NZ Post Integrated Report 2016
Delivering on NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach
The sale of Converga for Building underway on a 2016 AUD new parcel facility Year at a glance $75m generated a gain of in Christchurch Completion of a NZD Inbound international parcel volumes including new $43m state-of-the-art freeing up capital funds sorting machines supplied facility for investment by Daifuku BCS grew by for courier nearly million letters We achieved and postal operations processed 15.5% for the two postal 76% in Te Rapa flag referendums diversion of waste the Waikato Operations Centre from landfill
Choice of the Introduced a new range of Paxster parcel delivery as NZ Post’s new electric delivery vehicle, with 500 to be used for the options giving customers combined delivery more choice about where and when they receive their parcels of parcels and mail in larger towns and cities
Nearing In 2015/16 we processed We partnered with the A¯kina Foundation 578m & 65.1m 200,000 items of mail, parcels regional social registered YouShop customers (a drop of 7.7% since 2014/15) (up from 61.2 million the year enterprise hubs 194,000 before, an increase of 6.4%) as at 30 June New Zealand Post is...
Delivering on our customers’ our customers’ expectations aspirations
6what counts our strategy7 CONTENTS
01 Year at a glance 01 09 CEO and Chairman’s message Year at a glance 13 About NZ Post 14 Who we are & What we do 16 Our purpose, strategy and values
19 Our strategy and performance 20 Grow 26 Innovate and serve 34 Lower cost 09 39 Our reporting and approach CEO and Chairman’s message 40 Our capitals 42 Our material matters 44 Our business model
47 Our governance 48 Board of directors Delivering on our trusted performance 52 NZ Post Group leadership team
Foreword 13 CEO and Chairman’s message About NZ Post
As we pass the half-way mark of our advances to $11 million. The bank’s year-end five-year transformation plan the results are set out in our Group Annual Report New Zealand Post Group is in a much that has been published alongside this document. stronger position to withstand and This remainder of this report focuses on the respond positively to the challenges postal services side of the business. faced by our parcels, mail and 19 logistics (postal) and financial services The postal services business made an operating Our strategy and performance (Kiwibank) businesses. loss after tax of $11 million reflecting the ongoing fall in revenue from lower mail volumes. The loss The ongoing effects of digital disruption and would have been greater had it not been for further competition in both markets prompted a reset cost reductions and a 2.9% growth in parcel in our strategic thinking in late 2013 and has led revenue. Parcel volumes grew by 6.4% overall to a range of responses since then. The Group is and international inbound volumes by 15.5%. addressing two unique strategic imperatives: the While margin growth remains difficult in structural decline of our core letters business and challenging market conditions, the parcel trends the opportunity to take Kiwibank to the next stage are pleasing and we are actively pursuing market 39 in its development. opportunities to further grow our parcels business. Our reporting and approach Kiwibank continued to perform well in 2016 and We made good progress during FY 2016 in posted an after tax profit of $130 million, down continuing to implement the large scale slightly on the year before. It grew lending and operational, organisational and asset portfolio advances to customers by 7.0% from $15.6 billion changes we identified at the outset of the to $16.7 billion, and customer deposits by 7.6% transformation plan as necessary parts of our from $13.7 billion to $14.8 billion. It also saw a journey to becoming a profitable modern 47 15% reduction in impairment losses on loans and services business. Our governance
9 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach
From a portfolio perspective, our strategy of As we modernise and increase the services we Times have changed and we must devolve selling non-core assets to free up cash for deliver for our customers, we are also making more accountability and decision-making to investment in our mail and parcels business fundamental changes to both our organisational the front line by giving customer-facing leaders took another significant step with the sale of and operating models. These changes, which we in operations and sales a strong mandate Converga. At the time of writing, the process to began last year, are perhaps the hardest part of and more focused support and tools to build introduce new Crown shareholders in Kiwibank our transformation. We are significantly reducing strong, mutually beneficial relationships with was progressing well and nearing completion. our headcount, resulting in a number of people our customers. It also means we need to shift The arrangement will allow New Zealand Post to leaving the business, and the changes depend on our deeply ingrained habits and beliefs so that repay debt acquired to grow Kiwibank and provide successfully embedding a completely new way we are able to move our story on from being new sources of capital and investment expertise of working. about a declining letters business to a growing for Kiwibank. It also allows New Zealand Post to parcels business that embraces the future and focus on its core packages and parcels business. To be a truly modern services business, we need can respond quickly and confidently to changing This is New Zealand Post’s fourth report applying to instinctively look outwards so that everything customer needs. We have received the first shipment of the 500 we do has the customer in mind. While sounding the International Integrated Reporting Council Paxster electric vehicles that will be used to obvious, it is a different way of operating from We are making good progress towards meeting (IIRC) Integrated Reporting Framework. We were deliver parcels as well as letters to residential the historically more structured and hierarchical these aims. Ultimately, in a highly competitive a participant in the IIRC pilot programme and areas in New Zealand. They are already in New Zealand Post model that has served New marketplace we want to be distinguishable from produced New Zealand’s first integrated report operation in parts of the North Shore, New Zealand’s communities and businesses well for the competition with a reputation for going the in 2013. Plymouth and Oamaru. A brand new integrated 176 years and made us one of this country’s most extra mile for our customers and for being the This year we have made a significant change in parcels and mail hub began operations just recognised and trusted brands. best place to work. focusing our integrated report on the Post part outside Hamilton in July, and building got of the business. By not including Kiwibank/ underway on a purpose-built parcels processing Our focus must necessarily be on maintaining financial services in this report, we aim to and distribution centre at Christchurch Airport. and enhancing shareholder value. That has many remove some of the complexity and provide Another highlight was the introduction of three challenges in our current operating environment greater clarity regarding the Post business Boeing 737-400 freight aircraft into a shared air but it also one with several opportunities available model. To meet our statutory obligations as a network providing services for New Zealand Post, as we reposition our business to one focused on Group, we have produced a separate annual which will carry more parcels, faster and at packages and parcels. Similarly, the financial report covering all parts of the New Zealand less cost. services business, with the introduction of new owners and availability of capital, will now be able Post Group. For our processing operations, we selected new to more actively pursue market opportunities. In summary, we are here to create value for our machines for the Christchurch site that will sort stakeholders, across our six capitals, via our parcels four times faster and more reliably than Both businesses are focussed on continuing to strategy to address our material issues. In an they are now. In addition, we have chosen new transform themselves into much more digitally effort to improve the connectivity of information technology to improve the speed, accuracy and led businesses and, in doing so, improve the contained in the report we have increased the service levels of the letter sorting machines at customer experience and quality of their use of icons and colour-coding (see the glossary our mail processing centres. respective services to the market. on the back cover flap for details), to show how We are continuing to fund new infrastructure and everything is interlinked. technology, and develop new and improved online, At the start of each of the three performance mobile and delivery services for our large sending, chapters, namely Grow, Innovate and Serve, and and receiving customers. We introduced the first Lower Cost the relevant material issues, capitals of several new parcel collection and delivery and stakeholders are identified. The six capitals services into the market to give our customers provide a holistic view of the range of resources more options to ensure they can receive parcels we rely on to run our business and deliver value. the first time, and we’re working closely with large (see pg 40) business customers to develop digital services that will help support their growth.
10 11 NZ Post Integrated Report 2016 About NZ Post
WE WORK CLOSELY WITH POSTAL AND DELIVERY ORGANISATIONS WORLDWIDE TO TRANSPORT MAIL AND PARCELS TO AND FROM NEW ZEALAND.
