WOrld-claSS cOmmuNicaTiONS aNd lOgiSTicS/media/documents/public/annual...service. The operation also offers high-precision logistics solutions such as in-night freight forwarding and

POSTENW O r l d - c l a S S c O m m u N i c a T i O N S a N d l O g i S T i c S

Posten Annual Report 2008

POSTENFÖR KOMMUNIKATIONS- OCH LOGISTIKLÖSNINGAR I VÄRLDSKLASS

Posten Hållbarhetsredovisning 2008

Highlights

POSTENFÖR KOMMUNIKATIONS- OCH LOGISTIKLÖSNINGAR I VÄRLDSKLASS

Posten Årsredovisning 2008

FÖRETAGSHEMLIG

Merger with Post DanmarkOn April 1, 2008 the principal owners of Posten and Post Danmark signed a letter of intent for the merger of Posten AB and Post Danmark A/S. The new company will meet escalating market challenges with increased competitiveness, ensuring conditions favorable to maintaining first-class messaging and parcel service in both countries and enabling us to continue to reach all businesses and households. Read more under Key events after the close of the fiscal year on page 13.

Acquisition of TollpostIn March, Posten acquired DSV Road Holdings’ 50% shareholdings in Tollpost Globe AS, becoming sole owner. The pur-chase price totaled approximately NOK 1,070m. With Tollpost Globe’s strong brand and nation-wide infrastructure in Norway, Posten strengthens its position on the Nordic logistics market.

Posten Logistik expands in FinlandAiming to become a Nordic start-to- finish supplier, Posten Logistik announced in September the establish-ment of the successful MyPack concept in Finland. With nation-wide distribution networks in Norway and Finland, the logistics operations offer a unique com-petitive advantage in the battle for the expanding distance trade.

Lars G Nordström new President and Group CEOLars G Nordström succeeded Erik Olsson as President and Group CEO on June 27. At a Posten AB (publ) extraordinary general meeting on August 6, Lars G Nordström was elected to the Board of Directors.

Cashier Service closedThe Cashier Service was closed as planned during 2008. In accordance with a 2007 parlia-mentary decision, public requirements for financial transaction services will be met by other market players starting in 2009. Read more on page 24.

For fiscal 2008, Posten is publishing this annual report and a sustainabil-ity report. The reports are available at www.posten.se, where you can also obtain up-to-date and in-depth information about Posten.

Consolidated financial review 2008The consolidated financial review comprises pages II–IV, 1 and 4–28, as well as the comments provided in connection with the consolidated income statement and balance sheet, statements of cash flows and changes in equity.

Posten Annual Report

f i n a n c i a l r e v i e w I I

Significant events IIGroup review IIIFinancial overview 1

Message from the CEO 2

Strategy and objectives 4 Profitability 6 Confidence 8 Environment and Quality 9 Competitiveness 10 Employees 11Outlook 12Key events after the close of the fiscal year 13Market and Competitors 14Posten Meddelande (Mail) 18Stralfors 20Posten Logistik (Logistics) 22Cashier Service 24Proposed guidelines for determining executive compensation 24Risk management 25Shares and owner 28

Message from the Chairman 30Corporate governance report 31 Board of Directors 32 Executive management 36 Posten’s universal service obligation 38 Internal control 40

CONSOLIDATED FINANCIAL STATEMENTS Index 43 Income statement, with comments 44 Balance sheet, with comments 45 Statements of cash flows,

with comments 46 Changes in equity, with comments 47 Notes, including accounting

principles 48PARENT COMPANY Financial review 75 Proposed appropriation of profits 75 Index, financial statements 76 Income statement 77 Statements of cash flows 77 Balance sheets 78 Changes in equity 79 Notes, including accounting

principles 80 Signatures of the Board and CEO 93

Auditors’ report 94Five-year review 95Quarterly data 95Definitions 96Examples of collaboration with customers 97

= Not included in the formal Annual Report

Every care has been taken in the translation of this annual report. In the event of discrepancies, however, the Swedish original will supersede the English translation.

I I I f i n a n c i a l r e v i e w

Posten Meddelande (Mail)With world-class quality, Posten Meddelande handles over 20 million pieces of mail and provides nation-wide postal service to 4.5 million households and 900,000 businesses each day. With 15,000 mail carriers, 2,500 rural mail carriers, 1,600 partner outlets, 380 business service centers and 2,200 stamp outlets, Posten Meddelande provides the infrastructure for all those wishing to reach Swedish households and businesses by mail. This makes Posten Meddelande a leader on the Swedish messaging market.

In 2008, Posten Meddelande’s earnings totaled SEK 16,574m. To ensure continued competitiveness and fulfill its universal service obligation, Posten Meddelande continuously carries out efficiency measures through-out the entire organization and develops its service offer within areas such as the combination of physical and electronic communication and distance trade.

Posten GroupPosten is a communication and logistics company with approximately 30,000 employees and net sales of nearly SEK 31 billion. Posten AB (publ) is wholly-owned by the Swedish state and is commissioned with improving the value of the state’s equity interest while ensuring letter and parcel distribution throughout the entire country.

With a unique infrastructure and specialized expertise, Posten delivers world-class communication and logistics solutions. Posten develops its operations in close cooperation with its customers, in order to best meet their needs to reach the right recipients, on time, in a sustainable way and at a competitive price – whether by individual letter, electronic mail piece or major logistics solution.

Group review

World-class quality and accessible service for all customers. 20 million deliveries in Sweden and 270,000 parcels in the Nordic region – every weekday.

Posten Logistik (Logistics)Based in Sweden, Posten Logistik is the leader in efficient flows of goods to, from and within the Nordic region. With its own capacity and infrastructure in Sweden, Norway, Denmark, Finland, Germany and the Netherlands, the logistics company handles an average of 270,000 parcels per day.

Posten Logistik increased its net sales to SEK 10,301m in 2008. The increase is attributable to both acquisi-tions and organic growth. Nearly 40% of sales are generated outside of Sweden.

Information logisticsStralfors leads both the Nordic market for information logistics and the European market for printed matter for gaming and pharmaceutical companies. With annual production exceeding 5 billion labels, Stralfors is a significant player on the label market.

Operations were further developed during 2008 and Stralfors’ net sales increased to SEK 3,897m, mainly through growth in information logistics and the graphic operations.

f i n a n c i a l r e v i e w I V

World-class quality and accessible service for all customers. 20 million deliveries in Sweden and 270,000 parcels in the Nordic region – every weekday.

PRODUCTS, CUSTOMERS AND MARKETMore than nine out of ten SEK receipts come from businesses. The largest customers are from the banking and financial sectors, publishing and com-merce. Based on its unique relationship with all households and busi-nesses in Sweden, Posten Meddelande develops delivery services for mail, periodicals and direct mail. In order to meet the increasing demands of businesses and private individuals for reliable and cost-efficient communi-cation services, Posten Meddelande offers services that provide increased freedom of choice and accuracy. With Posten’s partner outlet network, private individuals can choose when they wish to collect or send letters and parcels or buy stamps – in the morning, after work or during the weekend.

net salesshare of the group

operating earningsshare of the group

average number of employees

share of the group

PRODUCTS, CUSTOMERS AND MARKETWith superior, high-quality infrastructure, Posten Logistik offers logistics services with excellent added value to Nordic companies. The standard par-cel, pallet and express services meet stringent demands for timeliness and service. The operation also offers high-precision logistics solutions such as in-night freight forwarding and third-party logistics. Posten Logistik has established 1,200 distribution points in Finland and 600 in Norway under the brand name MyPack. Approximately 58% of Posten Logistik’s sales come from customers in the retail and wholesale industries.




share of the group

net sales

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20082007200620052004

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20082007200620052004

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operating earnings cash flow1)

1) from operating activities

PRODUCTS, CUSTOMERS AND MARKETWith operations in 8 countries, Stralfors is well positioned as Posten’s strategic platform in Europe. Through Stralfors, Nordic companies secure efficient start-to-finish solutions for the transfer of business-critical information. On behalf of its customers, Stralfors reaches a total of 5 million people in the Nordic region each day. Telenor, Telia-Sonera, Nordea, SAS and other major Nordic companies sending personalized information to millions of recipients rely on Stralfors. Customers are often leaders in their fields: banking, IT/telecom, pharmaceuticals, gaming and energy.




share of the group

Post terminals and UDM centers

Stralfors facilities in Europe

Logistics depos/terminals in the Nordic region

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1f i n a n c i a l r e v i e w

Financial overview

• Net sales totaled SEK 30,836m (29 902)

• Operating earnings totaled SEK 1,885m (1 995)

• Strong financial position, equity-assets ratio totaled 42% (37%)

• The Swedish Ministry for Industry, Employment and Communications and the Danish Ministry of Transport announced on February 2, 2009 that the parties had signed the final agreement on the merger of Posten AB and Post Danmark A/S

• Pursuant to the agreement between the Swedish and Danish states on the merger of Posten AB and Post Danmark A/S, there will be no ordinary dividend distributed for 2008. According to the same agreement, Posten AB will pay out an extraordinary dividend of SEK 1,400m to the Swedish state.

key ratios

SEKm, unless otherwise specified 2008 2007 2006

Posten GroupNet sales 30,836 29,902 27,823

Operating earnings 1,885 1,995 1,442

Operating margin, % 6.0 6.6 5.1

Earnings after financial items 2,117 2,184 1,578

Net earnings 1,506 1,564 1,013

Cash flow from operating activities 1,366 2,288 2,602

ROE, % 20 24 19

Equity-assets ratio, % 42 37 33

Cost-revenue ratio, Costs/Revenues, % 94.0 93.4 94.9

Average number of employees 32,286 32,442 32,887

ViP, Employee Satisfaction Index 67 66 64

Sickness Absenteeism as a percentage of work hours, % 5.6 6.5 7.8

CSI, Customer Satisfaction Index 64 63 62

Corporate Image, index 0.3 0.2 0.06

CI, Competitiveness Index 73 72 72

Quality, % 96.0 95.4 95.4

Carbon dioxide, ton/net sales, SEKm 8.89 9.04 9.80

Posten Meddelande (Mail)Net sales 16,574 16,908 16,925



Stralfors1)

Net sales 3,897 3,847 2,124

Operating earnings 11 2 –43

Operating margin, % 0.3 0.1 –2.0

Posten Logistik (Logistics)Net sales 10,301 8,381 7,586



1) Posten’s acquisition of Stralfors excluding amortization of acquired surplus value; see page 21.

