Post sold IT systems to 1 4 2 Interest expenses from group companies lion was expensed and an addition NOK 380 ErgoGroup with a total market value of 114 164 137 Other interest expenses 158 181 118 5 33 Loss from sale of subsidiaries NORWAY POST Accumulated Depr/write 11 15 5 Exchange losses from financial investments 6 37 24 cost price at Depreciated Book value Additions Transfers Reductions -downs Book value Depreciation 01.01 at 01. 01 at 01.01 in 2002 2002 2002 2002 at 31.12 period 2 27 32 Other financial expenses 23 12 128 215 209 Financial expenses 187 230 142 IT development, rights etc. 359 184 176 5 7 170 6 12 2-6 years Goodwill 11 2 9 5 years Construction in progress. 59 59 52 (7) 93 10 Total IT development, rights etc. 418 184 234 68 0 262 8 31

GROUP IT development, rights etc. 513 248 265 223 7 8 117 371 2-6 years Construction in progress. 65 65 46 (7) 103 NOTE 6 - TAXES Goodwill NORWAY POST NORWAY POST GROUP Subsidiaries: TSI AS 103 19 84 30 9 105 10 years Wajens AS 28 5 23 3 20 10 years 2000 2001 2002 2002 2001 2000 Oslo Container Stevedor AS 92 16 76 9 67 10 years KortProsess AS 1 1 1 4-5 years (42) (145) (198) Diff. rel. to current balance sheet items (225) (208) (50) 1to1 Factory AS 24 24 (805) (226) 38 Diff. rel. to long-term balance sheet items (37) (199) (799) CityMail AB 71 6 65 10 years (20) (647) Tax loss carried forward (975) (157) (69) (274) (86) 265 Net pension commitment 231 (109) (283) Other goodwill: No basis for capitalisation 270 82 Norway Post 11 2 9 5 years (1 121) (477) (542) Basis for deferred tax/(tax asset) (736) (591) (1 201) ErgoGroup 505 45 460 100 (5) 64 491 10 years (314) (134) (152) Deferred tax/(tax asset) (206) (165) (336) TSI Group 196 21 175 (15) 17 143 10 years (2) (2) Payment on dividend/other (2) 12 PNL 14 2 12 5 years (314) (136) (154) Deferred tax/(tax asset) (208) (153) (336) Wajens AS 4 4 CityMail AB 54 9 45 6 years (937) 639 (61) Operating result before tax Group adjustment 6 (1) (5) 1 206 (639) 61 Differences in accounts/tax Total goodwill group 949 130 818 284 (20) 6 120 957 269 0 0 Basis for tax payable 75 0 0 Tax payable

Goodwill the shares in CityMail Sweden AB years. In conjunction with the purchase 75 0 Tax payable 62 42 115 Acquired goodwill in Norway Post in 2002 amounts to NOK 71 million. On the basis of 20% of shares in the company in (332) 178 (18) Change in deferred tax/(tax asset) (58) 196 (346) relates to two operating units and their of the profitability assessments made at 2001, the depreciation period for the (257) 178 (18) Taxes 4 238 (231) content, which were taken over from the time of acquisition, earnings are acquired goodwill was reassessed and ErgoGroup. One unit consists of an out- expected to span a minimum of 10 years. changed from 12 to 10 years. The com- put data unit, including printers and fol- Goodwill will be depreciated on a pany’s position as leading courier com- der/inserters, and the other is a straight-line basis over this period. pany in the Nordic countries makes it Net deferred tax asset are capitalised, The classification of deferred tax and COMCDR, which includes computer and highly profitable and Norway Post will be as the asset can be utilised in connecti- deferred tax assets in the accounts is microfilm equipment. These will be Goodwill from the acquisition of 100% of able to benefit from its strong market on with expected future earnings. The presented in notes 16 and 7, while tax depreciated over 5 years. the shares in Transport Systems position for a long time to come. tax losses to be carried forward arose in payable is presented in note 18. International AS will be depreciated over TSI AS’s operating concept forms the the period 2000-2002. Goodwill from the acquisition of 57% of an expected economic lifetime of 10 basis for a positive transfer of know-