Delivering on our customers’ aspirations 12 13 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach
WHO WE ARE & WHAT WE DO TOP 6 MATERIAL MATTERS Changing Customer Needs OUR INTEGRATED DELIVERY NETWORK Business Transformation Digitisation Attract, Nurture and Retain Talent Brand and Reputation Competitor Threat
m 5m m 15m 0m
118m 1 1 600 81m m 6 m
33,200 MWh of energy 2,000+ use in buildings vehicles in the 882 ‘retail outlets’ NZ Post fleet 78 000 000 665 76% m 0 5 1. m 170 000 million individual addressed mail (letter and parcel) items 50 000 m 8 000 000 m carried by the network. 1 877 7 8 000 m 6 (1.3 billion items when unaddressed mail is included)
14 15 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman NZ Post Our strategy Our reporting Our governance Message and performance and approach
Purpose Nothing gets in the way of delivering what people care about
Strategy
GROW INNOVATE & SERVE LOWER COST Carry more parcels. Improve the way Simplify how we work. we do things. Help our customers find and reach their Deliver different things Get rid of duplication. customers. in different ways. Be a leaner Grow Kiwibank. Give our customers organisation. more choice about where, when and how they do business with us.
Values Do What’s Right One Team Make it Easy Raise the Bar
Is about doing what’s Is about working Is about reducing Is about pushing right by our customers collaboratively across unnecessary complexity, ourselves individually and our people. It and within NZ Post. improving the experience so that collectively we includes confronting It’s about assuming our customers have, succeed. It’s about difficult realities and genuine intent in and constantly looking taking calculated risks, being open about others, being curious to improve the way we having high expectations discussing these, about the business - deliver our solutions of each other, aiming having a solution focus, what we do and how and services. for excellence, and respecting others, we fit together - taking applying the lessons and taking personal pride in each other’s from our mistakes to responsibility for achievements, and continually improve. addressing issues. having each other’s It’s also about being backs. fiscally responsible - don’t just do things the same old way when there’s a better, cheaper and more efficient way of doing them. It’s about being socially responsible, ethical, and sustainable.
16 17 NZ Post Integrated Report 2016 Strategy INNOVATE INNOVATE INNOLOWERVATE LOWER LOWER GROW GROW GR& SERVEOW & SERVE &COST SERVE COST COST OUR STRATEGY AND PERFORMANCE
WE HELP KIWIS TO GET THEIR OVERSEAS ONLINE SHOPPING HOME WITH YOUSHOP.
Delivering on our strategy 18 19 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach INNOVATE LOWER GROW & SERVE COST Integrating our service delivery network
The continuing decline in letter volumes and growth in parcel deliveries has driven a major project to integrate our mail and parcels businesses, with the aim of:
Providing our customers with a seamless, consistent, one-stop mail and parcels service
Eliminating the complexities, inconsistencies Our strategy and performance and duplication of dealing with different services – so, for example, business GROW We’ll be designing and implementing the new customers will have a single point of contact IDA role in the coming year and, as a result of for all services rather than multiple account the pilot, have invested in new electric vehicles managers as they might have now that will be gradually deployed in larger centres Our first strategic goal – Grow – is more relevant and important today than ever. nationwide. Reducing our costs, simplifying our operations In the past 12 months we’ve seized some exciting opportunities to grow our business, and achieving the significant efficiency gains Streamlining, upgrading and always with the aim of delivering more value to our existing customers, enticing and of a ‘one service’ operating structure. automating our processing operations securing new customers and ultimately generating the kind of brand loyalty you just The journey began last year with a restructure can’t buy. In the past couple of years we’ve enhanced our of our provincial sites; each site now has a single mail and parcel processing systems with the leader responsible for all mail and parcels We’ve invested in new people, new infrastructure and new ways of working, and the aim of reducing costs, streamlining operations business, who is supported by an integrated and using technology to provide better service results are beginning to bear fruit. We have a smarter, more streamlined operation administration and support team. In 2015/16 to our customers. The improvements have and we’re making it easier and more enjoyable for our customers to do business with we continued this consolidation, blending the been particularly important for business us – a combination that provides a strong launch-pad for growth in customer numbers, mail and parcels senior leadership roles at the customers who use our mail and direct mail customer satisfaction and the profitability of our business. corporate level and making great progress in services (personalising, printing, addressing and physically co-locating our mail and parcels teams. distribution), who have stringent requirements for data integrity, accuracy and production security. Our Expertise Execution of business transformation. Integrating our delivery services Brand and reputation. In June we completed our new Waikato elationships Global marketplace. In 2014/15 we piloted the use of four-wheeled Our R Ethical and transparent governance. Operations Centre at Te Rapa, and in March electric vehicles for delivering mail and parcels Individualism and value-based started the construction of our new Southern Capitals to residences in New Plymouth. matters
decision-making. Material Operations Centre at Christchurch International Airport. When it’s complete the Southern Our Net w The pilot demonstrated the feasibility and value Operations Centre – a purpose-designed parcel- of combining the postie and courier positions in “NZ Post’s identity and which markets distribution hub – will feature the latest in sorting onment a single integrated delivery agent (IDA) role in it wants to be in are central to its and dispatching technology. or k transformation and purpose” primarily residential areas. It also highlighted a s Jonathan Court, Key Customer Manager, Z Energy new service opportunity: with less mail being left For our customers there will be faster, more Our Envi r in letterboxes and more parcels delivered to front accurate processing, increased security and “NZ Post should take a long-term view doors, IDAs can be ambassadors for our brand –
view better track’n’trace visibility, and for the delivery on governance beyond the business building closer, stronger customer relationships team it will eliminate time-consuming manual Our Financ transformation. Focusing on what is through face-to-face interactions, and ultimately e coming down the line will be key, with sorting duties, freeing them up to focus on their Peopl Stakeholders growth for our business. customer service roles. es Our a long-term strategy to respond”
Belinda van Eyndhoven, Manager - Projects, Sustainable Business Council
20 21 NZ Post Integrated Report 2016 Case studies
Consolidating our aircraft fleet facilitators such as Entrance8 – which Expanding our parcel collection points Meeting this demand is a huge logistical offers a unique local China presence – we’re challenge; the couple of vans needed in 2013 have Our ability to transport mail and parcels around helping Kiwi businesses to access the vast New Zealand Post’s drive to give customers become more than 300 today. And that demand is New Zealand was boosted in 2015/16 with the opportunities of this $210 billion market (see more choice on when and where they collect increasing daily, with Food Bag weekly deliveries introduction of three Boeing 737-400 freighter the Entrance8 case study for more on this). their parcels has led to an innovative partnership continuing to grow at a rapid pace. aircraft as part of a new shared air network. with Countdown. The new aircraft, which are faster, have more We expect continued growth in all these areas capacity and are more reliable than their ageing in 2016/17. We’ve recently appointed a dedicated Initially piloted at 11 Countdown supermarkets predecessors (a 737-300 freighter, two Fokker representative in Europe and will be putting a in Auckland, the partnership enables customers F27 Friendships and three Metroliners), have lot of effort into the US. These are both tough to redirect their parcels (at no extra cost) to their reduced our costs and enabled a rapid, reliable, markets to crack, but they offer huge potential nearest store. Email notifications let them know overnight delivery service – all good news for for agile, cost-competitive and connected when their parcels have arrived, and they have our customers. businesses like ours. 10 days to collect them – giving them plenty of time to take advantage of the store's generous The first aircraft started service in December 2015 We’re also expanding into new China marketplaces, opening hours and ample parking space. and all three became operational by August 2016. such as ecommerce giant JD.com, Kaola and Baby Tree, and have dedicated support in Asia The service has proved a popular option for Growing our international market to help us build relationships with existing our customers: more than 5,000 parcels were and prospective Chinese and Southeast Asian collected from Countdown during the six-month On the international scene, we continue to grow customers. And back at home, we continue to pilot. It’s worked for Countdown too, which our presence in the logistics space, with a specific invest in our technology infrastructure to enable has extended the service to 28 more stores focus on Australia and China and more recently more online and real-time transactions. nationwide. We’re now developing similar Fleet numbers doubled to over 300 the United Kingdom, Europe and the United partnerships with other large retailers that by June 2016 States. Our approach is multifaceted: have a nationwide presence, such as Z Energy. Despite the exponential growth and We work closely with postal and delivery challenging delivery environment, organisations worldwide to transport mail operating KPIs have continued to meet and parcels to and from New Zealand. the demanding expectations of both We have a particularly strong partnership My Food Bag and its customers. with Australia Post, through which we offer a single, ‘trans-Tasman’ logistics service; this provides us with a much stronger sales proposition in pursuing new business opportunities at home and abroad
We help Kiwis to get their overseas online shopping home with YouShop – a service that provides delivery addresses in the UK (for shopping across Europe), the US and China from which we ship the goods to New Zealand Delivering the goods
We’re a conduit for New Zealand businesses Back in 2013 a small start-up called My Food Bag wishing to sell their products in China, asked us to deliver its products (freshly prepared which is now the world’s largest parcels ingredients with matching recipes) to locations market by volume. Through partnerships in central Auckland. Little did we know that three with China Post and other delivery agencies, years later our client would have over 40,000 connections to online platforms such as customers subscribing and require us to deliver Alibaba’s Tmall.com, and alliances with – in just two days each week – thousands and thousands of Food Bags to homes nationwide.