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2

Message from the CEO

Posten shows strengththrough the economic downturn

Posten reported good finan-cial results for 2008. Net sales totaled nearly SEK 31b. The logistics and information logistics operations grew organically by 7 and 3 percent,

respectively, while the messaging opera-tion’s net sales decreased by 2 percent. Pos-ten has an extensive infrastructure, entail-ing a high proportion of fixed costs. The operating margin of the messaging opera-tion in particular is squeezed when volumes decline.

The return on equity of 20 (24) percent exceeded our target. Posten’s ongoing effi-ciency measures partially compensated for the rapidly decelerating economy during the late fall. With an equity/assets ratio of 42 percent and strong net cash holdings, we will meet the coming year’s challenges from a position of financial strength.

Posten operates on a market character-ized by tough competition, rapid technolog-ical development and increased demand to provide customers with a competitive offer in all contexts, from price to the environ-

ment. The prerequisites for being the most competitive choice for customers are to be a well-structured, well-managed and profit-able company. Posten is all of these things. We must, however, continue to work hard to maintain this position.

Posten’s strength lies in the fact that the group offers high-quality services that meet a fundamental, business-critical need of companies, public authorities and organiza-tions: the constant need to communicate with customers and to ship goods from one place to another, whether this be receiving delivery from a subcontractor or shipping to their own warehouse, chain of stores or to an end customer.

Private individuals are an important tar-get group, not least as recipients of letters and parcels. By understanding the prefer-ences of private individuals, we help our corporate customers to communicate with them in the ways they prefer. The growing volume of distance trade, both between businesses and private consumers and between private individuals themselves, also gives rise to new communicative needs.

The uncertain and cautiously pessimistic image of the macroeconomic situation was reviewed on an ongoing basis during the year. When we saw the American mortgage loan crisis become a global financial crisis over the course of a few months last fall, we noticed a slackening in both our messaging and logistics volumes. Over 70 percent of Posten’s income is generated on the Swedish market, and growth of the Swedish GNP is important for our development. The most recent forecast issued by the National Insti-tute of Economic Research showed that growth in Sweden slowed to 0.5% in 2008, and that Sweden is expected to enter reces-sion in the near future. This will have a big impact on Posten’s income development in 2009 – particularly within the messaging operations.

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3

Posten shows strengththrough the economic downturn

Long-term profitability is the basis for all enterprises, including Posten. In the pre-vailing economic environment, speed and flexibility are prerequisites for achieving a positive impact on earnings, also in the short-term. We have therefore developed an action program with powerful measures on both the cost and income sides and with an overall positive impact on earnings of approximately SEK 1 billion during 2009. We have already begun implementing these measures, which are also requisites for the attainment of our owner’s profitability requirements and the provision to Swedish households and businesses of access to the postal service mandated by the state.

Posten’s operations face many chal-lenges but also many opportunities. For several years, the messaging operation has been preparing for declining volumes caused by tougher competition from other market players and by substitution. During the past few years, the operation has been buoyed by a strong economy, mitigating the drop-off in volume. We are now facing a different situation. To address it, we are proceeding to optimize the way we handle the volumes delivered to 4.5 million house-holds and 900,000 businesses every week-day, year-round.

The information logistics operation has developed positively. It is important that we act swiftly to seize the potential presented by Stralfors, with respect to its service offer and its competitive platform for growth on both the Nordic market and the deregulated European postal market of the future. Stral-fors’ graphic operations are a competitive component in the group’s offer, though the market is characterized by intense competi-tion and pressure on prices which led us to implement a number of measures in 2008.

Posten Logistik has developed positively since specializing its operations at year-end 2006. Posten Logistik is a strong market

player, with a Nordic start-to-finish offer for all corporate customers requiring efficient logistics solutions to, from and within the Nordic region. Acquisitions in Norway and Finland during the past few years, together with the DPD collaboration, have allowed the operation to compete suc-cessfully with both international and local niche market players operating in the Nor-dics. Measures taken by Posten Logistik under the action program will strengthen its competitiveness and staying power during the recession, which could cause further downward pressure on prices when compe-tition for volume heats up.

I view Posten as a professional business partner. To emphasize this, all of us at Posten must always be customer-oriented, regardless of the position we hold. We also have the task of more clearly demonstrating the added values won by Posten’s custom-ers: world-class quality and access to lead-ing-edge expertise in combined physical and electronic communication, to name just a few. And, since our customers’ letters travel by “public transport” based on the fact that we visit all households and busi-nesses each day throughout the year, we offer a win-win environmental benefit.

The owners’ final go-ahead for the merger of Posten and Post Danmark is very welcome news. This is an historic merger between two national postal companies. The new company provides us with increased competitiveness to meet increas-ing challenges on the messaging and logis-tics markets. It also ensures conditions favorable to maintaining first-class and competitive messaging and parcel services in both countries. The regulatory authori-ties will now begin their examination, and we will begin our work with structuring the new company to bring home the synergy effects and other strategic advantages of the merger.

In sum, I would like to emphasize that Posten is prepared to meet all challenges from a strong financial position and with a strong offer, and with a goal to constantly improve while living up to its universal ser-vice obligation. With Posten’s long history and practice of changing in pace with the needs of society in general and its customers in particular, I promise on behalf of all Pos-ten employees that Posten will continue as an attractive, reliable and competitive com-pany for everyone, in the coming year and into the future.

Lars G NordströmPresident and Group CEO

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4

balanced scorecard2008–2009

measures 2008

results

f i n a n c i a l r e v i e w

Strategy and objectives

VisionPosten delivers world-class communica-tion and logistics solutions to satisfied customers.

MissionPosten’s mission is to connect people and businesses by delivering mail reliably, cost-efficiently and on time. Posten aims to create outstanding value for customers and businesses by combining conven-tional and electronic mail.

ObjectiveTo ensure Posten’s attractiveness to its owners, customers and employees, Posten aims to balance financial and nonfinancial objectives, determined by the Board of the group and based on the aim of developing the group with financial stability, profitability, com-petitiveness, world-class quality and social and environmental responsibil-ity. The owner’s ROE requirements and the equity-assets ratio are determined at the annual general meeting. Other targets are determined by the Board during the annual business planning process.

CommissionPosten’s task is to guarantee the distribution of mail and parcels throughout Sweden while increasing the value of the state’s share in the company. Read more on page 38.

OWNERS

CUSTOMERS

PROCESSES

EMPLOYEES

profitability

Owner requirements

ROE over a business cycle 15%

Equity-assets ratio 30%

• Strengthened cost focus

• Growth in logistics and information logistics

• Increased customer focus

2008

ROE 20%

Equity-assets ratio 42%

confidence

Target 2008 2009

CSI 65 66

Corporate Image 0.30 0.35

• Continued high quality

• Clearer and simpler paths of communication

• Improved handling of complaints

• Internal dialogue

2008

CSI 64

Corporate Image 0.3

during the coming year, Posten will strengthen its position on the communica-tion and logistics markets. This strategy will ensure that targets are met, that the univer-sal service obligation is fulfilled, that syner-gies and business opportunities are realized and that the overall value of the group increases.

Platform for increased competitivenessDue to its focused efforts, Posten has a strong position in a number of strategically important areas.• Withitsfinancialstability,thegrouphas

the capacity to expand into the core business growth markets which meet and correspond to customers’ needs and wishes.

• Withacost-efficientinfrastructurepro-viding world-class delivery quality, the group is well-placed to be an attractive business partner for customers and international market players.

• Withspecializedexpertiseinmessaging,information logistics and logistics, the group is well-placed to, together with its customers, develop the market’s most competitive communication and logis-tics solutions.

• Withthelargestnumberofdistributioncenters in the Nordic region, the group has a cost-efficient and attractive offer for the growing distance trade.

• Throughitslong-rangeenvironmentaleffort integrated throughout the entire operation, the group has reduced its rel-ative environmental impact.

Strategic direct ion

3

3 3

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5

balanced scorecard2008–2009

measures 2008

results

competitiveness

Target 2008 2009

Competitiveness Index (CI) 73 73

• Continued high delivery quality

• Distribution network in Norway and Finland

• Continued service development

2008

Competitiveness Index (CI) 73

environment and quality

Target 2008 2009

Environment – reduce C02 emissions in relation to earnings by 15% by 2006–2010

Quality 96.2% 96.2%

• Transition to green electricity

• Continued focus on quality

• Continuous optimization of transportation

• More letters and parcels by train

2008

Environment –9.3%1)

Quality 96.0%

1) 2006–2008

employees

Target 2008 2009

ViP/VOICE 65 65

Sickness Absenteeism 6.6% 5.4%

• Systematic work on health issues

• Continued service development

• Internal dialogue

2008

ViP 67

Sickness Absenteeism 5.6%


Strategic direct ion• Thankstolong-termeffortsintheareas

of leadership, health and dialogue about the group’s operational conditions, employees are increasingly healthy, com-mitted and motivated.

Strategy for increased competitivenessPosten’s overall strategic direction is to more swiftly adapt and develop its activities in relation to business environment condi-tions. This includes focusing on efficiency, customer orientation and earnings growth.

Increased efficiencyBy increasing efficiency on both the income and cost sides, Posten will improve produc-tivity in all parts of the operation. Priori-tized areas on the cost side deal primarily with increasing flexibility in handling sea-

sonal and business cycle variations. Posten prioritizes cost-efficiency measures that strengthen the group’s competitiveness without lowering its world-class standard of quality. On the income side, Posten can develop its pricing and its follow-up of cus-tomers’ changing needs for different ser-vices.

Increased customer orientationPosten will continue to meet its customers’ demands by closely cooperating with cus-tomers to a greater extent in order to offer services that solve their needs. This includes being at the leading edge of different combi-nations of conventional and electronic mail, more efficient logistics chains and the devel-opment of a complete and attractive service offer for the expanding distance trade.

Earnings growthTo meet the anticipated negative growth in the economy, Posten is working with result-improving measures throughout the entire operation.

At the same time, Posten evaluates new acquisition and collaboration opportunities which can complement and strengthen its nationwide distribution network in Swe-den, its Nordic logistics production capac-ity and Stralfors’ information logistics European platform.

Read more about Posten’s action pro-gram for 2009 on page 7.