PAGE 46 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 47 Notes

how and experience to other parts of AS in 2000 and Gjensidige NOR’s compu- and delivery operations). Norway Post Norway Post's business and, in the long ter operations in 2001. Anticipated ear- therefore expects to achieve a commer- term, for increased value creation for nings from the acquisitions are expected cial return in these investments over a NOTE 9 - INVESTMENTS IN SHARES the group. to span a minimum of 10 years and long period of time and for this reason In 2001, the TSI group acquired operati- depreciation will take place on a has chosen to depreciate goodwill in Subsidiaries/ Ownership/ ons in Sweden and Denmark. Acquired straight-line basis throughout this peri- these companies over a 10-year period. voting share Book goodwill, which at 31 December 2001 od. Jointly controlled companies Acquired Address at 31.12.2002 value 2002 amounted to NOK 175 million, will be IT development, rights etc. depreciated over 10 years on the basis Oslo Container Stevedor AS and Wajens The depreciation period is 2 – 6 years, of anticipated earnings. AS are financially sound companies achi- depending on the lifetime of the individu- ErgoGroup AS 01.12.96 Oslo 100 % 431 eving earnings that are among the best al system. The systems have been indivi- Oslo Container Stevedor AS 12.04.00 Oslo 100 % 107 Acquired goodwill in ErgoGroup AS total- in their business areas. Both companies dually assessed. Transport Systems International AS (TSI) 01.01.99 Oslo 100 % 167 ling NOK 460 million is due to the acqui- are recognised as having strong brand Wajens AS 12.04.00 Oslo 100 % 36 sition of operations in the companies names in their respective fields (third- Nettlast AS 15.11.00 Oslo 100 % 30 ErgoBluegarden AS and ErgoIntegration party logistics and distribution/pick-up Pan Nordic Logistics AB (PNL) 15.08.97 Sweden 50 % 28 Nettlast Hadeland AS 15.11.00 Jaren 100 % 5 Nettlast Helgeland AS 15.11.00 Mosjøen 100 % 3 Posten Forbruker-Kontakt AS 01.10.97 Oslo 100 % 3 Kort Prosess AS 26.06.00 Oslo 51 % 3 1 to 1 Factory AS 30.06.01 Oslo 100 % 0 CityMail Sweden AB 01.05.02 Sweden 57 % 138 Book value 951

NOTE 8 - TANGIBLE FIXED ASSETS Share investments, group

Construction in progress Construction Transportinvest AS Oslo 9 % 54 Vehicles Buildings, Machinery in progress Adviso AS Oslo 27 % 68 NORWAY POST Machinery FF&E real estate and plant Buildings Total Axiti AS Oslo 1 % 1 Atento AS Oslo 29 % 4 Acquisition cost 01.01 972 2 180 2 848 132 20 6 152 Epartner AS Sandvika 50 % 5 Additions 46 83 397 60 586 Gecko AS Kristiansand 34 % 2 Transfers 27 434 14 (432) (43) 0 ITC DK Denmark 34 % 3 Disposals (99) (344) (151) (594) OptiMail AB Sweden 12 % 12 Acc. depr/write-downs 31.12 (521) (1 364) (791) (2 676) Other owner interests 1 Book value at 31.12.2002 425 989 1 920 97 37 3 468 Book value 150