22 NZ Post Annual Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Case studies Message and performance and approach
Growing New Zealand’s business Looking ahead with China We have laid the foundations for the In 2015/16: An exciting new partnership is seeing transformation of our business. In the next We delivered more than 95% of all New Zealand Post increase its presence as 12 months we plan to: parcels overnight and standard letters a logistics service provider in the world’s Give our customers more choice in when within three days, and are working to fastest-growing consumer market: China. and how they send, receive and return their keep improving this performance. The partnership, with China trade specialist parcels, for example through ‘premium’ We processed 578 million items of mail, Entrance8, provides us with exclusive access to services that include deliveries after-hours a drop of 7.7% since 2014/15 and down people with local knowledge and connections in and to locations of their choosing from 1.1 billion in 2002. this enormous online and physical marketplace. Take advantage of technology innovations to It brings with it unprecedented opportunities provide real-time, location-specific services We processed 65.1 million parcels in to grow our business in China, whether we’re 2015/16 up from 61.2 million the year helping Kiwi companies to expand their export Set ourselves standards based on the before, an increase of 6.4%. reach or Chinese enterprises to send goods customer experience rather than numbers- quickly and efficiently to New Zealand and based targets Revenue from Pace, our same-day Australia. We’re now piloting a new logistics parcels business, increased by 14.1% service from China to Brazil and hope to open Continue engaging with our people to on last year’s $16.5 million. a China-Europe route in the future. achieve the changes that are so vital to our long-term success. The revenue from international inbound The partnership builds on our reputation as parcels increased by 9% on 2014/15. a reliable and proven provider of logistics services through channels such as China Post. It also enables us to exploit Entrance8’s expertise to develop new marketing opportunities, such as supplying goods to New Zealand, where local Chinese can see Kiwi products for themselves before ordering them online.
We expect our partnership with Entrance8 to deliver strong financial results, with revenue forecast to increase from about $5 million in 2015/16 to $12 million in 12 months’ time.
Partnership with Entrance8 provides access to local knowledge and connections.
Revenue is forecast to double in the next financial year.
25 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach INNOVATE LOWER GROW & SERVE COST Empowering our people to Parcel Redirect, which enables recipients to redirect their parcels to one of our collection deliver service excellence points, which as well as New Zealand Post retailers include a growing number In the past year we’ve developed and made of Countdown stores and Z Energy service progress towards a new organisational model, stations in which our frontline leaders will have greater decision-making responsibilities. They’ll be ParcelPod, which allows recipients to direct supported by a central backbone of services, their parcels to dedicated parcel lockers, with many of the day-to-day systems and then collect them any time. ParcelPods are processes driven by technology rather than people. currently available in Auckland, Hamilton, Tauranga, New Plymouth, Wellington and With access to tools that reduce administration Christchurch. Our strategy and performance time, these leaders will be able to focus on building and growing relationships with Our digital design team also developed a number INNOVATE & SERVE their customers and responding to service of solutions that add value to our customer opportunities. relationships and have commercial potential. These included: Three years ago we identified innovation and service excellence as cornerstones Implementing change on this scale requires of our success as a customer-focused organisation. a major investment in: BringIt, which enables people to use their smartphones to order items from retailers Our people, to ensure they have the confidence Since then we’ve dedicated ourselves to finding new and better ways to meet our and have them delivered across town by and skills to take on their new roles customers’ needs – no small challenge given that they’re looking for speed, control urgent courier and choice in their interactions, technological ingenuity in services and solutions, Our systems, to ensure that our people have and environmental, social and employer responsibility in their suppliers. Change, which enables people moving house the structure and tools to do their jobs well to update their address details in one place online and easily send them to organisations In the past 12 months we’ve invested in all three fronts, and with our people’s support The way we work, to ensure that our people (e.g. a power company) of their choice. have taken some important and rewarding steps. It’s required a whole new way of have workplaces in which they can thrive thinking and some fundamental changes to the way we work, but has brought with it and our business can flourish. much-improved prospects for our organisation as a mail and logistics provider of choice. Championing sustainability at work We’re now well underway with this work, with frontline leaders heavily involved in and beyond shaping their new roles and identifying the Our Expertise Digitisation. As we’ve done for many years, we seek every Changing customer needs. support, tools and processes they need. elationships opportunity to reduce our impacts on the Competitor threat and disruption. Our R environment. Climate change. Introducing service innovations Demographic change. Capitals Our efforts do much more than tick the ‘done matters Material Our commitment to innovation and service that’ box – we help our suppliers and customers Our Net w extended in 2015/16 to developing a range to minimise their impacts too. For example, in of products and services to meet our customers’ 2015/16 we hosted a workshop with key suppliers onment “Customer first and customer led is needs for speed, convenience and flexibility. on ways to work together to identify and reduce
or k a core principle of any successful For example, our parcels business launched our environmental impacts, and ultimately
s organisation” new delivery options to make it easier for people improve our standing among our increasingly
Our Envi r Jonathan Court, Key Customer Manager, Z Energy to pick up their consignments, including: discerning customers.