Posten’s five areas of objectives

Detailed

information on

Posten’s areas

of objectives

is found on

pages 6–11.

3

3

3

3 = target/owner requirement met

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%

return on equity equity/assets ratio

Posten’s strong financial position and good profitability are fundamental prerequisites for continuing as an attractive business partner, developing and investing in the operations and meeting the owner’s univer-sal mail service and yield requirements.

Posten Group’s financial development 2008Net sales totaled SEK 30,836m (29,902), up 3%. The acquisition of the outstanding 50% in Tollpost Globe AS increased net sales by SEK 1,227m. Excluding Tollpost, other minor acquisitions and divestments of companies and the closure of the Cashier Service during 2008, net sales increased 1%. Posten Logistik, representing one-third of the group’s net sales, had organic growth of 7%, while Stralfors had organic growth of 3%. Posten Meddelande’s weaker sales continued to be attributable to the economic slow-down and to increased com-petition from alternative communication methods and other market players. The positive trend in distance trade continued.

Operating earnings were SEK 1,885m (1,995). Excluding restructuring costs of SEK 163m (453), operating earnings totaled SEK 2,048m (2,448). The drop in

earnings resulted primarily from Posten Meddelande’s weaker operating earnings. Posten Logistik reported improved operat-ing earnings of SEK 142m. In addition, a decrease in certain employee benefit com-mitments, including disability pensions, positively impacted operating earnings by SEK 235m. Productivity was unchanged from the same period last year. Sickness absenteeism decreased by 0.9%, to 5.6% (6.5%).

Net financial items increased by SEK 43m to SEK 232m (189) due mainly to more financial income, including SEK 19m in gains on currency hedge upon the acqui-sition of the remaining 50% of Tollpost Globe AS. Net earnings totaled SEK 1,506m (1,564).

The group’s total effectiveness is mea-sured by dividing operating costs by income. Posten’s Cost/Income ratio was 94.0% (93.4%). The decline was primarily attributable to lower income for Posten Meddelande. Business segments have a high proportion of fixed costs, entailing a longer time to adapt production capacity to declin-ing demand.

Priorities 2009Against the background of financial turbu-lence and a weakening economy, Posten will continue to adjust its costs to a declin-ing demand. At the same time, the finan-cially stable group will strengthen its posi-tion on the Nordic messaging and logistics markets. Posten will also safeguard its uni-versal service obligation and produce short- and long-term profitability with scope to invest and develop cost-efficient communi-cation and logistics solutions.

Efforts commenced in the fall of 2008 to identify further cost-saving possibilities within all parts of the organization. Certain planned measures have been stepped-up while new result-improving measures have been identified. The New Conditions action program will have an overall positive impact on earnings of approximately SEK 1 billion during 2009. The majority of these measures are related to efficiency improve-ments in production and administration.

Return on equity totaled 20% (24%), exceed-ing our owner’s requirements.

The equity/assets ratio totaled 42% (37%). The financial position thus continues to be strong.

profitability confidence environment and quality competitiveness employees


Owner requirementsThe owner’s requirements for return on equity and equity/assets ratio were deter-mined at the 2007 annual general meeting. Requirements are to attain a return on equity of 15% during a business cycle and an equity/assets ratio of 30%. The finan-cial targets are based on the fact that Pos-ten operates on a competitive market, while parts of the operations are run within a universal service obligation framework with price ceiling rules.

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Powerful measures for 2009 The prevailing economic situation brings with it reduced demand and decreased income. At the same time, wage trends mean increased costs. The previously adopted action program for 2008-10 has therefore been updated to ensure that actions already planned and underway pro-

duce results more rapidly. The program has also been supplemented with new measures, chiefly on the cost side. All operations have identified, clarified and quantified internal measures. It is estimated that the action program will have an overall positive impact on earnings of approxi-mately SEK 1 billion during 2009. Our objective

is to meet a changeable market with increased speed and flexibility. The executive manage-ment constantly monitors market develop-ments and the progress of the action program in order to be able to take swift action if the recession deepens.

estimated result improvement – action program for 2009

Increased efficiency• More efficient and flexible production and

standardized system for optimal mail management

• Increased productivity and better cost structure within Stralfors

• Cost-efficiency measures within the logistics operations

• More efficient administration• Improved work environment• Structural measures within Stralfors’

European production capacity

Increased customer orientation • Simplified and more competitive services• Development of Posten’s channels to

strengthen Posten’s meetings with customers

• Nordic logistics offer and customer portals• Simplified administrative routines

Earnings growth• Developed service offer for small and

mid-size businesses• Developed service offer within market

communication• International collaboration• Pricing strategy

examples of measures

Overall action programfor 2009

New measures tobegin during 2009

New measures begunduring the fall of 2008

Previously plannedmeasures within the

framework of the 2008–2010 action

program

200

SEKm

100

700 1,000

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Businesses and authorities purchased communication and logistics services from Posten totaling SEK 29,360m in 2008, con-stituting approximately 95% of the group’s income. Private individuals still make up the largest group of recipients. Whether the customer is a private individual or a com-pany, Posten always delivers world-class communication and logistics solutions.

ObjectivesCustomers’ satisfaction with Posten’s ser-vice, quality and range of services is mea-sured and followed up in a Customer Satis-faction Index (CSI), while general confi-dence is calculated and monitored by Cor-porate Image measurements. The target for 2008 was a CSI of 65 and Corporate Image of 0.30. The target for 2009 is a CSI of 66 and Corporate Image of 0.35.

2008 ResultsSeveral activities were implemented during 2008 to further strengthen Posten’s rela-tionship with its customers. Based on cor-porate customers’ wishes, for example, sim-plified and clarified paths of communica-tion were established, simpler and clearer customer invoices were developed and an improved complaint management system was introduced.

Customer Satisfaction Index, CSIThe 2008 result was a CSI of 64 (63). CSI improved for both Posten Logistik and Posten Meddelande. To a greater extent, customers share a view that administrative routines have been simplified. Corporate customers continue to give high marks for their contacts with Posten’s sales organiza-tion and for delivery quality. CSI among private customers increased from 53 to 60, due chiefly to the fact that they find it easier to determine where they should turn for various postal errands. Private customers also value Posten’s mail carriers, delivery quality and partner outlets.

Posten Logistik’s customers value the reliable delivery quality and the business relationship.

Corporate ImageSince 2003, the positive trend in public atti-tudes toward Posten has been evident. The most recent Corporate Image survey showed that last year’s surge toward the target was not an isolated phenomenon. Corporate Image increased from 0.2 to 0.3. Public confidence in Posten is growing as the pub-lic perceives that the parnter outlet network offers the desired access to postal services.

2009 PrioritiesPosten continuously develops its operation by listening to and continuously measuring

the extent to which its activities meet all customers’ expectations. Posten’s objective is to be the most competitive choice for businesses requiring communication and logistics solutions to, from and within the Nordic region, and that private individuals perceive Posten’s postal service as accessible and reliable. Work to boost confidence in Posten is ongoing and will thus continue through 2009. Posten will take additional steps to further clarify its partner outlet net-work and to develop competitive services in close cooperation with customers.



–0.25

0

0.25

0.50

0.75

1.00

3.532.521.51

Attitude,average

Familiarity with,average

Posten, 2003–2007 =

Posten, 2008 =

Investmentcompanies

Media

Forestry

IT

2003

2004

200520062007

2008ConstructionManufacturing

Pharmaceuticals

Telecom

Energy

Insurance

Banking

Utilities

Trade associations

positioning, industry 2008

Source: Synovate

50

55

60

65

70

75

20082007200620052004

Index

–0.05

0.05

0.15

0.25

0.35

0.45

0.55

0.65

0.75

20082007200620052004

Index

customer satisfaction index (csi) corporate image

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9

Based on its world-class delivery quality and a trustworthy, systematic environmen-tal agenda, Posten provides competitive offers to its customers.

ObjectivesPosten’s environmental objective is a 15% reduction in carbon-dioxide emissions in relation to net sales during the period 2006–10. The quality goal for 2008 was 96.2%, comprising mail pieces delivered on time for priority letters, unaddressed direct mail (UDM) and “DPD Business Parcels 4 PM.” In accordance with the Postal Act, the government requires that at least 85% of the mail pieces stamped for overnight deliv-ery be delivered the following workday. Posten’s quality goal for 2009 is the same as its goal for 2008.

2008 resultsEnvironmentPosten’s carbon-dioxide emissions in rela-tion to net sales totaled 8.89 tons CO2/SEKm (9.04). Carbon-dioxide emissions from fossil fuels totaled 209,000 (213,000) tons. Of this amount, 186,700 (184,100) tons arose from transportation, including business travel. Other emissions arose from electricity use and heating of premises. Due to the fact that the environmental aspect has been integrated into the entire process – from service development to actual delivery – Posten has been able to limit its emissions despite a continued high transportation requirement. Long-range measures that have had a great impact include transport-ing second-class mail by eco-labeled trains, successively upgrading vehicles, more eco-efficient premises, training all chauffeurs in fuel-efficient driving, mandatory environ-mental certification for managers and EPD (environmental product declaration) ser-vices.

During the year, Posten entered into an agreement to use fossil free, eco-labeled electricity in its premises. This has reduced carbon-dioxide emissions by approximately 4,900 tons. In cooperation with customers, Posten Logistik has introduced a project to replace selected road transports with rail transports for both parcels and pallets.

Environmentally licensed operationsStralfors runs four operations that require registration in accordance with the Swedish Environmental Code. Two of the facilities are located in Gothenburg and include Graphics and Labeling operations. Another facility, located in Åstorp, includes Labeling operations. The fourth facility, which pre-viously required a permit but now requires registration, is located in Ljungby and includes Graphic, Information logistics, and Supplies operations.

Pursuant to a new ruling from the County Administrative Board, as of Janu-ary 1, 2008 Posten Post Stamp (Posten’s philatelic arm) no longer runs any opera-tions that require a permit or registration.

Risk of contaminated landThe risk of discharge into soil caused by, for example, oil discharged from Posten’s vehi-cles is duly noted and addressed through preventative measures and security routines at the terminals and parking lots. Vehicles are washed at special facilities to avoid the release of chemicals into soil or water.