Depreciation for the year 95 274 84 453 Write-downs for the year 1 16 2 19 Jointly controlled companies PNL Netaxept Zebsign Buypass NITS Medix Useful life 4 - 8 år 4 - 8 år 30 - 40 år Share of operating revenues 372 1 46 7 0 0 Share of operating expenses 393 8 41 22 3 4 NORWAY POST GROUP Share of net financial income 1 1 0 1 0 0 Share of taxes (2) 0 1 0 1 0 Acquisition cost 01.01 972 3 046 2 934 132 20 7 104 Share of net profit/(loss) for the year (18) (6) 4 (14) (4) (4) Additions 46 385 6 397 60 894 Transfers 27 434 14 (432) (43) 0 Share of fixed assets 28 0 22 23 2 0 Disposals (99) (417) (146) (662) Share of current assets 110 0 23 22 0 1 Acc. depr/write-downs 31.12 (521) (1 963) (818) (3 302) Total assets 138 0 45 45 2 1 Book value at 31.12.2002 425 1 485 1 990 97 37 4 034 Share of long-term liabilities 13 0 20 8 3 0 Depreciation for the year 95 476 88 659 Share of current liabilities 121 0 10 23 5 1 Write-downs for the year 1 18 3 22 Total liabilities 134 0 30 31 8 1 Useful life 4 - 8 years 3 - 8 years 25 - 40 years At 31 December 2002 Norway Post owned 50% of the shares in Pan Nordic Logistics AB. The other 50% is owned by Post Denmark.

Ordinary depreciation and write-downs between depreciation for the year in equipment to ErgoGroup with a total for the year in Norway Post, including notes 7 and 8 and the actual depreciation market value of NOK 162 million. See note depreciation on IT development costs in the accounts. This is because the 21. amounts to NOK 480 million, while depre- accounts include a company that was ciation in the group amounts to NOK 903 sold in 2002 and therefore not included in million. Capitalised IT development costs the note. are shown in note 7. There is a difference In 2002, Norway Post transferred EDP

PAGE 48 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 49 Notes

NOTE 10 - INTEREST-FREE LONG-TERM RECEIVABLES NOTE 13 - INTEREST-FREE CURRENT RECEIVABLES

NORWAY POST NORWAY POST GROUP NORWAY POST NORWAY POST GROUP

2000 2001 2002 2002 2001 2000 2000 2001 2002 2002 2001 2000

233 Pension funds 201 1 493 1 885 1 707 Accounts receivable 2 178 2 319 1 831 12 10 12 Receivables from employees 14 12 13 4 3 2 Receivables from employees 6 8 10 37 28 14 Other long-term receivables 21 48 45 20 44 164 Receivables from subsidiaries 49 38 259 Interest-free long-term receivables 236 60 58 47 57 57 Prepaid expenses 136 114 83 46 193 156 Other receivables 206 280 78 See note 2. 1 610 2 182 2 086 Interest-free current receivables 2 526 2 721 2 002

9 11 17 Provision for bad debt 40 36 19 15 4 25 Actual bad debt 30 9 17

Deductions have been made in accounts receivable for provision for bad debt. NOTE 11 - INTEREST-BEARING LONG-TERM RECEIVABLES

NORWAY POST NORWAY POST GROUP

2000 2001 2002 2002 2001 2000

10 Other long-term receivables 58 NOTE 14 - LIQUID ASSETS 106 721 1 174 Loans to subsidiaries 106 721 1 184 Interest-bearing long-term receivables 58 NORWAY POST NORWAY POST GROUP 142 Repayments 2003 194 Repayments 2004 2000 2001 2002 2002 2001 2000 193 Repayments 2005 419 Repayments 2006 60 126 131 Bank/cash deposits 262 334 203 202 Repayments 2007 10 Bonds 8 11 10 24 2007+ 577 594 570 Restricted assets 583 615 610 1 174 Loans to subsidiaries 647 720 701 Liquid assets 853 960 823

A considerable part of cash and cash the group account holder. The bank may equivalents relates to the sales network’s offset withdrawals and deposits so that liquidity requirements. Norway Post’s the net position represents the amount restricted assets are the cash holding outstanding between the bank and the for Postbanken. Remuneration for these account holder. services is included in operating revenues, NOTE 12 - INVENTORIES while interest on the cash holding is For 2001, the group account holding is recorded as financial income. included in Postbanken holding, while the NORWAY POST NORWAY POST GROUP holdings of the individual companies are Norway Post has provided a bank guaran- treated as inter-company with the tee of NOK 350 million as security for parent company. Comparative figures 2000 2001 2002 2002 2001 2000 employees’ withholding tax. have not changed.