“Technology is the key to NZ Post’s view Parcel Leave, through which recipients business transformation. It can move Improving our environmental performance Our Financ authorise us to leave parcels at their addresses e the business from where it’s been, eopl when they’re not there to sign for them A highlight of our sustainability programme P to where the world is going” Stakeholders es Our in 2015/16 was the successful pilot of electric Senior Manager, New Zealand Post
26 27 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach
delivery vehicles in New Plymouth. This led to Our carbon emissions increased this year on an We have been a member of the London substantial reductions in greenhouse gas (GHG) absolute (an increase of 8.3%) and intensity per Benchmarking Group (LBG) for over 5 years, emissions and fuel costs; in one month we saw parcel (1.3%) and per letter (5.9%) basis.Three a globally recognised standard designed to GHG emissions in the pilot area reduce by more main factors influenced this increase: determine the real value and impact of corporate than 65% and fuel costs by more than 60%. Our community investment to business and society. GHG performance can only get better as we deploy A change to our organisational boundary the electric vehicles in other parts of New Zealand, (following good practice), which now Ensuring a safe and healthy access the emissions-related benefits of our more incorporates emissions associated with our workforce energy-efficient new aircraft, and undertake other YouShop service (an extra 4,000 tCO2e) fleet-management practices that include: 2015/16 saw a strong continued decline in the An increase in outbound freight (emissions number of workplace injuries requiring treatment Using modern, fuel-efficient vehicles associated with us sending mail items to from medical providers – an impressive 43% countries around the world for our customers) reduction from 508 in 2014/15 to 288 in the past Providing drivers with training in fuel-efficient 12 months. driving practices An increase in the amount of electricity used to heat and cool our buildings. This is a real credit to our managers and their Introducing energy standards for heavy teams, who are determined to reach our target of vehicles and specifying age limits for vans The last two increases are disappointing and plans are in place to address them in the coming year. Pleasingly, zero harm. In the Auckland area, 12 out of 16 mail Ensuring the freight network is appropriate we did see a reduction in carbon emissions in key focus delivery branches went 12 months injury free, a for the load it’s expected to carry, taking full areas: fuel use in our vehicle fleet; domestic air freight significant achievement given the daily risks of advantage of the latest high-productivity (both of which indicate we are moving items more accident to our delivery agents. vehicle dimension rules. efficiently in the network); corporate air travel; natural Our commitment to health and safety extends gas use and waste/recycling. Other environmental sustainability initiatives beyond our employees to include contractors, during 2015/16 included: Awards and certification suppliers, customers and members of the public, and we are conscious of the potential risks of our Continuing a focus on waste prevention (our Official recognition of our efforts in the activities to the community. To ensure compliance current recycling rate is 76% against a target sustainability space during 2015/16 included: with the new Health and Safety at Work Act of 80%) and developing a Waste Strategy to 2015, we’ve liaised closely with WorkSafe take us through to 2020 A judges’ commendation for our energy New Zealand to check that our systems and management in the 2015 NZI Sustainable processes align with the Act’s intent, and made Continuing a focus on energy efficiency in Business Network Awards sure that our delivery contractors are aware of our buildings including the development of a their new responsibilities. refreshed Energy Strategy and Implementation Enviro-Mark Platinum certification for our Plan to take us through to 2020 mail-house operations. This recognised We have maintained our top-level ‘tertiary’ status our work in identifying, communicating and in ACC’s Workplace Safety Management Practices Partnering with the Packaging Forum to managing health, safety and environmental programme. This recognises that we “operate enable customers to drop off used courier risks in the workplace, and has provided a continuous improvement framework for and postal satchels at recycling collection invaluable evidence to our business customers workplace health and safety management”. points such as The Warehouse, PAK’NSAVE, of our commitment to wellbeing and New World and Countdown stores environmental sustainability We’ve also developed an online learning module that teaches our employees how best to deal with Joining a number of other New Zealand We have been CEMARS (Certified aggressive or abusive customers. organisations in ‘upcycling’ our old postie Emissions Measurement And and corporate uniforms. Reduction Scheme) certified since
2013. CEMARS certification is ISO 14064-1 We also implemented a new reporting approach awarded to companies that actively that enables us to measure GHG emissions on work to understand and improve certifi ed a ‘per parcel’ and ‘per letter’ basis. their environmental impacts. organisation
28 29 NZ Post Integrated Report 2016
Serving our community
New Zealand Post has a long and proud history of contributing to our communities through both our physical presence in PostShops nationwide and specific community initiatives. During 2015/16 these included:
Providing every member of our staff with a paid day off for voluntary work in their communities. The choice of activity is theirs – some choose physical work such as digging walkways and helping out in rest homes, while others contribute their professional skills, such as in providing bookkeeping services for charities
With Kiwibank, supporting the A¯kina Foundation, which helps social enterprises to access funding and support to address and resolve social and environmental issues in their communities (see the case study for more on this)
NZ Post supported the Red Cross’ annual fundraising appeal in March 2016 by distributing donation postcards throughout its store network. We've also continued our support to communities by reaching over 250,000 children through our partnerships with NZ Cricket’s junior cricket programme, Weetbix Kids TRYathlon, Tennis HotShots and Hockey Small Sticks. Over 2,300 not-for- profit groups also received NZ Post’s support through Community Post to help with their community projects. 173 hybrid electric or fully electric vehicles
30 31 NZ Post Integrated Report 2016 Case studies
Looking ahead Trialling electric vans for our delivery network, Incubating innovation Our partnership with A¯kina aligns strongly with and assessing the option of electric cars for our community investment plan, which is all Our focus on ‘innovation and service excellence’ our business fleet What’s the best way to provide a better service to about helping Kiwis to help themselves. will continue in 2016/17 through initiatives our customers? Ask them what they want, We’re now partnering with A¯kina to design, that include: Helping employees to consider commuting of course. establish and support a national network of options such as public transport and carpooling social enterprise hubs, which will enable local Exploring and developing new ways to give That was the premise behind an intensive partners to provide services such as networking our customers choice and control As a Z Energy customer and a foundation weekend workshop held in September 2015, and events, capability-building training, social partner for its new biodiesel production plant where 30 ‘imagineers’ were given the challenge enterprise support and investment brokering. Using technology to improve both the in Wiri, using Z Bio D to power our diesel of developing new, practical solutions to meet customer experience and our operational vehicles (see the case study for more on this). some very real customer needs. The brief: the efficiency solutions had to be new to the market, improve Partnering to reduce emissions the customer experience, be commercially viable, New Zealand Post’s commitment to reducing Strengthening our online presence as a and be able to be implemented rapidly carbon emissions in our heavy vehicle fleet hub for products and services, and providing and cost-effectively. a seamless online and offline customer has taken a new turn through a partnership experience Working day and night, the team clarified the with one of our customers, Z Energy. Environmental Indicators: issues directly with customers and brainstormed, Together with Fonterra, Fulton Hogan and Supporting frontline leaders in their new roles designed, prototyped and evaluated their ideas • Greenhouse gas intensity (gCO2e) Downers, we’re a supporter of Z’s new biodiesel by providing