QualityOne of Posten’s competitive advantages, valued and increasingly demanded by customers, is its hallmark delivery quality. The group’s collective delivery quality improved, totaling 96.0% (95.4%) in 2008. The quality of parcel and UDM services remained high. Posten’s delivery quality for overnight deliveries surpassed the universal service obligation requirements, reaching 94.9% (94.5%). These results position Posten among the foremost postal com-panies worldwide.

2009 Priorities Posten will continue to develop eco-efficient communication and logistics solutions. This includes cooperating more closely with customers, continuously upgrading to more fuel-efficient vehicles, optimizing fill ratios and implementing energy efficiency mea-sures in its premises. Posten’s priority is ensuring world-class quality while imple-menting the required cost-efficiency mea-sures.




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20082007200620052004

Tons/SEKm

carbon-dioxide emissions/ net sales

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20082007200620052004

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quality1)

1) percentage of mail pieces delivered on time, total

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Posten performs competitiveness measures to illustrate the strengths and weaknesses of Posten and its competitors on different markets.

ObjectivesThe Competitiveness Index (CI) measures the extent to which customers perceive that Posten, as compared to other market play-ers, satisfies its objective of offering high delivery assurance and services that are good value for money and are simple to use. The CI goal for 2008 and 2009 is 73.

2008 ResultsPosten’s competitiveness was stronger in 2008, with a CI of 73 (72). Posten thus attained its goal. This result shows that Pos-ten can hold its own against competitors, chiefly in terms of delivery assurance but also in terms of simplicity. To bolster com-petitiveness and capture cross-border letters and parcels in the Nordic region, Posten Logistik set up MyPack, a network of dis-tribution points, in Finland in 2008. Through this initiative, Posten offers Swed-ish companies trading in Finland the deliv-ery assurance and convenience they enjoy in the Swedish market.

2009 PrioritiesPosten will continue to develop its opera-tions in order to be able to offer world-class services that are simple to use and are good value for money. During 2009, several mea-sures will be implemented to strengthen the group’s profitability, customer orientation and thus its competitiveness. Read more on page 7.



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competitiveness index (ci)1)

1) Value for money/delivery assurance/simplicity

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With more than 30,000 employees at more than 1,000 workplaces in several countries and every Swedish municipality, Posten ful-fills an important employer function with respect to both its employees and the com-munity. Skilled, motivated employees are a prerequisite for good customer relations and a competitive company. Employees are our most important ambassadors, working together to create success for Posten group.

ObjectivesPosten works systematically to reach its objectives of increased commitment and less sickness absenteeism among employees. Posten’s strategy is to focus on three areas: employee citizenship, leadership and health. Employee commitment is measured and was followed up in 2008 through Posten’s employee survey program, ViP. Sickness absenteeism is measured and followed up on an ongoing basis. Beginning in 2009, ViP will be replaced by VOICE. The objective for ViP for 2008 was 65 and for sickness absenteeism 6.6%. The goal for 2009 is to attain a VOICE ratio of 65 points and a maximum sickness absenteeism of 5.4%.

2008 resultsViPViP continued to develop positively during 2008 despite the ongoing change process within Posten. The objective was exceeded with a result of 67 (66), demonstrating that employee commitment is developing in the right direction. One important prerequisite for continued long-term, positive develop-ment is a constant effort to develop Posten’s managers and leaders. A new management support process was prepared during the year, based on evaluating and developing Posten’s more than 1,200 managers. The Internal Dialogue is a key tool for creating a shared view of the conditions for Posten’s operations and for developing a clear cus-tomer focus in all parts of the operations. During 2008, all Posten Logistik’s employees addressed the theme “The Customers and Us,” discussing customer needs and wishes. Posten Meddelande’s theme “The Customer Meeting” focused on how local corporate customers perceive Posten as a supplier. Stralfors, participating for the first time, discussed “How Can We Work Smarter?” and focused on cost-efficiency measures.

Sickness absenteeismPosten’s systematic and concentrated efforts on health issues yielded positive results in the form of dramatically reduced sickness absenteeism. The result for sickness absent-eeism in 2008 was 5.6% (6.5%), signific-antly exceeding the objective. Posten’s efforts to improve employees’ health include enhanced work environment, directed initiatives to reduce long-term dis-abilities and measures to promote healthy lifestyles. Healthier employees mean both an improved quality of life for the individ-ual and cost savings for Posten.

2009 prioritiesWork in the focus areas -- employee citizen-ship, leadership, and health -- will continue in 2009. A new employee survey program with clearer focus on employees and man-agement will be introduced, thereby replac-ing ViP in the balanced scorecard. Based on the result of the 2008 employee survey, Pos-ten will increase its work on issues concern-ing targets and target attainment on the individual level. As the Project for reducing sickness absenteeism was concluded in 2008, health issues will be more proactive.

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vip-index

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20082007200620052004

%

sickness absenteeism1)

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Collective agreementRights of codetermination for Posten employees are based on each country’s labor market legislation and are thus chiefly regulated at the national level. In all subsidiaries and at the group level, Posten cooper-ates and negotiates with union organizations. Collective agreements are signed locally in each country. All employees in Posten’s Swedish com-panies are covered by collective agreements.

Diversity and workplace equalityWithin the framework of Posten’s diversity and workplace equality efforts, local initiatives have been taken to encourage employees of different cul-tural backgrounds to participate in trainee and management develop-ment programs. Thirty-nine percent of Posten’s employees are women. Nearly one-third of all Posten managers are women, and at the executive management level, 20% are women. Of the Board members elected at the annual general meeting, 50% are women and 50% are men.



1) as a percentage of working hours

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Outlook

Posten faces the current serious economic situation in a strong financial position. The steps that have already been taken, together with an action program for 2009, create favorable condi-

tions for handling the challenges and for tak-ing advantage of the opportunities that arise during a recession. Successful implementa-tion of these measures will place Posten in a relatively stronger competitive position when the economy turns upward.

Messaging activities will face increased com-petition both from market players and from electronic substitution, which will result in stagnating mail volumes. Posten Meddelande has hitherto met this trend by making con-tinu ous rationalizations in mail operations. During 2009, the entire production chain will be optimized to ensure that Posten Meddelande continues to offer high-quality, nationwide postal service with satisfactory profitability. Stralfors will continue to develop its position as a Nordic leader in a growing market for information logistics. In light of the EU Commission’s proposed deregulation of the European postal market, Stralfors’ presence in Europe will offer new business opportunities. The logistics opera-tion will continue to strengthen its competi-tiveness and develop its international net-work to position Posten Logistik as the most natural logistics partner in the Nordic region. Accessibility and the broad local presence of Posten’s Swedish partner outlet network, together with Posten Logistik’s distribution points in Norway and Finland, constitute an important part of Posten’s service offer for the growing distance trade.

On February 2, 2009, the Swedish Minis-try of Enterprise, Energy and Communica-tions and the Danish Ministry of Transport announced their signing of the final agree-ment in the merger of Posten AB and Post Danmark A/S. Read more under Key events after the close of the fiscal year on the follow-ing page.

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Key events after the close of the fiscal year

Welcomego-ahead for historic postal merger

The Swedish ministry of Enter-prise, Energy and communica-tions and the danish ministry of Transport announced on February 2, 2009 their signing of the final agreement for the

merger of Posten aB and Post danmark a/S. The next step is formal approval by the danish Parliament’s finance committee and examination of the merger by the applicable competition authorities.

The new company will have annual sales of approximately SEK 45 billion and over 50,000 employees. The Swedish state will own approximately 60 percent of the new company’s equity and the Danish state 40 percent, with votes allocated 50/50 between them. Upon completion of the merger,

Posten will pay out an extraordinary divi-dend of SEK 1,400m to the Swedish state. CVC will not be an owner in the new com-pany, which will be headquartered in Solna.

The letter of intent for the merger of Posten and Post Danmark was signed on April 1, 2008. The merger was approved by the Swedish Parliament on June 18 and by the Danish Parliament on June 12. The primary incentive for the merger is the enhanced competitiveness of the new com-pany in meeting the market’s increasing challenges, thus ensuring conditions favor-able to maintaining a first-class mail and parcel service in both countries and the pos-sibility to continue to reach all businesses and households.

The new company will be organized in a structure with specialized divisions in

accordance with the structure used by Posten since January 1, 2007. The tradi-tional postal operations in each country will be run by business units within a legal framework of national companies. The logistics operations will be gathered in a joint division. Information logistics and Graphics will also be coordinated in the new company. In addition to these four business units, the new company will have group functions and shared service units.

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Markets and competitors

Posten’s business environment – new conditions

Posten’s primary markets are the Swedish messaging mar-ket, the Nordic logistics market and the European market for information logistics. Posten is facing several challenges in the

form of a recession and the structural trans-formation of the communication market due to substitution, tougher competition, the deregulation of European postal markets and increased globalization. additional challenges include environmental issues and changes in customer behavior. anticipating, understanding and managing the driving forces and rapid changes on these markets is a prerequisite for strong competitiveness.

Rapid change in the global economy during 2008The global economy changed dramatically in 2008. The mortgage loan crisis, initially thought to be isolated to the American market, caused growing uncertainty and quickly developed into a global financial crisis. This led to stagnating growth and continuous revisions to growth forecasts. The growth forecast issued by the National Institute of Economic Research was revised in December 2008 to 0.5%, as compared

with 2.7% for 2007. A percentage change of –0.8% is expected in 2009, and 1.6% in 2010.

Technological development drives certain businesses and challenges others Over the past few years, technological development and changing customer re quirements have driven growth in Inter-net-based distance trade and the transition to electronic communication. Swedish com-panies and private individuals use the Inter-net at a much higher rate than the European average. In 2008, distance trade between businesses and private consumers in Swe-den grew by 15% to approximately SEK 25 billion, as compared to SEK 22 billion in 2007. Accord ing to the e-barometer pro-duced by Posten and the Swedish Retail and Wholesale Trade Research Institute, sales over the Internet show continued strong growth. For the first time, e-commerce exceeded SEK 20 billion, representing approximately 4% of the retail trade.

While many businesses and authorities choose to complement their paper-based mailings with electronic communication, Posten’s surveys show that nearly eight of ten businesses state that they do not plan to

solely use electronic mailings since many of their customers want to receive information in a physical format. This is confirmed in private individuals’ responses: eight of ten prefer to receive their bills and statements as physical mail. Despite the relatively strong market position of physical letters, the Boston Consulting Group anticipates annual average letter volume decreases of 2–4% in Europe.