56 58 80 Acquisition cost 81 60 60 The group has established a group (9) (9) (16) Write-downs (16) (9) (10) accounts system whereby Norway Post is 47 49 64 Inventories 65 51 50

PAGE 50 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 51 Notes

NOTE 15 - EQUITY NOTE 16 - PROVISIONS

Share Equity Share premium Other Parent Group Group NORWAY POST NORWAY POST GROUP NORWAY POST capital reserve equity company reserve equity 2000 2001 2002 2002 2001 2000 Equity at 01.01.2000 1 515 505 648 2 668 (9) 2 659 325 122 Net pension commitment 141 342 Net profit for the year, parent company after dividend (680) (680) 680 914 578 282 Restructuring commitment 294 578 915 Net profit for the year consolidated after dividend (655) (655) 121 Redundancy payment commitment 121 Translation differences etc. 8 8 3 2 Other commitments 31 77 22 Equity at 31.12.2000 1 515 505 (32) 1 988 24 2 012 1 242 702 403 Provisions 446 796 1 279 Profit for the year, parent company after dividend 161 161 (161) Profit consolidated after dividend 180 180 Translation differences etc. 1 See note 2. Equity at 31.12.2001 1 515 505 129 2 149 43 2 193 Capital contribution 1 545 515 (121) 1 939 1 939 Specifications of restructuring commitments Equity after capital contribution 3 060 1 020 8 4 088 43 4 132 Profit for the year, parent company after dividend (43) (43) 43 2000 2001 2002 2002 2001 2000 Profit consolidated after dividend (110) (110) Translation differences etc. 12 12 154 914 578 Restructuring 01.01 578 915 158 Equity at 31.12.2002 3 060 1 020 (35) 4 045 (12) 4 034 1 000 105 Provision 119 1 000 (240) (336) (401) Accrued expenses (403) (337) (243) 914 578 282 Restructuring 31.12 294 578 915

The minority share of equity at 31 Norway Post took over an estimated NOK res with a nominal value of NOK 1,000. All See note 4. December amounted to NOK 48 million 121 million in redundancy payment com- the company’s shares are owned by the (2002), NOK 35 million (2001) and NOK 25 mitments, which was charged to other government’s Ministry of Transport and million (2000). equity. Communications. Restructuring Norway Post employees, the redundancy This meant that total equity for Norway Provisions at 31 December 2002 amoun- arrangement is valid up to and including When Norway Post became a limited Post amounted to NOK 4,088 million, dis- ted to NOK 282 million, which corresponds 31 December 2004. When Posten Norge company on 1 July 2002, the Government, tributed as follows; with the estimated remaining commit- BA was established in 1996, the govern- represented by the Ministry of Transport Share capital NOK 3,060 million ment. This figure breaks down as follows: ment took on the commitments relating and Communications paid in NOK 2,060 Share premium reserve NOK 1,020 million • Personnel-related measures NOK 187 to redundancy payment for company million, in addition to the equity at 31 Other equity NOK 8 million million employees made redundant. When Norway December 2001. At the same time, Share capital consists of 3,060,000 sha- • Lease rental for vacated premises Post became a limited company on 1 July NOK 95 million 2002, the government decided that the The majority of the payments will be company itself would cover the expenses made in the period 2003 – 2005. relating to redundancies between 1 July 2002 and 31 December 2004. The redun- Redundancy payment dancy payment commitment was unc- Government employees who have been hanged in 2002. made redundant have a right to redun- dancy payment, which is paid for a period until they obtain new employment. For

PAGE 52 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 53 Notes

NOTE 17 - INTEREST-BEARING LONG-TERM AND CURRENT LIABILITIES NOTE 19 - GUARANTEE LIABILITY/MORTGAGES AND SIMILAR COMMITMENTS