data and market intelligence with before pitching them to decision-makers for per: letter - 66.86; parcel 1053.74 production facility in Wiri, which is planned to which to make more informedmillion decisions for potential implementation. Along the way they their local operations individual addressed mail • Energy intensity: 91 kWh/m²-yearmillion open by the end of 2016. The first industrial-scale million 2 learned about the importance of listening individual addressed mail(letter and parcel) items million plant of its type in New Zealand, it will produce 643 2• Waste Index:Delivery 2.14 kg/m²-year points to customers, the value of collaboration, 643Developing(letter toolsand parcel) and templates itemscarried byto speedthe network. up Delivery points about 20 million litres of biodiesel per annum carried by the network. • Recycling Rate: 76%. and the need to accept failure as a key part key(1.3 business billion processes,items when ensure unaddressed consistency mail is included) from tallow – a by-product of the meat industry (1.3 billion items when unaddressed mail is included) of the journey to success. The result: some that has a lower carbon footprint than pure diesel. and eliminate the risks of errors and impressive new ideas (of which one has since incomplete information been piloted) and 30 inspired, motivated and We’re looking forward to using the new fuel, customer-focused imagineers. Maintaining2,665 tonnes our of drive waste towards but 7 zero6 harm% in 1,877 called Z Bio D, to reduce our vehicle emissions 2,665 tonnes of wasteour(2,025 butworkplaces7 tonnes)6% of this sent for recycling 1,877 bicycles and potentially extend our truck engines’ lives, (2,025 tonnes) of this sent for recycling bicycles Helping Kiwis to help themselves as it has better lubricity than ordinary diesel Working with more business customers to and can reduce friction and wear on fuel system identify opportunities to collaborate In 2015/16 New Zealand Post and Kiwibank components. Z Bio D will initially be available in on sustainability programmes marked four years of partnership with the the Auckland, Bay of Plenty and Waikato regions, 78,000,000 A¯kina Foundation (akina.org.nz). and all going well will eventually be available Researching 78,000,000 the use of smart-charging 273 km travelled 273millionelectric bikes at Z service stations and truck stops nationwide. technologykm to reduce travelled the costs and electricindividual bikes addressed mail 2 millionThis government-supported community environmental impacts of charging our 643 (letter and parcel) items Deliveryorganisation points is dedicated to growing carried by the network. new electric delivery vehiclesby road (couriers, trucks etc) (1.3 billion items when unaddressed mail is included) New Zealand’s emerging ‘social enterprises’ – by road (couriers, trucks etc) organisations that use commercial strategies Renewing our sustainability strategy and to drive improvements in social wellbeing setting new targets and actions for reducing and environmental sustainability. A¯kina provides energy consumption and waste to landfill. services ranging from workshops to coaching Compared with ordinary diesel, Z Bio D 2,665 tonnes of waste952, but 831 km walked by Posties 1,877 This includes developing170,000 ‘end of life’ options 76% Woohoo and advice, in turn supporting innovative can reduce carbon emissions by almost 952, 831 km walked by Posties 170,000for obsolete equipment such as delivery bikes (2,025 tonnes) of this sent for recyclingWoohoo bicycles 4% with every fill. 8,000,000 km cycled by Posties practice, helping to create jobs in our regions and and walk bags TON 8,000,000 km cycled by Posties encouraging communities to develop their own TON solutions and build long-term resilience. Biodiesel burns more cleanly than Collaboratingof letters and with parcels our outbound carried freightby the network ordinary diesel, with lower impacts of letters and parcelsservice carried providers by the on carbonnetwork reduction 78,000,000 on air pollution. initiatives 273 km travelled electric bikes
248by road (couriers, trucks etc) 248Alternative fuel 32 882 Alternative fuel 33 882 ‘retail outlets’ electric vechicles ‘retail outlets’ electric vechicles 952, 831 km walked by Posties 170,000 Woohoo TON 8,000,000 km cycled by Posties 2000+ of letters and parcels carried by the network 2000+ vehicles in the NZ Post fleet vehicles in the NZ Post fleet
33,208 MwH of energy use in buildings 33,208 MwH of energy use in buildings 248 882 Alternative fuel ‘retail outlets’ electric vechicles
2000+ employees 6,389vehicles in the6,389 NZ Post fleet employees 27.1million 33,208 MwH of energy use in buildings 27.1milliontransactions (in the M&L network) transactions (in the M&L network) 121,600 121,600 tonnes of CO2 e tonnes of CO2 e 6,389 employees 27.1million transactions (in the M&L network) 121,600 tonnes of CO2 e NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach INNOVATE LOWER GROW & SERVE COST Simplifying the way we work Initiatives that have helped or will help us to reduce our costs (as well as improve the customer In 2015/16, our drive to simplify the way we experience) include: work included: Integrating our mail and parcels network Uniting previously separate teams around and service delivery roles, senior leadership a shared goal of improving the customer roles and physical locations experience. The new model consolidates our customer engagement channels (call centre, Developing new parcel delivery options for sales and marketing team, product and service our customers (see page 27) developers, and franchises and agencies) and integrates our domestic and international Investing in technology to simplify our operations. This provides a stronger, more administration systems and processes, Our strategy and performance efficient foundation from which to retain including mail and parcel processing LOWER COST existing and attract new customers and distribution
Investing in our in-house talent to develop Consolidating the domestic aircraft fleet that carries our volumes from eight planes to The old adage ‘less is more’ has never been more apt for New Zealand Post, as we strive new, innovative and cost-effective online and digital solutions for our customers three Boeing 737-400s, through a joint venture to provide outstanding service to our customers while keeping vigilant control of the costs between airline service suppliers Airworks of doing so. Trade-offs are inevitable, but they’re far outweighed by the benefits that Investing in technology to develop smarter, Flight Operations and Fieldair Holdings, cost-effectiveness, efficiency and simplicity bring. faster, better ways of working that empower a subsidiary of Freightways. A single aircraft our people and reduce the costs and risks of type and a shared network gives lower In the past few years we’ve gradually streamlined and reshaped our business, so that cumbersome manual processes overhead and maintenance costs, lower today we have a single-minded focus on mail and logistics that’s reflected in our people, fuel costs, greater transport efficiencies, our structure and our day-to-day operations. From this position of strength we’ve spent Exploring shared-service opportunities more rapid recoveries from disruptions and the past 12 months exploring new ways to reduce our costs – of which many have brought for core business functions such as payroll, a faster overnight parcel delivery service. opportunities to improve our customer relationships too. procurement and IT The agreement also includes a controlled cost structure that mitigates the risk of large Investing in GPS and other tracking technology fluctuations in aviation expenditure. to manage our road and air delivery network Ability to attract, nurture and retain talent. in real time. This enables us to monitor and Competition for capital. fine-tune van, truck and aircraft movements Our Expertise Big data. 24 hours a day, and identify and manage Economic wellbeing. issues (and their costs) before they escalate elationships Regulation. Capitals Our R into problems matters Material
Piloting a new business model at our Seaview branch, with the aim of finding Our Net w “The abilities, attributes, attitudes and new ways to meet our customers’ needs for aspirations of our people underpin our convenient, reliable and professional service onment ability to transform in a way that is both while achieving operational efficiencies and or k relevant and sustainable” reducing costs.
s Senior Manager, New Zealand Post Our Envi r “Innovation is in NZ Post’s DNA; there are view Eliminating duplication many examples in the past. And innovation with the workforce plays a big role” During 2015/16 we continued our drive to Our Financ Stakeholders e Matthew McCracken, Corporate Partnerships and eliminate duplication in the way we work,with the eopl P Trust Fundraising Manager, New Zealand Red Cross es Our aims of more consistent customer service, more efficient operations, a reduced risk burden and lower overheads.