On the advertising market, the high level of Internet use has meant a growth in Inter-net advertising which, according to the forecast of the Institute for Advertising and Media (IRM), grew by over 20% in 2008. Although other forms of media, such as the daily press, TV ads and direct mail, experi-enced lower growth during the same period, forecasts predict that they will account for approximately 55% of the total media spending of SEK 32.8 billions.

Nordics an important marketWith exports accounting for about 50% of GDP and imports for over 40%, Sweden is one of the world’s most internationalized countries.

Trade between the Nordic countries is significant. Norway, Denmark and Finland

Index

Market*

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07060504030201009998979695949392919089888786858483828180

GDP fixed price

Posten

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20082007200620052004

SEKm

■ Distance trade■ Internet related distance trade

growing distance tradedevelopment of gdp and the letter market highlight substitution

Until 2000, letter volumes grew in pace with GDP. Since then, the transition to electronic substitution has broken this trend.

* Since deregulation in 1996, the market has been comprised of the total market shares held by Posten and its competitors.

Source: Posten Source: Posten and HUI (Swedish Retail and Wholesale Trade Research Institute)

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Percent of total exports

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DenmarkSweden

Finland

Norway

Iceland


Demand for Posten’s services fol-lows GDP growth in varying degrees. The challenge during a recession is to manage overcapac-ity and the consequent pressure on prices while, at the same time, customers impose increased demands on their business part-ners to deliver more cost-efficient communication and logistics solu-tions. This means that Posten must constantly develop its skill in adapting production capacity to a fluctuating demand.

Technological advances and new customer behavior have driven development within the growing distance trade and the transition to communication via channels such as e-mail, the Internet and text messaging. The transition from physical distribution to elec-tronic communication is a well-established fact, but the transition may be spurred on by the reces-sion. Posten has developed its strength in being able to offer competitive solutions for those looking to satisfy the recipient’s wishes by, for example, combining electronic and physical message distribution – whether it be invoices, bank account statements or direct mail.

Competition is tough, and both global and Nordic players have positioned themselves throughout the Nordic region. The European postal market is facing deregula-tion and this presents various opportunities for Posten, which has operated in a deregulated market since 1993. Opportunities within the logistics operations include acting as Nordic partner for the increasing number of busi-nesses demanding transport with origin or final destination in the Nordic region and serving as busi-ness partner in the expanding dis-tance trade. Posten has a broad and competitive offer for the increasing share of companies who are looking for greater free-dom of choice in communicating with their customers and who need logistics solutions to, from and within the Nordic region.

Heightened environmental demands from the government and customers and the focus on climate change has been an important force in Posten’s envi-ronmental efforts for many years. In order to act in line with Swe-den’s environmental goals and customers’ wishes, the environ-mental aspect has been integrated for many years into Posten’s oper-ational process – from service development to actual delivery. In close cooperation with its custom-ers, Posten develops eco-efficient communication and logistics solu-tions which limit the environmen-tal impact of both Posten and its customers. Read more about Pos-ten’s environmental efforts on page 9.

Challenges in the operating environment

Forces driving the market

Consequences for Posten’s business

Distance tradeSubstitutionPower of the

recipient

GrowthCompetitionDeregulation

Environment

Macroeconomic trends

Technological development and new

client behavior Internationalization

Environment and energy

are among Sweden’s six most important trading partners. Posten’s surveys show that approximately four of ten Nordic logistics purchasers expect to establish new busi-nesses, either in their home country or another Nordic country. All in all, this means an increased demand on both intra-Nordic and global transports, partnerships and collaborations on an international level. The EU also expects that Sweden will see the most powerful growth in transpor-tation in the Nordic region.

Many large companies, several of which are Posten’s key customers, have in

trade in the nordic region1)

1) share of each Nordic country’s exports going to other Nordic countries

Source: The Nordic Council

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a relatively few years expanded their opera-tions beyond Sweden and the Nordics. Germany and Great Britain are Sweden’s most important trade partners outside the Nordic region in terms of both exports and imports. Germany and the Netherlands are also important transit countries for freight shipped from other countries to Sweden.

At the same time, the national messaging market is characterized by increased demand for cross-border mailings as com-panies centralize all or part of their produc-tion and enveloping of, for example, invoices.

Markets and competitors

Review of markets and competitors

the messaging market

Value of the Swedish communication market SEK 60 billion

Major players in physical mail distribution • Posten Meddelande (Mail)• Posten Norway/Bring Citymail

The physical distribution of messages is a lesser part of the Swedish communica-tion market. This market is characterized both by increasing competition and an increasing share of electronic communication at the expense of physical distribu-tion. Government-owned Posten Norway, through its subsidiary Bring Citymail, is Posten’s primary competitor in physical distribution of both business mail and addressed direct mail. The market for direct mail is a sub-market of the media market. 2009 forecasts for the media market as a whole are negative, which is also expected to apply to the area of direct mail where UDM is estimated to decrease by 4.5% and ADM by 6.5%. Besides Posten Meddelande and Bring City-mail, Svensk Direktrekalm, MTD and around 30 other local postal operators are active in the area of physical distribution.

the logistics market

Value of the Nordic general cargo market SEK 135 billion

Major players on the market• Posten Logistik (Logistics)• Deutsche Bahn/Schenker• Deutsche Post/DHL• DSV• Posten Norway/Bring Logistics• Itella AbP

The Nordic logistics market is worth approximately SEK 700 billion. The general cargo market accounts for around SEK 135 billion of this, SEK 70 billion of which is repre-sented by the parcel, pallet and freight forwarding market. The logistics market is char-acterized by a strong pressure to change. Players active in the Nordics include global groups such as Deutsche Post through DHL and Deutsche Bahn through Schenker, as well as Nordic players Itella and Posten Norway through Bring. The seven largest players have approximately 15% of the total Nordic logistics market. While the global logistics operators have grown organically in the Nordics, the Nordic players have expanded their operations into neighboring countries through strong acquisitions. The trends on the logistics market also go against central purchasing decisions targeted toward several geographical markets. Many logistics purchasers strive to have a few strategic partners with presence in the entire region, to increase cost-efficiency. For the growing distance trade market, Posten has the most distribution points in the Nordic region, but both DHL and Schenker are challengers, particularly in Sweden.

Value of the European market1) SEK 40 billion

Major Nordic players• Stralfors• Itella AbP• Logica

On the European market for information logistics, the main players are interna-tional companies such as graphic operators and IT companies, with businesses in several geographical markets. The European postal companies move their posi-tions forward in pace with a rising interest for electronic communication solu-tions. In the Nordic region, increasingly considered a common market, Stralfors holds a strong position. Its competitors include Finnish Itella, which operates in Sweden, Finland and Denmark and has built a joint company in Norway together with Posten Norway – Itella Information AS. The national markets are dominated by national companies even though the international element is increasing.

the information logistics market

1) Austria, the Baltics, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Great Britain, Hungary, the Netherlands, Norway, Poland, Slovakia, Switzerland, and Sweden

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Industrial combustion

Residences and premises, etc.

Farming

Electricity and heat production

Industrial operations

Other industries

Waste

greenhouse gas emissions in sweden

Environmental and energy issues increasingly important for competitivenessReducing impact on the environment is high on the agenda for both political deci-sion-makers and in the business world. Sweden also has a national environmental target. In late 2009, the United Nation Climate Conference will take place in Copenhagen to discuss and decide on com-mon environmental targets in a binding international climate treaty. Domestic transportation accounts for 32 percent of greenhouse gas emissions in Sweden. The transportation industry is also the sector that is anticipated to increase its emissions.

Source: Swedish Energy Agency

Data and telecom, etc.

Posten Norway/Bring City-mail

Posten

Letters

swedish communica-tion market

distribution

presorted corporate mail in city districts

The following information is based on Posten’s own estimates and/or compilation of public information.

Schenker

DHLBring Logistics

Other

Posten Logistik

DSV

major players on the nordic general cargo market

Read about Posten’s business segments on pages 18–23.

Stralfors

Itella

Other

Logica

major players on the nordic information logistics market

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Posten Meddelande (Mail)

World-class quality and accessibility

Posten meddelande is a leader on the Swedish messaging mar-ket. With its unique relationship with all households and busi-nesses in Sweden, Posten med-delande conveys letters, period-

icals and direct mailings with a focus on accessibility, quality and freedom of choice.

Net sales were down 2%, to SEK 16,574m (16,908). Weaker net sales were attribut-able to lower volumes caused by the eco-nomic slowdown and tougher competition, including accelerating substitution. Direct mail encountered stiffer competition from other market players and media. The year had two more work days than the preced-ing year, which somewhat mitigates the other wise negative volume effects.

Operating earnings totaled SEK 1,118m (1,900). The weaker financial result was

attributable to weaker earnings and to cost increases. A number of rationalization activities were commenced to address the economic slowdown, leading to restructur-ing costs of SEK 347m (114). Transporta-tion costs increased by SEK 148m, mainly due to higher fuel costs. Personnel costs increased by SEK 141m, mainly linked to wage increases.

Reliable distribution network and efficient communication solutionsTo fortify its leading position on the mes-saging market, in 2008 Posten Meddelande developed its services combining physical and electronic messaging and its services for the growing distance trade. This includes economical solutions for private individuals and the efficient conveyance of light goods.

Posten Meddelande offers world-class delivery quality. With mail and rural deliv-ery service and a partner outlet network offering convenience store opening hours, Posten is uniquely able to reach all Swedish households and businesses every weekday throughout the year. Accessibility means that private individuals can choose when they wish to collect or send letters and par-cels or buy stamps – in the morning, after work or during the weekend. More and more people also recognize the advantages of being able to order products on the Inter-net and collect them at a partner outlet, after receiving a text message or notice.

The number of mail pieces distributed at Posten’s 1,600 partner outlets increased by 3%, partly as a result of the growing distance trade. Posten’s surveys show that nearly nine out of ten Swedes think it’s important to receive bills in their mail-boxes, and that nearly four out of five Swedes read the brochures that are sent along with their bills. The advant ages of physical letters make it an important part of communication between businesses and recipients. With sales of SEK 9,786m, the mail business remains Posten Meddelande’s largest business.

Posten’s infrastructure has been expanded over the past decade to guarantee both the fulfillment of the universal service obligation and the successful management of steadily increasing mail volumes that reached a peak in 2000-01. The existing infrastructure signifies that the proportion of fixed costs is too high. Since then, the transition to electronic communication has accelerated and competition from interna-tional players has increased.