NORWAY POST NORWAY POST GROUP Norway Post has provided a parent-com- In addition, the company has provided a NOK 141 million at 31 December 2001. 2000 2001 2002 2002 2001 2000 pany guarantee to Den norske Bank ASA guarantee to Den norske Bank ASA for Some of Norway Post’s loan agreements of 37% of the annual contractual amount loans to employees for the purchase of contain negative pledge clauses and com- 400 481 403 Liabilities to credit institutions 409 490 443 for the provision of IT services. vehicles for use in service. mit the group to maintaining defined The guarantee amounted to NOK 29 milli- At 31 December 2002, loans totalled NOK levels for financial key ratios. The group 193 Currency loans 189 on in 2002. A parent-company guarantee 17.7 million (NOK 31 million in 2001). Norway was well within these limits at year-end 179 167 155 Other long-term liabilities 248 243 260 has also been provided for contracts with Post is also guarantor for the subsidiary 2002. 400 400 Subordinated loans 400 416 Aetat, the Norwegian employment service, Transport Systems International AS for 979 1 048 751 Interest-bearing long-term liabilities 846 1 133 1 119 and the Oslo Kemnerkontoret, as well as a DKK 5 million. further one for rental costs. These gua- 400 Liabilities to credit institutions 6 401 rantees have been provided on behalf of The total guarantee level at 31 December 120 105 68 Other long-term liabilities 118 159 177 ErgoGroup AS. 2002 was NOK 117 million, compared with 400 Subordinated loans 400 920 105 68 Loans maturing after 5 years 124 159 978

57 Repayments 2003 71 14 Repayments 2004 24 594 Repayments 2005 600 9 Repayments 2006 14 9 Repayments 2007 13 68 2007+ 124 751 Long-term liabilities 846 NOTE 20 - RENTAL COMMITMENTS

400 600 300 Loan certificates 300 600 400 NORWAY POST NORWAY POST GROUP 232 Liabilities to credit institutions 4 241 16 400 832 300 Interest-bearing current liabilities 304 841 416 2000 2001 2002 2002 2001 2000 Financial leasing 167 160 152 Book value, buildings 212 223 233 Total unutilised drawing facilities amoun- converted to equity. The average interest subsidiaries. The currency loans are ente- 70 78 86 Accululated depreciation 89 81 73 ted to NOK 1,620 million at 31 December rate was 8.2% up to 30 June 2002. Other red at the current exchange rate in the 174 163 151 Commitments, buildings 217 232 246 2002 and these are valid until 1 December long-term liabilities comprise financial group and at the historic rate of 2005. leasing commitments and will be reduced exchange in the company accounts. as instalments are paid. See note 20. The weighted average interest for total Book value, computer equipment 4 When Norway Post became a limited liabilities was 7.2% in 2002. Commitments, computer equipment 4 company on 1 July 2002, a government Norway Post has taken out currency There were no fixed-interest agreements subordinated loan of NOK 400 million was loans to safeguard investments in foreign at 31 December 2002. Operational leasing 495 518 550 Annual rental costs 682 625 580 100 109 Annual rental costs, vehicles 109 100 Annual rental costs, computer equipment 52 58 39

NOTE 18 - INTEREST-FREE CURRENT LIABILITIES

Number NORWAY POST NORWAY POST GROUP 5 5 5 Financial leasing buildings 31.12 6 6 6 1 228 1 192 1 071 Operational leasing buildings 31.12 1 215 1 258 1 244 2000 2001 2002 2002 2001 2000 4 243 4 348 Operational leasing vehicles 31.12 4 348 4 243