34 35 NZ Post Integrated Report 2016 Case studies
Being a modern organisation Looking ahead Expanding our delivery capabilities In 2015/16 we committed to a major investment in mail production, processing machinery, Our efforts to be ‘more modern and responsive’ We’re constantly on the look-out for ways to May 2016 marked the arrival in Auckland of technology and automation that, once fully have at their core our drive to develop strong, streamline our operations and reduce our 50 Paxster AS electric delivery vehicles, all the operational, will transform the way we work. enduring relationships with our customers. operating costs while improving the services we way from Norway. We’ll be able to machine-process mail that’s In 2015/16 they included: provide to our customers. In 2016/17 we plan to: currently processed manually (saving time and These vehicles – which won the Norwegian labour), process mail more quickly, use Moving towards our new organisational model, Continue integrating our mail and logistics Design Council’s Honours Award for Innovation near-real-time data to manage our performance, which includes giving frontline leaders greater businesses so that we offer a single, seamless Excellence in 2013 – are the linchpin in our provide our customers with an even greater levels of freedom to make decisions in the best service to our customers strategy to integrate mail and parcel deliveries assurance of accuracy and security, and give interests of local customers throughout the country. They’re now being posties more time in front of customers. Simplify and standardise our core processes deployed on Auckland’s North Shore, with plans Working with our frontline leaders to identify and services, while providing customers with to import more for use in other centres within the We’ll also have a platform for further the tools and technology they need to greater flexibility in how they interact with us next two years. All in all, a $15 million investment. improvements that will enable us to keep track, analyse and report on their financial costs down in line with lower mail volumes performance, and the administrative support Continue investing in technology that will help Small enough to be used on footpaths and easily and automate our parcel processes too. they need for functions such as payroll us to reduce costs and improve productivity recharged at standard wall sockets, the Paxsters It all adds up to a mail processing system and invoicing can carry mail and parcel loads of 200 kilograms that’s fit for the future. Update and improve our processes for for up to 90 kilometres. They help us to reduce Building the Southern Operations Centre, identifying and reporting on hazards and our impacts on the environment through lower which will reduce our costs through incidents, with a goal of reducing the carbon emissions, enable savings in fuel costs, greater efficiency and faster, more number and costs of workplace accidents and can be recycled easily at the end of their life – automated processes and illnesses. so in addition to delivering a better service to our customers, they help us to be a more responsible Continuing to explore ways to lower our business too. Through our investment in automated running costs by improving the energy mail processing: efficiency of our workplaces, reducing the Modernising our mail operations waste we dispatch to landfill and cutting The proportion of all mail machine- With a modern, efficient domestic the fuel consumption of our vehicle fleet. While the number of letters we process continues sorted will increase from 58% to aircraft fleet we’ve achieved a 2% We’re also taking a whole-of-value-chain to decline, mail is still an important part of our more than 90% saving in fuel consumption. approach by encouraging and supporting business and makes a major contribution to our our customers, suppliers and communities Mail rejection ratesmillion are expected to drop A continuing focus on fuel efficiency bottom line. For this reason it’s vital that we keep individual addressed mail million to do the same. from 13% to 2-3%. 2 in our fleet will reduce our fuel costs investing in our mail processing equipment and 643 (letter and parcel) items Delivery points carried by the network. and lower emissions. operations, to meet our customers’ increasingly stringent and complex needs efficiently and (1.3 billion items when unaddressed mail is included) cost-effectively.
2,665 tonnes of waste but 76% 1,877 million (2,025 tonnes) of this sent for recycling bicycles individual addressed mail 2 million 643 (letter and parcel) items Delivery points carried by the network. (1.3 billion items when unaddressed mail is included) 78,000,000 273 km travelled electric bikes 2,665 tonnes of waste but 76% 1,877 (2,025 tonnes) of this sent for recycling bicycles by road (couriers, trucks etc)
36 37 952, 831 km walked by Posties 78,000,000 170,000 Woohoo km travelled 273 electric bikes TON 8,000,000 km cycled by Posties of letters and parcels carried by the network by road (couriers, trucks etc)
952, 831 km walked by Posties 170,000 Woohoo 248 Alternative fuel 8,000,000 km cycled by Posties 882 TON ‘retail outlets’ electric vechicles of letters and parcels carried by the network
2000+ 248 vehicles in the NZ Post fleet Alternative fuel 882 electric vechicles ‘retail outlets’ 33,208 MwH of energy use in buildings
2000+ vehicles in the NZ Post fleet
33,208 MwH of energy use in buildings 6,389 employees 27.1million transactions (in the M&L network) 121,600 6,389 employees tonnes of CO2 e 27.1million transactions (in the M&L network) 121,600 tonnes of CO2 e NZ Post Integrated Report 2016 Capitals OUR REPORTING AND APPROACH
THIS IS NEW ZEALAND POST'S FORTH INTEGRATED REPORT USING THE INTERNATIONAL INTEGRATED REPORTING, COUNCIL (IIRC) INTEGRATED REPORTING (IR) FRAMEWORK.
Delivering on our customers’ needs 38 39 NZ Post Integrated Report 2016
Our reporting approach Our capitals
This is New Zealand Post’s fourth integrated The six capitals provide a holistic view of the range report using the International Integrated of resources we rely on to run our business and Reporting Council (IIRC) Integrated Reporting deliver value. Similarly, we create a range (IR) Framework. We were a participant in the of different types of value for our stakeholders IIRC pilot programme, producing New Zealand’s such as customer and employee satisfaction. first integrated report in 2013. Our adoption of Here is a summary of what each of the six capitals integrated reporting has been a work in progress; means for NZ Post: each year we have aimed to advance our understanding and application of the framework. Our Relationships – this capital relates Our integrated report is intended to be a to how our relationships and investment succinct communication of the value created for in others, such as customers, partners stakeholders in the short, medium and long term. and community, help us to achieve our strategic goals and create value. This year we have made a significant change in focusing our integrated report on the Post part Our Finances – this relates to our of the business. By not including Kiwibank and financial performance, such as related financial services in this report, we aim profitability, and how this allows us to to remove some of the complexity and provide invest in those things that create value. greater clarity regarding the Post business model. To meet our statutory obligations as a Group, we Our Network – this is our physical have produced a separate annual report covering nationwide network of delivery and all parts of the New Zealand Post Group. distribution facilities, allowing us to do what we do increasingly effectively. In response to feedback, we have also provided more detail on the process used to determine Our Environment – these are the the matters of most importance to our business environmental resources we use every and our stakeholders. We call these our material day, such as fuel for our vehicle fleet matters and have based the structure and content and electricity for our buildings, that in of this report on these priorities. In summary, turn create carbon emissions which we we are here to create value for our stakeholders, strive to minimise. across the six capitals, via our strategy to address the material matters. Our Expertise – this is the unique blend of knowledge, skills and experience In an effort to improve the connectivity of that our people have and how they use information contained in the report, we have it to deliver existing, and develop new, increased the use of icons and colour-coding products and services. (see the glossary on the back cover flap for details), to show how everything is interlinked. Our People – these are our people – At the start of each of the three performance how we recruit and invest in our people, chapters, namely Grow, Innovate and Serve, developing the right culture to succeed. and Lower Cost, the capitals and relevant material matters are identified as well as quotes that represent some stakeholder views.
