I am pleased to report Australia Post earned record full year revenue of $6,989.8 million and a profit before tax of $41.1 million in the 2018/19 year.

Although our profit is down year-on-year, our final results mask some significant achievements and changes in our business.

Our domestic parcel business confirmed Australia Post’s market leadership position, growing at approximately 9.2 per cent, including our StarTrack Road business. This business now contributes almost half of our Group revenues. Pleasingly we achieved our highest growth rates in the last 10 years, as more and more customers choose Australia Post to partner with, to deliver their eCommerce solutions.

Our international parcel business grew 15.7 per cent to $586.1 million, underpinned by the successful consolidation of our global eCommerce business, APG. We bought back in the year the 60 per cent stake in our international commercial arm, to give us important control of this growing business, pleasingly at a price lower than we had sold it for.

And our increasingly important identity and financial services portfolios contributed over $500 million, boosted by the support of our major banking partners, CBA, Westpac and NAB and 71 other financial services institutions who all signed new multiple year Bank@Post agreements. These new agreements will enable critical investment in our Community Post Offices and will protect and ensure that all communities have access to local banking services.

However, our letter business both domestically and internationally declined 8.9 per cent to $2,216.3 million. This business remains very important for Australia Post, to the communities we serve and for supporting the roles of our Community Post Offices and our posties.

Our posties deliver to over 12.1 million homes and businesses across the country, even if they have just one letter or one hundred. There has not been an increase in the last three plus years to the basic postage rate, since then we deliver 822.1 million fewer letters, but to over 700,000 more homes, as Australia’s population continues to grow. The result is we have significantly declined letter revenues, but much greater costs to operate the letter service. As a result, our losses from our letters business in the year were $191.7 million, following a further 8.9 per cent decline in revenue.

Our posties were able to deliver an average of 41.5 per cent of our parcels. This significantly contributed to the over $250 million of efficiency savings we made in the year. Without this, our letter losses would have been greater, as a result the roles of our posties would have increasingly come under threat.

Addressing letter pricing responsibly, along with driving further efficiency savings, is important in the year ahead to ensure we continue to protect our important Community Post Offices and services for the needs of our customers.

Focusing on our customers and improving their service remains an important priority for the business. I am pleased to report that whilst more work is still required, we made significant headway.

We met or surpassed all our community service obligations, including delivering on time and ensuring access to Community Post Offices and post boxes.

Our net promoter score, a measure of customer satisfaction, rose significantly for all our customer groups. Complaints to the Ombudsman were down 30 per cent. We committed more resources to manage customer enquiries efficiently and trained over 20,000 employees in customer service.

We invested over $423.9 million in our operational network in the period, including installing new sorting automation and tracking in Sydney, Melbourne and Canberra, just in time for our record- breaking Christmas 2018 peak. And not least, we continued to focus on giving our customers more choices for deliveries, faster delivery times and new and innovative products.

We have also made a number of investments to support future growth. One of these include constructing the Brisbane Parcels Facility, which when completed will be the largest parcel centre in the Southern Hemisphere and will enable us to process over 40,000 parcels an hour, as we meet the growing demands of eCommerce. Another is the significant investment committed to the rolling out of new technology across our post office network, which will equip them to continue to expand their role in their communities.

As we look forward to the future, we believe it is increasingly important we operate responsibly in consideration to our environment and the role we play in society. I am pleased to share that our Board has endorsed a three-year Corporate Responsibility Plan, which encapsulates this commitment, whilst rising to the increasing needs of our customers and our need to be sustainable.

In the year, we sold our 10.1 per cent stake in Aramex, a Middle East logistics provider, which de-risked our balance sheet and strengthened management’s focus on Australia Post.

Our investments were funded by utilising our cash flows from our business operations and we did not increase bank debt. Pleasingly our cash flow from operating activities grew 26.8 per cent in the year, supporting a stronger closing cash balance even after the significant investments made.

None of our achievements could have been possible without the significant contribution from our people. In the year we launched our new values, Trust, Inclusivity, Empowerment and Safety; they are the TIES that bind us together. A great example of our people living these values, was when last Christmas they pulled together to deliver for our customers through the most challenging weather conditions, from bushfires to floods, Australia Post still came to your home.

The safety of our people remains our biggest priority and although significant effort was made to improve awareness, training, and investing in new delivery vehicles, our injury rate remains at a level we are not comfortable with. With the support of our Board, this will remain an important focus for the years ahead

I would like to thank our many important stakeholders for all that you do to support Australia Post. Thank you to our hardworking Licensed Post Office Partners and Contractor Delivery Teams, for playing such an important role. Thank you to our Board, Executive Team and our employees, for your commitment and hard work. Thank you to our Shareholder, for your support in enabling our business plans. And most importantly, thank you to the people of Australia, our customers, for whom we are here to serve.

Christine Holgate

Group Chief Executive Officer and Managing Director