1 479 1 751 1 629 Provision for wages/public fees 1 896 2 002 1 652 194 345 496 Provision for accrued expenses 605 437 222 300 Allocated dividend 1 307 Financial leasing listed in note 17. until 26 June 2004 for entering into new The buildings are classified as buildings individual contracts. The contract for 75 Tax payable 65 41 118 and other real estate, while correspon- Operational leasing each individual vehicle will normally be of 2 381 442 418 Deferred income 445 489 400 ding commitments are classified as inte- Norway Post has signed rental agree- to 5 years’ duration. 569 581 614 Accounts payable 799 799 662 rest-bearing long-term liabilities and are ments for most of its offices. The over- 121 243 215 Debt to subsidiaries included in note 17. view above shows how many buildings are ErgoIntegration AS has a leasing agree- 64 68 27 Other liabilities 120 128 228 rented and related rental costs. ment for computer equipment. The lea- 2 883 3 730 3 399 Interest-free current liabilities 3 931 4 203 3 282 ErgoRunit AS has entered into a leasing sing agreements are valid until 31 agreement for computer equipment, with In June 2001 a new agreement was signed December 2005. For further details regarding tax payable see note 6. the commitments lasting until 31 with LeasePlan Norge AS for the leasing December 2006. The commitments are of delivery vans. The agreement is valid

PAGE 54 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 55 Notes Auditors Report

NOTE 21 - OTHER MATTERS

Disputes 31 December 2002. accordance with the licence. In accordance ESA has considered a complaint regarding There was therefore no unrealised loss or with the licensing terms, the product alleged illegal cross-subsidisation relating gain on any such contracts at 31 accounts for 2002 shall be presented no to transfers from Norway Post’s licensed December 2002. Foreign currency loans later than three months after the financial reserved area to its parcels business. The have been taken out in connection with the accounts for 2002 have been approved. complaint did not contain specific claims acquisition of companies abroad. Norway Post became a limited company on and no provision was therefore made in This will help to neutralise the currency 1 July 2002, with the government repre- the accounts. ESA has now completed its effects of these investments. sented by the Ministry of Transport and investigation into this matter and has fully At 31 December 2002, total interest-bea- Communications as the sole shareholder. In acquitted Norway Post as a result. With ring liabilities in foreign currency amounted this connection, existing paid-in capital in regard to other allegations in the com- to SEK 220 million and DKK 18 million. Norway Post was converted to share capi- plaint, Norway Post has made submissions tal. When Norway Post was established as to the complaint in which it denies that Major transactions a limited company, a subordinated loan of there are grounds for the claim. In 2002, Norway Post sold systems and NOK 400 million from the government was EDP equipment to ErgoGroup with a total converted to equity and an additional Norway Post has received compensation market value of NOK 419 million. NOK 1,660 million was injected as new equi- claims from suppliers of equipment and Agreements relating to the sale were sig- ty. The government budget for 2003 stipu- furnishings. The claims are based on the ned, based on the normal business conditi- lated that Norway Post would have to fact that deliveries to Post Shops have ons with ErgoGroup regarding repurchase make extraordinary payment of NOK 1,475 been lower than originally projected. of services for a three-year period with an million into the Public Service Pension Norway Post is currently in dialogue with a option to extend for one year. See notes 7 Fund. NOK 600 million of the amount will be supplier about the amount of compensati- and 8. compensated by the new equity. on. Norway Post further enhanced its market Den norske Bank ASA Norway Post and Den norske Bank ASA position in Sweden by the acquisition of Until the merger with