40 41 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach
Delivering on what counts external stakeholders feel these matters both were important and have a high impact on our 2016 Materiality Matrix Our material matters are those risks business. These six matters are the things that and opportunities that matter most to our shape our current business strategy the most; 5 stakeholders and to our business. however, we will continue to work with all 15 material matters according to their importance. This is the second year that we have engaged Digitisation Changing Customer Needs an external expert to undertake an independent The top six matters identified are: Competitor Threat Business Transformation and Disruption Attract, Nurture and materiality process. The approach drew on Global Marketplace Retain Talent best practice guidance from the International Changing customer needs Brand and Reputation Integrated Reporting Council (IIRC), the Global Reporting Initiative (GRI), the International Digitisation 4 Big Data Organization for Standardization (ISO) and others. Competition for Capital Business transformation It involved a survey, one-on-one interviews and a workshop with our stakeholders. Ability to attract, nurture and retain talent Ethical and Transparent Governance Stakeholder survey Brand and reputation
Economic Wellbeing To ensure that NZ Post understands what is Competitor threat and disruption. 3 Regulation
most important across our business and to Business impact Some stakeholders also highlighted the our stakeholders, a survey was completed by a Demographic Change Individualism balanced and representative sample of 12 internal importance of the health, safety and wellbeing and 11 external stakeholders. Internally, we of our people as a potential material matter. involved leaders from across NZ Post responsible This is already an important area of focus and Climate Change for the six capitals, namely our finances, our activity for NZ Post, with clear targets to improve people, our relationships (customers, community), our performance. However, in response to our network, our environment and our expertise. stakeholder feedback, we will include this in our 2 Externally, we involved those stakeholder groups list of material matters next year. 3 4 5 with which we regularly engage, including the Stakeholder concern Red Cross, the New Zealand Sustainable Business Council, the A¯kina Foundation, a small business owner, the Treasury, BNZ and Z Energy. Stakeholder interviews External stakeholder workshop
Stakeholders were asked to rank 15 material Individual interviews with nine of the internal and five With such a long history and far reach into the matters from 1 to 5, where 1 is not important of the external stakeholders helped us to understand New Zealand community, we touch a wide range to them and 5 is extremely important to them. what the material matters mean to them. Rather of external stakeholders. We were interested A spread of rankings was encouraged, to provide than assuming that we understand why different to hear their views, and in particular generate a clear picture of the relative importance of the stakeholders prioritise particular matters, we explored dynamic discussion and debate on how NZ Post matters. The data from this survey resulted in this with them one-on-one. This resulted in valuable is performing on our material matters. With this the materiality matrix shown, where stakeholder context, which fed into the content for this integrated in mind, we held a workshop with five external concern appears on the horizontal axis and report, as well as into our strategy and initiatives. stakeholders, including the Red Cross, the business impact on the vertical. New Zealand Sustainable Business Council, A¯kina, a small business owner and Z Energy. Material matters prioritisation
Six of the 15 material matters emerged as the most pressing priorities for our business in 2016. They sit in the top right hand corner of the matrix showing that both our internal and
42 43 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach OUR BUSINESS MODEL
NOTHING GETS IN THE WAY OF DELIVERING WHAT PEOPLE CARE ABOUT
OUR RESOURCES AND WHAT WE DO TO CREATE VALUE VALUE CREATED PARTNERSHIPS
Customers will have better visibility of where their item is and when it will be delivered Customers Products and services that are easy for our customers to access and use online and otherwise Community Long-term, valued personalised customer relationships Suppliers S A responsible business in our communities and with our suppliers RELATIONSHIPS HIP EXP NS ER W IO Create T I T a customer - IS N A profitable business that is here for the long term Shareholders O LA E E centric organisation N R R Positive earnings and cashflow Cash flow that understands Grow our digital capability in O G customer needs product and service design Lower our costs to serve our customers Capital V
FINANCIALS Leverage our brand and capability Enhance our R&D capability A Parcels business growth in New Zealand and internationally Build strategic partnerships, Continue to grow our T e.g. NZ Red Cross, customer service focus E Properties A¯kina Foundation Automated network performance management and control
Transport fleet & Buildings that are fit for purpose – the right type of buildings in the best locations
N CUSTOMERS E Online S A delivery network that is as cost-effective as it can be NETWORK Create a customer - and Rationalise our property T
commercial - centric W E portfolio to be fit for E
L culture purpose O
P
R R O
Transport fuels Develop our people to do Develop an integrated K A responsible corporate citizen offering sustainable products and services for our customers E
their jobs well delivery network V
P Reduced carbon emissions per parcel, and $ revenue Building energy use E Implement health, safety Drive lower, more Reduced energy use per m2 of buildings Raw materials for and wellbeing SENDER RECEIVER competitive cost of products and services programme delivery Reduced waste generated ENVIRONMENT
Leverage our balance Minimise our carbon Strong digital capability across our workforce sheet to drive value footprint Digital expertise People with the right skills to perform their roles and achieve our objectives Invest well by managing Create a fuel-efficient People skilled in their roles the decline of mail with transport network Retention of critical skills and experience through effective succession planning Succession plans the growth of parcels EXPERTISE Monitor and reduce energy Enhanced experience for our customers when dealing with us Manage cash flow use in our buildings T F effectively N IN Prevent waste E Employees A M Good employee engagement N N CI O Partnership with unions AL VIR Strong customer-centric culture embedded throughout the organisation S EN Culture, training and development Effective people development and talent management PEOPLE Health, safety and wellbeing programmes LO A healthy, safe and well workforce WER COST
44 45 NZ Post Integrated Report 2016 Directory OUR GOVERNANCE
WE’RE A CONDUIT FOR NEW ZEALAND BUSINESSES WISHING TO SELL THEIR PRODUCTS IN CHINA, WHICH IS NOW THE WORLD’S LARGEST PARCELS MARKET BY VOLUME.
Delivering on our integrated report 2016 46 47 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach BOARD OF DIRECTORS
Hon Sir Michael Cullen Carol Campbell MA, PhD, Chair BCom, CA, CMInstD
Before joining the Post Board, Dr Michael Cullen Carol is a Chartered Accountant and a member was a Member of Parliament. His political career of Chartered Accountants Australia and spanned three decades, much of it in government. New Zealand. Carol is a director of The Business During that time he held a number of portfolios, Advisory Group, a chartered accountancy practice and in particular was the Minister of Finance, and where she advises privately owned businesses. Attorney-General, and was Deputy Prime Minister Prior to that, Carol was a Partner at Ernst for six years. Dr Cullen was also responsible & Young for over 25 years. Carol has extensive for Treaty of Waitangi negotiations and the financial experience and a sound understanding introduction of KiwiSaver. of efficient Board governance.
Prior to entering politics, Dr Cullen gained a Carol holds a number of directorships across a PhD. in Social and Economic History from the broad spectrum of companies, including T & G University of Edinburgh. From 1971 to 1981, Global, NZME, Kiwibank, Kingfish, Barramundi, he was a lecturer at Otago University and was Marlin Global and NPT. Carol is chair of Ronald also a Visiting Fellow at the Australian National McDonald House Charities New Zealand. University from 1975 to 1976.
Jacqueline (Jackie) Lloyd Alan Dunn BA, BCom, Deputy Chair Director
Jackie has an extensive background in private Alan Dunn is a Director of Burger Fuel and public organisations. She is currently a Worldwide Limited and Z Energy Limited until director and trustee of The Lion Foundation and 2007. He spent 30 years with McDonald’s, holding the Wellington Museums Trust, an independent senior international appointments including member of the Wellington Regional Strategy Chairman and CEO of McDonald’s New Zealand, Committee and State Services Commission Audit Vice-President Operations at McDonald’s head and Risk Committee, and a business advisor. office in Chicago, and regional Vice-President and Managing Director of McDonald’s Nordic region Jackie has a strong background in human based in Sweden. resources, management and leadership. She previously served as global human resources In addition to his strong business background, director for the New Zealand Dairy Board and he has contributed to a variety of community and NZMP Fonterra, and subsequently as a consultant education organisations, including as Chairman of and New Zealand country manager the Clean Up NZ Trust, the Auckland University of for Hewitt Associates and The Gallup Organisation. Technology (AUT) Foundation, the AUT School of Jackie is a member of the Human Resources Hotel and Restaurant Studies Advisory Committee Institute of NZ and a Chartered Director of the and the AUT Mao¯ri Scholarship Committee, and Institute of Directors. as a Trustee of Ronald McDonald House Charities. In 2001 he chaired the Government Task Force on Business Compliance Cost.