Declining mail volumes mean that the unit cost per delivered mail piece increases, reducing profitability. To safeguard contin-ued cost-efficiency and quality, Posten Med-delande has made its operations more efficient through measures including investments to automate a larger portion of its mail sorting.

Posten Meddelande has a strong direct mail offer, which is an effective, precisely

key events

• Expanded service offer• More efficient production organization• Quality a distinct competitive

advantage• Private customers increasingly

satisfied• Increased traffic for satisfied partner

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World-class quality and accessibility


targeted form of market communication. Despite the fact that direct mail has been challenged by other channels and that around 25% of households opt to not receive unaddressed direct mail, it holds a relatively strong position with businesses as a cost-efficient alternative.

Posten Meddelande engages in active dialogue with its customers in order to con-tinue to develop a competitive service port-folio. Posten’s objective is to help its cus-tomers to communicate with their custom-ers securely and efficiently. In many areas, this development is carried out in close cooperation with Stralfors.

Future focusTo meet a weakening economy and declin-ing volumes, Posten Meddelande will con-tinue to make its production and adminis-tration more efficient. Prioritized areas are speed and flexibility in the cost structure. Increased automation and distribution effi-ciency will produce a lower proportion of fixed costs.

Posten Meddelande will also continue to work to simplify and clarify its offer to businesses and private customers. This includes continuing as a competitive busi-ness partner for companies and ensuring the continued improvement of private indi-viduals’ opinions about the partner outlets’ accessibility and service.

posten meddelande (mail), key ratios


Net sales 16,574 16,908 16,925

Mail 9,786 9,968 10,038

Direct mail 2,874 3,011 3,057

Other 3,914 3,929 3,830

Other income 842 839 885



Investments 194 225 353

Number of workdays 252 250 251

Customer Satisfaction Index (CSI) 63 61 62


Employee Satisfaction Index (ViP) 67 65 –

Sickness absenteeism, % 5.9 6.9 –

Priority mail volume, millions of units 1,237 1,312 1,367

Non-priority mail volume, millions of units 1,245 1,256 1,265

UDM volume, millions of units 2,482 2,540 2,527

share of posten’s

net sales

net sales

operating earnings

operating earnings

employees

mail volumes

54% 59% 68%

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Unaddressed direct mailNon-priority mailPriority mail

Andreas FalkenmarkCEO, Posten Meddelande AB

– Posten Meddelande’s strength lies in the fact that we offer our customers effective solutions for sending and receiving mail items, often in combination with digital solutions. Moreover, we do this rapidly, securely and cost-efficiently. Thanks to our unbeatable accessibility, we reach all Swedish households and businesses, five days a week, all year round. In addition, we offer postal service via our partner outlets at times that suit most people. To address increased substitution, we are optimizing our mail management and reviewing costs throughout the entire operation. In this way, Posten Meddelande will continue as an attractive business partner for our customers and maintain its world-class status.

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Stralfors

Freedomof choice strengthens our customers’ communication and competitiveness

Stralfors leads the Nordic market for information logistics. Operating in eight countries, Stralfors also holds a strong position ahead of the deregulation

of the European postal market.

Net sales totaled SEK 3,897m (3,847), up 1%. Excluding acquisition and divestment of operations, sales advanced 3%. New sales for Information Logistics increased by 10%, as a result of Stralfors winning sev-eral major, strategically important contracts as a Nordic start-to-finish supplier. Growth in Graphic Solutions was attributable to acquisitions of graphic companies. The decrease at SPI was to a great extent attrib-utable to the divestment of Lasermax Roll Systems but also to weaker sales in Sup-plies, which shifted its focus to more profit-able segments.

Operating earnings totaled SEK 83m (108), including SEK 69m (59) in capital gains. Earnings were impacted by restruc-turing costs, mainly within Graphic Solu-tions, of SEK 70m (17). Excluding capital gains and restructuring costs, operating earnings improved by SEK 18m. Improved operating earnings resulted mainly from sales growth in the Information Logistics area, while growth in expenditure related to revenue expansion was kept under control.

Increased capacity and focus on several growth marketsStralfors produces one-third of all mailings in the form of invoices, statements, infor-mation to customer club members, etc. from companies to private individuals in the Nordic region. This makes Stralfors the market leader on the growing information logistics market. Stralfors’ customers are major companies who often prefer to have a single supplier offering efficient and unlimited solutions for their customer com-munication (in all Nordic countries). Based in the Nordics and with operations in an additional four European countries, Stral-fors plans further expansion in Europe with the aim of becoming a leading supplier in selected niches. The primary strategy for Europe is, as for the Nordics, to grow with the customers. During the year Stralfors increased its capacity by, among other thing, investment in Tomteboda, one of the largest and most modern printing plants in northern Europe.

Stralfors helps its customers communic-ate with their clients in an appropriate and cost-efficient way. One of Stralfors’ strengths is offering customers freedom to choose between several communication

methods. Customers can choose paper- or card-based solutions, as well as e-mail, text messaging, multi-media messaging or pub-lishing on their own page on the Internet. Customers often choose a combination of communication methods. Thanks to its close collaboration with customers, Stral-fors can also shorten lead-times between decision and implementation, lowering handling charges for the customer. Since products are developed together with cus-tomers, Stralfors ensures that its offer cor-responds to customer demands and wishes. The graphic production solutions offered by Stralfors meet customer needs for qual-ity and cost control.

Handling sensitive business communica-tion, such as invoices, demands the highest level of security. The correct information must reach the intended recipient at the right time, via fast, effective and economical handling. During the year, Stralfors has worked with Posten Meddelande to develop a service concept wherein Stralfors and Posten Meddelande have positioned themselves as a business partner specializ-ing in customer communication adapted to the recipient and smart solutions for physical and electronic communication that help companies increase their efficiency, sales and customer loyalty.

It is increasingly important to develop and strengthen customer relationships. The growing trend is to combine business com-munication with targeted personalized offers and other useful, process printed information. Combining business com-muni cation with marketing messages imposes great demands for fast, cost-effi-cient and high quality technology in both printing and digital printing. Stralfors,

key events

• Continued streamlining – divestment of financial transaction operations

• Investment in additional capacity – acquisition of printing plant in Poland

• Increased capacity through invest-ments in Tomteboda

• Synergies attained within printing operations

• Increased collaboration with Posten Meddelande

• Market communication efforts

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Freedomof choice strengthens our customers’ communication and competitiveness


which this year made major investments in the latest technology, has already delivered several customer orders with this com-bination.

The graphics market has enjoyed stron-ger demand for value-adding products, and Stralfors has focused on growth areas such as security printing, gaming and pharma-ceutical information. With a complete range of various graphic products, including labels meeting the pharmaceutical indus-try’s stringent quality and safety demands, Stralfors holds a strong position in the European pharmaceutical industry.

Future focusDuring 2009, Stralfors will be highly com-petitive thanks to the synergies and expanded capacity created by the integra-tion of Posten’s and Stralfors’ printing oper-ations. At the same time, the rapidly decel-erating economy will reduce demand and increase pressure on prices within all of Stralfors’ lines of business. Increased focus on costs, productivity improvements, streamlining and organizational adjust-ments will be the primary focus. Efforts will continue to strengthen the offer within mar-keting communication, which will provide new business opportunities for the entire group. The aim is to consolidate Stralfors’ strong position in northern Europe and develop its close collaboration with cus-tomers while expanding its customer basis. Stralfors will thereby continue to grow by delivering time- and cost-saving logistics and delivery solutions for information transfer of its customers’ business-critical information, for all technologies and mate-rial.

stralfors, key ratios1)


Net sales 3,897 3,847 3,393

Information Logistics 1,939 1,756 1,342

Graphic Solutions 1,528 1,424 1,287

System- and Product-related Information Transfer, SPI 430 667 764

Other operating income 96 82 31

Operating earnings 83 108 29





Sickness absenteeism, % 4.1 3.8 4.2

1) The difference in operating earnings in the table above and the tables on page 1 and in Note 4 is attributable to the amortization of acquired surplus values on fixed assets of SEK 72m per year. For 2007, the difference also includes a group capital gain of SEK 34m.

investments

13% 1% 7%

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Per SamuelsonCEO, Strålfors AB

– We have motivated employees, satisfied customers and a good product and service portfolio. By prioritizing the right measures that improve productivity and optimize our production capacity, we will emerge from the recession in a strengthened position.

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Posten Logistik (Logistics)

Effective to, from and within the Nordic region

Facing tough international competition, Posten logistik is developing a Nordic logistics offer to strengthen its position as one of the leaders on the Nordic logistics market.

Net sales totaled SEK 10,301m (8,381), up SEK 1,920m (23%). The acquisition of the outstanding 50% of Tollpost Globe AS accounted for SEK 1,227m of the increase, and the acquisition of Suomen Logistiikkat-alo Oy accounted for SEK 124m. Organic growth of 7% was attributable to strong orders from both new and existing custom-ers. Growth was driven by increased sales to retailers and wholesalers, who account for 58% of Posten Logistik’s net sales.

The healthy growth in parcels plateaued successively during the year. The establish-

ment of the MyPack distribution network in Norway and Finland has strengthened Posten Logistik’s opportunities in the grow-ing distance trade sector. The distribution network has made it easier for private indi-viduals in Norway and Finland to buy from companies in the Nordic region, thus boost-ing sales. Parcels from companies in Sweden to companies abroad also reported growth. In the “Other” category, palletized logistics and in-night freight forwarding advanced robustly.

Operating earnings totaled SEK 352m (210), up SEK 142m. Earnings were encum-bered by restructuring costs of SEK 59m (7). The acquisition of the outstanding 50% of Tollpost accounted for SEK 87m, exclud-ing amortization of SEK 35m on acquired surplus values on fixed assets. The earnings trend was positive in all countries, despite the fact that the weakening economy was clearly felt during the end of the year.

Strong Nordic logistics expertOn the Nordic logistics market, character-ized by increased consolidation and squeezed margins, Posten Logistik’s object-ive is to be the natural logistics partner for customers needing logistics solutions to, from and within the Nordic region. Posten Logistik’s surveys show that Nordic logist-ics purchasers view the Nordic region as one market, and that demand for transpor-tation continues to grow, both domestically

within each country and as part of a cross-border Nordic logistics solution. At the same time, competition from large interna-tional logistics operators is increasing. Developing efficient logistics solutions is more and more important for creating value for customers in a time of stronger demands for cost-efficiency. Posten’s sur-veys show that customers choose Posten’s parcel and pallet services for reasons including security, value for money, simplic-ity and high-quality service when collecting and dropping off.