Den norske Bank have not come to an agreement about the 57% of the shares in CityMail Sweden AB. ASA on 1 December 1999, Postbanken was financial settlement covered by the busi- Norway Post is required to purchase the obliged and had the sole right under the ness agreements between the parties. remaining 43 % from the other two owners Post Bank Act to supply its basic services Norway Post is considering taking the case by the end of the first quarter 2006. through Norway Post's network. After the to arbitration. merger this legally-defined obligation and The Government sole right no longer applied. Financial matters The Government is sole owner of Norway The obligation now lies with Norway Post Norway Post uses financial instruments Post. The Government, represented by the through a separate act and through the for managing exposure relating to Ministry of Transport and Communications, licence, valid until 31 December 2005, which exchange rate fluctuations and changes in granted Norway Post a licence for a more requires Norway Post to offer basic bank energy prices to a limited extent. Various restricted reserved area for letter post up services throughout the company's entire financial instruments are employed in con- to and including 31 December 2005. This sales network. nection with major purchases from foreign also requires Norway Post to provide effi- The sales network is owned and run by suppliers, mainly forward exchange con- cient national distribution of mail and Norway Post. A cooperation agreement has tracts. Options and forward contracts are ensure that the entire population has good been signed with Den norske Bank ASA, employed to manage the price risk for and equal access to the basic services and which gives the bank sole right and obliga- expected future energy consumption. fundamental banking services. tion to offer basic bank services, and Agreements on financial instruments redu- The licence regulations will involve additio- which also relates to the sale of other ce the risk of financial exposure and these nal expense to enable Norway Post to products and services and development of are therefore treated as hedging in the achieve a commercially profitable adapta- the network. The present agreement, a accounts when there is a clear connection tion. Financing of the extra expense invol- continuation of that with Postbanken, runs with underlying assets and liabilities. ved will be covered by any profits from the until 31 December 2005 and is based on Forward contracts and options have been reserved area and government purchasing commercial principles. employed to cover part of energy con- of commercially unprofitable postal servi- sumption. At 31 December 2002, contracts ces. Government purchases in 2002 Post in Shop had been entered into covering 68 % of amounted to NOK 372 million and have In autumn 2000 Norway Post signed a five- the expected consumption in 2003. At 31 been fixed at NOK 305 million in the year agreement with Norgesgruppen ASA December 2002, unrealised gains amoun- government budget for 2003. and AS Norske Shell as principal cooperati- ted to NOK 19.2 million. No further con- The licence conditions also require Norway on partner for the development of the tracts have been entered into in 2003. Post to document that there is no illegal Post in Shop concept. Agreements were Interest-bearing liabilities were loaned at cross-subsidisation between the reserved also signed with Coop and Hakon. There are floating interest rates, which means that area and the services exposed to competi- plans to establish a total of 1,175 outlets in at 31 December 2002 Norway Post was tion. This documentation is submitted to the Post in Shop chain before 31 exposed to interest risk. the Norwegian Post and December 2003. At 31 December 2002 No currency hedging agreements were Telecommunications Authority in the form there were 1,146 outlets. In autumn 2002, entered beyond 2002, which means there of special product accounts. The auditor Post in Shops won the Consumer Prize. were no outstanding hedging amounts at provides annual control statements in