48 49 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach BOARD OF DIRECTORS
Julia Hoare Richard Ian Leggat BCom, FCA, Director BSc, Director
Julia brings a comprehensive range of Richard brings 30 years experience across commercial, financial, tax, regulatory and manufacturing, sales and marketing, governance sustainability expertise, developed over and financial management in a range of the course of 20 years as a partner with industries, with a particular focus on providing PricewaterhouseCoopers. She retired from the investment advice to institutional clients. PricewaterhouseCoopers partnership at the end For the past three years Richard has been of 2012 to pursue a full time governance career. a full time director with positions on a number of government and sporting organisations. Julia is currently an independent director of Watercare Services, AWF Madison Group, Among his positions Richard is a Director of The a2 Milk Company and Port of Tauranga, as Tourism NZ, Education NZ, and Waterfront well as a member of the National Council of the Auckland, Chair of the NZ Cycle Trail, and Institute of Directors. She is a member of the Director of Cycling NZ and SnowSports NZ. External Reporting Board Advisory Panel, former Chair of the New Zealand Institute of Chartered Accountants' National Tax Committee and former member of the Statutory Panel appointed to review the Emissions Trading Scheme in 2011.
Richard Dellabarca Richie Smith BCom, LLB, MBA, Director MBA, Director
Richard Dellabarca returned to New Zealand in Richie Smith brings with him over 20 years of 2015 after 14 years offshore in a variety of CEO, national and international executive leadership CFO and director positions in private equity backed roles with an extensive background in agriculture. ventures, capital markets, financial services and Previously Richie has served as the Chief technology related opportunities. Prior to this, Executive of companies such as the Farmside Richard was an investment banker, working in Group and GreenFields (CRT). both New Zealand and Australia in mergers and acquisitions and equity capital markets. He currently holds directorships in a number of companies including Hilton Haulage Richard has an MBA from Cambridge University Transport Group, SouthFuels Limited, Timaru and is qualified as a barrister and solicitor, and District Holdings Limited and Nga¯i Tahu chartered accountant. Farming. Previous directorships in a range of industries have included dairy, agriculture, Richard is currently Chief Executive Officer of the telecommunications, technology and New Zealand Venture Investment Fund, and a manufacturing. Richie has also previously held Board member for the New Zealand Rugby Union, a Ministerial appointment to the South Canterbury the NZX listed Wynyard Group, Kea New Zealand District Health Board. and Solvency II Solutions, an insurance software business based in the United Kingdom.
50 51 NZ Post Integrated Report 2016 Year at a glance CEO and Chairman About NZ Post Our strategy Our reporting Our governance Message and performance and approach NZ POST GROUP LEADERSHIP TEAM
Prior to taking up his current position in January 2010 Brian Ashley Smout was appointed to the new position of Group General was a senior partner in PricewaterhouseCoopers. He has an Manager, Operations in November 2010 and is now the Group General extensive background and experience in strategy, transformation Manager, Customer Engagement. and people management. Ashley joined the New Zealand Post Group from Airways Corporation Brian has a Bachelor of Commerce and Administration (Victoria of New Zealand, where he was Chief Executive Officer for eight years. University) and is a Distinguished Alumni Victoria University. Before joining Airways Corporation in 1999, Ashley spent 10 years He is also a Fellow of the New Zealand Institute of Chartered in general management roles with Schneider Electric, including Brian Roche, BCA, FCA Accountants (FCA). positions in Australia and Singapore. He earlier held marketing and Ashley Smout senior operational management roles in New Zealand’s industrial Chief Executive, New Zealand Post Group Group General Manager, manufacturing sector. Customer Engagement
Jo Avenell joined the company in December 2012 and brought with Mark Stewart joined New Zealand Post in 2008 and has held her a wealth of experience designing corporate strategies, leading leadership roles across the business – in the store network, mail cultural change and transformation programmes, developing aligned operations, integration of our parcel (courier) and mail operations, HR strategies, and delivering enhanced employee engagement, and now as COO. productivity and performance. Prior to New Zealand Post, Mark worked in a number of management Jo was most recently General Manager, Human Resources consulting roles, most notably with PA Consulting in London, at Westpac and has held executive and senior HR roles at United Kingdom, where he worked in private and public organisations PricewaterhouseCoopers in New Zealand, and at Ernst & Young Mark Stewart across multiple industries to develop and implement customer Jo Avenell, BCom, ACA and Credit Suisse in both New Zealand and the United Kingdom. and operational strategies to improve business performance. Group General Manager, Customer BSc (Hons), PhD Experience, Brand and People Chief Operating Officer
Janet joined the New Zealand Post Group in May 2013 as strategic David Walsh joined the Group in February 2015 as Chief Financial advisor to the Chief Executive, having previously held a variety of Officer, having previously held the position of General Manager roles in Telecom. Corporate and Finance at KiwiRail after his role as CFO was widened.
Janet has worked in private, SOE and government sectors, predominantly His professional background also includes Chief Operating in the areas of Strategic Planning, Business Performance Management, and Chief Financial Officer at the New Zealand Racing Board, Business/Investment Analysis, Finance and Leadership. and senior finance roles at Fonterra and TransAlta.
Janet Selwood, BA, MBA David Walsh, BCA, CA Group Executive Manager Chief Financial Officer, New Zealand Post Group Malcolm Shaw joined the New Zealand Post Group in 2000, and in his role as Group Manager, Governance & Sustainability, is also Group General Counsel and Company Secretary.
He has an extensive legal background, as Legal Counsel for Contact Energy and Assistant General Counsel for the New Zealand Dairy Board and as a lawyer for a number of firms both here and overseas.
Malcolm is a Barrister and Solicitor of the High Court of New Zealand Malcolm Shaw, LLB (Hons) and is a member of the Institute of Directors. Group Manager, Governance & Sustainability
52 53 2017NZ Post Integrated Report 2016 and beyond
INCREASE REDUCE TOTAL RECORDABLE IMPROVE PRODUCTIVITY INJURY VOLUME PER LABOUR HOUR FREQUENCY CUSTOMER RATE BY 20% ON-BOARDING PER ANNUM GROW NZ POST EBIT FROM EXPERIENCE REDUCE IMPROVE EMPLOYEE IN FY17 ENGAGEMENT $10m CUSTOMER SURVEY SCORE TO FY17: 75% $20m IN FY19 FY18: 76% CHURN FY19: 77%
UNIT COST REDUCED ON STREAMLINE PARCELS, EXCEED BILLING PROCESS MANAGED ON LETTERS REDUCE SERVICE GREENHOUSE GAS EMISSIONS PER PARCEL DELIVERY CHANGE 15% BY 2020, HOLD TARGET CHANNEL MIX TO EMISSIONS PER LETTER TO NO MORE THAN A 10% MORE DIGITAL INCREASE
54 55