Posten Logistik’s growth strategy includes offering customers flexible, cross-border logistics solutions in the Nordic region and in other parts of the world by combining its nation-wide network in Swe-den with effective production resources in the Nordic region. As the Nordic franchise owner of DPD, Posten Logistik also has access to one of Europe’s largest parcel net-works. Via its own hub in Hamburg and a new terminal in the Netherlands, Posten Logistik has capacity to handle large flows of goods from Europe.

The acquisition of the outstanding shares of Tollpost, the expansion of MyPack in Finland and the winning of large contracts with customers such as Adidas, Volvo, ELFA, Siba and Stadium strength-ened Posten Logistik’s position on the Nor-dic logistics market in 2008. Third-party logistics solutions were also fortified during

key events

• Acquisition of Tollpost in Norway• Establishment of MyPack in Finland• Consolidation of operations in the

Nordic countries• Expanded Nordic logistics offer• New Nordic customer contracts• New terminal in the Netherlands

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23

Effective to, from and within the Nordic region


the year, chiefly on the Finnish and Swedish markets. For distance trade, the MyPack concept, with 1,200 distribution points in Finland and 600 in Norway, allows Posten Logistik to offer start-to-finish solutions, including handling of goods and warehous-ing, distribution to the end customer and managing any complaints.

Future focusWith its solid position in parcels within Sweden, Posten Logistik will continue to develop its Nordic start-to-finish offer and its close, long-term collaboration with cus-tomers. Posten Logistik aims to be the logistics partner that can best contribute to developing the flow of goods for both large and small logistics purchasers, and making these flows more efficient. This includes exploiting opportunities that exist within Posten Group’s overall distance trade offer. Economic trends impact the logistics branch, which was already experiencing squeezed margins and increasing competi-tion in a booming economy. Posten Logistik will work to ensure an efficient and com-petitive capacity while preserving its profit-ability. Posten Logistik will also continue to expand its international network in order to seize growth opportunities presented by the increase in the international flows of goods.

posten logistik (logistics), key ratios


Net sales 10,301 8,381 7,586

Parcels 6,935 5,392 5,094

Other 3,366 2,989 2,492

Other operating income 1,415 1,340 1,276





Customer Satisfaction Index (CSI) 68 67 65


Employee Satisfaction Index (ViP) 67 66 –

Sickness absenteeism, % 5.0 5.6 –

Parcel volume, millions of units 65.6 65.8 62.0

33% 19% 20%

Henrik HöjsgaardCEO, Posten Logistik AB

– Posten Logistik grew strongly during the year, both through the acquisi-tion of Tollpost Globe and organically. We have strengthened our position on the market and have a strong offer for businesses looking for logistics solutions to, from and within the Nordic region. Thanks to the measures we’ve planned for 2009, Posten Logistik is ready to meet the anticipated decrease in demand resulting from the recession and tough competition.

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Cashier Service

The cashier Service was closed as planned during 2008. Public demands for financial transaction ser-vices will henceforth be met by other market players.

The market for teller-facilitated trans-action services is changing, and demand has continued to decline sharply in the past few years. When customers choose to take care of their payments and transfers via the Internet, cash cards, mailed giros and telephone services, there is less need for over-the-counter transactions. For the Cashier Service, this has meant a decreasing customer base and transaction volume every year.

In June 2007, the parliament adopted the government’s proposed law on the State’s responsibility for certain essential financial transaction services.

The parliament’s decision repealed the Essential Financial Transaction Services Act and stipulated that the public’s demands for essential financial transac-tion services may be procured by the National Post and Telecom Agency (PTS) in those rural areas where the market does not satisfy the need. Conse-quently, the payment services tradition-ally provided by the Cashier Service are to be carried out in other forms begin-ning in 2009.

On July 1, Nordea took over the operation of 76 Cashier Service offices in accordance with the October 2007 agreement. In connection with the take-over, approximately 200 Cashier Service employees have become employees of Nordea. This means that almost half of the Cashier Service’s customers can con-tinue to do their banking errands at the same office that they previously used.

The Cashier Service was closed dur-ing 2008 in accordance with the closure plan submitted to the PTS on October 1, 2007. The closure was accomplished as of November 28, 2008.

2008 FinancialsNet sales totaled SEK 326m (989), a decrease of SEK 663m (67%). Weaker sales were due partly to the fact that the SEK 400m state reimbursement for essential cashier services was not paid in 2008, and partly to the closure of offices. Operating earnings totaled SEK –2m (60). In addition to weaker net sales, the difference resulted chiefly from a positive nonrecurring effect of SEK 100m in the form of a payment from Nordea for taking over the opera-tion of 76 offices.

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Proposed guidelines for determining compensation for executives

The Board has prepared a proposal for new guidelines for determining compensation and benefits for executives to take effect after the next annual general meeting. The guidelines will be submitted for consider-ation at the annual general meeting in march 2009. The guidelines are based on the government’s July 3, 2008 guidelines for employment terms for executives in state-owned companies.

Total compensation for executives shall be competitive, reasonable, appropriate and subject to a salary ceiling. Compensation shall not be a benchmark for comparable enterprises but will be characterized by moderation. A transition to fully premium-based pensions will apply to newly hired employees.

Retirement age is currently 62 years but will be 65 years in future recruitment.

No variable pay or other performance incentive may be paid to executive manage-ment but may be paid to other executives.

For the most recently adopted guidelines for executive compensation, see Parent Company Note 5, Employee and personnel costs.

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Risk Management

Risk Management for increased stability

The ability to manage risks is integral to governance in terms of attaining the group’s goals. By taking risks in a controlled and well-balanced manner, losses can be minimized and

business opportunities safeguarded in order to create success.

Integrated risk managementRisk management is a continuous process, carried out within the operational manage-ment framework, and constitutes a natural part of business planning and continuous operational follow-up. Posten works with a risk management program, Enterprise Risk

Management (ERM), covering all parts of the group. The aim is to create risk aware-ness throughout the entire organization and provide support for strategic and opera-tional decision-making.

Risks and uncertaintiesPosten has identified a number of signifi-cant risks and uncertainties that the group is facing, in the short- and long-term.

External risksMarket risksPosten operates in a deregulated market characterized by a fast rate of change. A number of challenges have been identified that are considered to have a particularly strong impact on competitiveness. The logistics market is distinguished by extens-ive consolidation driven by a handful of global logistics companies. The sharp decline in the economy impacts both letter and parcel volumes, and increasing substi-tution on the messaging and information logistics markets may be further accentu-ated. To increase competitiveness, Posten

made several strategic acquisitions and establishments in the Nordic region during 2008. On April 1, 2008 Posten’s owners signed a letter of intent for the merger of Posten AB and Post Danmark A/S. Read more on page 13.

Politics and regulationsPosten is highly dependent on political deci-sions and regulations, on both the Swedish and European postal markets. Posten main-tains continuous dialogue with various decision-makers in Sweden and the EU to monitor issues that are important to Posten.

Posten’s ability to set prices for USO (universal service obligation) services is reg-ulated by postal legislation. There is a risk that future postal legislation will negatively affect the competitive situation simultane-ous to the National Post and Telecom

Agency (PTS) demanding that Posten change its pricing model based on its assess-ment that special pricing in metropolitan areas with lower mail delivery prices is not cost-motivated. With identical prices throughout the country, fair competition would not prevail.

The Act on Procurement in the Fields of Water, Energy, Transport and Postal Ser-vices (LUF) currently includes postal ser-vices and applies from January 1, 2009. On deregulated markets such as the Swedish market, exceptions may be made if author-ized through an application process by the EU Commission. The Commission has denied Posten’s application for an exemp-tion for, among other things, addressed first-class mail, non-priority mail and sorted non-priority mailings within Sweden to non-metropolitan areas. Posten has been

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Corporate strategy process Determine external

and internal circumstances for the entire group

Business planning process Determine goals,

resources and activities for the group

Report risks • Consolidation • Internal and external reporting• Follow-up

Identify risks • Business environment • Customers • Competitors

Manage risks • Action program • Activities • Insurance

Assess risks • Impact • Probability • Acceptance of risk

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granted exemptions from the application of the Directive, including those concerning parcel services to and between businesses.

Posten’s opinion is that the Commis-sion’s decision to not exempt the entire Swedish postal market does not conform with the Directive’s exemption provisions. Taken together, this means that Posten becomes a contracting entity for a signifi-cant part of the mail operations and for cer-tain parts of the parcel operations. Posten believes that this will distort competition, increase costs and create new administra-tive requirements.

The EU Commission has formally encouraged Sweden, Great Britain and Ger-many to amend their legislation for VAT-free postal services, since the Commission considers such services to conflict with the VAT Directive. If these national statutes are not changed, the Commission may eventu-ally take the case to the European Court of Justice.

In a similar case, a national court in Great Britain requested the ECJ to interpret the sixth VAT Directive. In January 2009,

the ECJ’s Advocate General submitted a draft decision which may become precedent for Member States’ application of the VAT Directive in national legislation. Posten is analyzing potential consequences of the draft decision if certain postal services are exempted from VAT.

DisputesAt year-end 2008, Posten was involved in disputes of a nature not uncommon for businesses such as that of the Posten group. Posten estimates that the resolution of these and other disputes will not have any mate-rial impact on the company’s financial posi-tion.

Internal operational risksSecurityParts of Posten’s business operations are of such a nature that they risk falling victim to crimes such as fraud, robbery, theft and vandalism. Long-term preventive security projects have been implemented to support the operations in reducing these risks. The Cashier Service was closed during the year,

signifying a dramatic reduction in payment transactions and flows of cash and thus a decreased risk of robbery.

Against the background of an increasing IT element in Posten’s operations and increased risks in the open IT community, Posten gives Information and IT security high priority. In 2008, human resources in the security area were further strengthened and the implementation of ISO/IEC 27000 began. Increased focus on risk management aims to attain a reasonable level of security, thus balancing risks and costs.