PAGE 56 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 57 Highlights

MAY: Online gaming gets underway after Buypass MARCH: AS, owned by Norway DECEMBER: Avaluation conducted Post and the Norwegian Norway Post takes the by DnB and Price National Lottery, JUNE: initiative in trying to Waterhouse Coopers develops a smart-card To mark the establish- raise the maximum puts Norway Post at solution allowing players ment as a limited com- value for private con- NOK 6.3 billion. This is to register their sports pany on 1 July, signments to Norway. an increase of 31 per- and lottery coupons Parliament decides to The company wants to cent on the 2000 valu- directly from their own add a further NOK 1 increase the maximum ation. computer. billion in equity. This value for customs now gives the company SEPTEMBER: clearance of private Norway Post acquires Parliament paves the a total of NOK 2.06 bil- Norway Post launches consignments from 57 percent of CityMail way for new bank coo- lion. eInvoice for companies. abroad from NOK 200 Sweden, enabling it to APRIL: peration, which means NOVEMBER: to 1,000 or more. compete with Sweden Norway Post’s sub- Norway Post can work Norway Post's new A new survey reveals OCTOBER: The quality of letter Post in the most sidiary Wajens acquires with other players as profile programme is that shops that are A customer survey distribution has never The Arbeidslivssenteret attractive sections of Mork & Nohre AS, well as Postbanken. unveiled. Post in Shop outlets confirms that Norway been better. Statistics in Oslo awards Norway the Swedish postal a leader in bulk trans- have reported in- Post’s new sales show 87.9 percent Post the «Dialogbenken market. portation in the Oslo 82,109 vote when The first issue of creased sales. network has been overnight delivery in 2002» prize for its ini- JANUARY: area. Norway Post, VG, Norway Post's new positively received. the third quarter. tiatives in the area of Norway Post decides B and C Post join to Nitimen and the magazine «Oss» is sent SAS Cargo wins the air Customers are increa- inclusive working life. to replace a further become B Economy, Prices for renting P.O. Norwegian F.A. ask to every household. JULY: AUGUST: transport contract singly more satisfied ErgoEphorma will be 40 post offices with while A Post changes boxes go up. Norwegians to choose On 1 July Norway Post Norway Post puts out with Norway Post. with Norway Post’s providing radio, TV and Norway Post sells its 50 Post in Shops. its name to A Priority. the greatest moments Norway Post enters becomes a limited parts of its heavy- offer and services. newspapers with holding in Netaxept, FEBRUARY: Norway Post issues in Norwegian football. into an agreement for company. goods transport in the It is decided to results and forecasts which supplies payment ErgoGroup takes over Norway Post reports The EU parliament circular stamps to a more inclusive wor- main postal service to establish Post network Norway Post introdu- during the next electi- solutions. The business IT company Runit with provisional net income adopts a schedule for mark the 100-year On the night of king life. One of the Gjensidige Nor chooses external carriers. The (later renamed ces general goods and ons. agreements between 180 employees and an for 2001 in excess of liberalisation of the EU jubilee of the Thursday 14 May, aims is to reduce sick- ErgoBluegarden’s pay- biggest external carri- Distribution) to freight up to one tonne Norway Post and expected turnover of NOK 314 million from post market, which will Norwegian Football Norway Post and the ness absence by 20 roll and human resour- er is Sognefjord enchance the efficien- in 16 European countri- The new government Netaxept continue. NOK 200 million in ordinary postal business. mean full competition Association. Norwegian Postal and percent over three ces systems for its Spedisjon og Transport cy of operations. es. budget stipulates that 2002. in postal services by Communications Union years. 10,000 employees. AS. Norway Post has to It is decided that The agreement to pur- 2009. New uniforms to be reach an agreement on Norway Post is Asurvey reveals a pay NOK 1.5 billion in Norway Post will have Løvenskiold Vækerø chase of 49.9 percent of worn by sales network the spring wage settle- Arvid Moss is elected Nettlast Helgeland is Norway Post wins a awarded the Consumer rising level of satisfac- pension commitments to reduce expenditure chooses Ergo as a the shares in Linjegods Norway Post acquires employees are intro- ments. This is the first as Norway Post's new sold to Saltens Bilruter furniture delivery con- Prize for its Post in tion among Norway into the Public Service by NOK 1 billion betwe- new IT partner. AS is cancelled. Swedish Expressgods. duced. NAVO tariff agreement. Chairman of the Board. AS. tract with IKEA. Shops. Post's employees. Pension Fund. en 2002 and 2004.

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER

Norway Post decides to The EU adopts a schedule for liberalisation of New uniforms for sales network Using the smart card from Buypass, which Minister of Transport and Norway Post wins a furniture The results of an employee survey show a Increased focus on costs. Norway replace a further 40 post the European post market. The target is full employees are ready. is owned by Norway Post and the Communications Torild Skogsholm is delivery contract with IKEA. rising level of satisfaction among Norway Post Post will have to reduce expenditure offices with 50 Post in competition during 2009. Norwegian National Lottery, players can delighted that Norway Post became employees. by one billion between now and 2004. Shops. now register sports and lottery coupons a limited company on 1 July. directly from their own computer.

PAGE 58 – NORWAY POST ANNUAL REPORT NORWAY POST ANNUAL REPORT - PAGE 59 NORWAY POST 0001 OSLO NORWAY TELEPHONE: + 47 23 14 90 00 TELEFAX: +47 23 14 80 25

CUSTOMER ENQUIRIES: 810 00 710 INTERNET: WWW.POSTEN.NO estad & Co AS estad & Co Production: Corporate Information,Production: Corporate Borud • Printing: Folk Terje Norway Bo Mathisen and • Design: Dinamo PR Photography: Post