EmployeesWith over 30,000 employees, the health, commitment and skills of its personnel is always very important for Posten. There is a low degree of staff mobility in work areas demanding physically strenuous activities. This leads to high age structure which can pose great risk of repetitive strain injuries and long-term disability. Measures to address this include introduction of com-mercial letter boxes which improve the work environment for 16,000 mail carriers,

Classification of risks

Internal operational risks

SecurityPersonnel

EnvironmentContinuity

External risksMarket risks/business risks

Politics and regulations

Financial risksCredit risks

Currency risksPension liabilitiesSupply of capital

Posten’s business and operational risks are divided into external, internal operational and financial risks. Risk assessment is based

on the degree to which the risks impact balanced scorecard goals and on their likelihood of occurring.

External risksExternal risks lie beyond Posten’s direct control but may have a major influence on Posten’s market conditions. The risks are identified and analyzed in the group’s busi-ness plan and are handled at a strategic level and in day-to-day operations.

Internal operational risksOperational risks may affect Posten’s every-day operations, leading to financial or confi-dence-related losses. To limit such risks, each manager with business or operational responsibility must ensure that there is suffi-cient internal control. Some risks can be suc-cessfully managed through proper behavior supported by Posten’s code of conduct.

Financial risksPosten has a conservative approach to finan-cial risks. Credit and currency risks arise as a result of Posten’s core operations. The group’s financial management also includes credit risks in interest-bearing investments. Posten’s financial risk management is gov-erned by the group’s Treasury Policy.

Risk Management

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a crucial achievement. Read more about Posten’s employees on page 11.

EnvironmentThe environmental issue is treated as a busi-ness-critical issue of crucial importance for competitiveness. The risks involved are con-sidered to be stronger public opinion on cli-mate change issues, increased demand for investments in commercial solutions to reduce environmental impact and unanti-cipated expansion of environmental taxes. For many years, the environmental aspect has been integrated throughout the entire operational process – from service develop-ment to actual delivery. In close coopera-tion with its clients, Posten develops eco-efficient communication and logistics solu-tions to limit its own and its customers’ impact on the environment. Read more about Posten’s environmental efforts on page 9.

ContinuityPosten’s distribution network for letters and parcels is part of the national infra-

structure. Logistics and mail terminals and sensitive production units within Stralfors must function even in the event of a disrup-tion (electricity, climate, fire, etc.). More extensive disruptions would have major consequences for Posten’s customers, oper-ations and the general public. Preventive fire protection measures and contingency planning at sensitive units are just a few of the measures being taken to reduce these risks. Since a large portion of Posten’s IT operations are outsourced to external sup-pliers, Posten depends on well-functioning agreements and relationships. Disruptions in this area can negatively effect internal processes, customer relationships and the partner outlet network.

Financial risksPosten has a conservative approach to financial risks, delineated in the group’s Treasury Policy. Credit and currency risks arise as a result of Posten’s core operations. The group’s financial management also includes credit risks in interest-bearing investments. At year-end 2008, Posten had

pension commitments that may affect its income statement and balance sheet. Read more about pension provisions on page 62, Note 23. Risk exposure remains at a low level. Read more about financial risks on page 69, Note 29.

Insurable risksPosten group identifies insurable risks on an ongoing basis, and takes steps to reduce risk of loss. Each company is responsible for managing and reporting on its insurance issues in accordance with Posten’s insur-ance program. Posten’s insurance company (captive) is responsible for managing and coordinating the global insurable risks and provides advice on insurance matters to all Posten companies. The respons ibility for Posten’s own insurance company manage-ment and coordination of global insurable risks is centralized and provides advice on insurance matters to all Posten companies.

sensitivity analysisThe sensitivity analysis describes the relationship between key risk and assumption variables and the group’s earnings during a 12-month period.

risk area Variables change (%) Effect on earnings (SEKm)

Personnel risks Change in personnel costs +/– 1 percent 135

Change in sickness absenteeism +/– 1 percentage point 81

Volume risks Change in volume of physical letters +/– 1 percentage point 68

Change in volume of logistics business +/– 1 percentage point 26

Price risks Change in fuel price in view of price clauses in customer agreements +/– SEK 1/liter 39

Change in electricity price (see Note 29) +/– 10 öre/kwh (having accounted for derivatives) 1

Interest rate risks Change in market interest rate1) +/– 1 percentage point 18

Currency risks Translation exposure, relation of SEK to foreign currency (Note 29) +/– 10 percent 343)

Pensions Actuarial assumptions (Note 23)

Change in interest margin of pension provisions2) +/– 0.1 percentage point 12

Change in discount rate and estimated return on assets under management –0.5 percentage point –176

Change in wages +0.5 percentage point –124

Change in income base amount –0.5 percentage point –44

Change in inflation +0.5 percentage point –126

Underfunding of Posten’s Pension Fund (Note 23)

Special wage tax on underfunding of Posten’s

Pension Fund +/– 1 percentage point 29

1) Calculations based on interest-bearing net assets (cash and cash equivalents, investments, interest-bearing liabilities and financial leases).2) Assumptions for the discount rate on pension liabilities and the estimated rate of return on assets under management determine the effect on net financial income and costs for the coming

year. The change in the spread between these rates affects net financial income and costs. Change of 0.1 percentage point in the spread between the discount rate and the expected return on assets under management.

3) Effect on equity.

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Dividend policy and proposal for profit distribution/dividendPosten’s dividend policy, as adopted by the 2007 Annual General Meeting for the period up to and including the end of 2009, states that the ordinary dividend shall total at least 40% of profit for the year. Dividends exceeding this level should be distributed to maintain an effective capital structure.

1) Pursuant to the agreement between the Swedish and Danish states on the merger of Posten AB and Post Danmark A/S, there will be no ordinary dividend distributed for 2008. According to the same agreement, Posten AB will pay out an extraordinary dividend of SEK 1,400m to the Swedish state.

News 2008–2009February 15 Year-end Report 2007: A stronger Posten

grows through enhanced profitabilityMarch 11 Posten becomes sole owner of Norwegian

Tollpost GlobeApril 1 Merger between Posten and Post DanmarkApril 3 Annual General Meeting of Posten AB

(publ)April 29 January–March 2008 Interim Report: On

course toward a historic mergerJune 27 Erik Olsson leaves Posten and Lars G

Nordström takes over as President and Group CEO

August 6 Extraordinary general meeting elects Lars G Nordström as ordinary Board member

August 21 January–June 2008 Interim Report: Sales advance despite weakening economy

September 9 Posten Logistik expands in FinlandOctober 28 January–September 2008 Interim Report:

Sharper focus on costs to counter the eco-nomic downturn

February 2, Welcome go-ahead for historic postal2009 merger

Financial calendar Annual General Meeting 2009 March 31, 2009January–March interim report April 29, 2009January–June Interim Report August 20, 2009January–September Interim Report October 26, 2009Year-end Report 2009 February 2010Annual Report 2009 March 2010Sustainability Report 2009 March 2010

Investor Relations contact personIf you have questions concerning Posten’s financial information, submit your questions via e-mail to [email protected], or contact Elisabet Johansson, Manager, Investor Relations, +46 (0)8 781 1016.

Annual General MeetingThe Annual General Meeting will be held on Tuesday, March 31, 2009 at Posten’s headquarters, Terminalvägen 24, Solna, Sweden. Printed versions of the Annual Report, in Swedish and English, can be ordered from Posten AB, 105 00 Stockholm, Sweden, or via e-mail at [email protected], as of mid-March 2009.

Posten is wholly-owned by the Swedish state. Posten’s commission is to ensure letter and parcel distribution throughout Sweden while enhancing the value of the state’s shareholdings. The Ministry of Enterprise and Energy represents the state’s shares at Posten AB’s annual general meeting, during which members of Posten’s Board of Directors are appointed. Posten’s share capital totals SEK 600m, allocated into 600,000 shares, each with a quota value of SEK 1,000.

key ratios per share

SEK, if not otherwise specified 2008 2007 2006

Number of shares, thousand 600 600 600

Earnings 2,503 2,600 1,682

Dividend 1) 1 042 667

Dividend as % of net earnings 1) 40% 40%1) Pursuant to the agreement between the Swedish and Danish states on the merger of Posten AB

and Post Danmark A/S, there will be no ordinary dividend distributed for 2008. According to the same agreement, Posten AB will pay out an extraordinary dividend of SEK 1,400m to the Swed-ish state.

Access to information Posten’s published reports in Swedish and English are available to read and download at www.posten.se.

dividend

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Message from the chairman

An eventful yearinevitably, 2008 was characterized to a great extent by the approach-ing merger with Post danmark, presented in april. it is a good choice for the future, for both com-panies. The merger offers the new

company increased competitiveness, an improved customer offer and greater inter-national capacity. it also ensures access to postal services with a maintained world-class quality in Sweden and denmark. The danish state and cVc have reached an agreement under which the new company will have two principal owners: the Swedish and danish states.

It is very positive that the agreement has been finalized and that we have been able to proceed with having the merger examined by the relevant competition authorities. Pending their approval, preparations will be made to make the new company a reality as soon as possible.

The Board of Directors succeeded in recruiting Lars G Nordström as Posten’s new President and Group CEO on very short notice last summer, and both operating activ-ities and work on the Post Danmark merger could proceed without loss of tempo. Lars brings to Posten his very valuable experience gained as President and CEO of Nordea.

When financial turbulence in the US quickly developed into a global recession, Posten’s executive management began work-ing on an action program to address a decel-eration in the economy which was much more sudden than anticipated at the time the business plan was formulated. Posten is a company with good procedures, both regarding internal processes and finances. Posten is also a company that has, over the past years, distributed dividends to its owner pursuant to an established dividend policy and has achieved its financial objectives as to returns and equity-assets ratio. Posten meets the continued uncertain prospects for 2009 in a strong financial position. This, together with the action program, lays the foundation for Posten to take advantage of the business opportunities that always arise in a recession and to stand strong after even a long-drawn-out recession.

The Cashier Service was closed during 2008 pursuant to a previous parliamentary decision and in full compliance with the plan submitted to the National Post and Telecom Agency in November 2007. In July 2008, around 70 offices were transferred to

INordea; the remaining offices were closed during the fall. This signifies the end of Pos-ten’s banking and financial transactions ser-vices. On behalf of myself and the Board of Directors, I would like to extend thanks to all employees who are no longer with the group as a result of the closure of the Cashier Service. Their tremendous loyalty and commitment allowed customers to receive excellent service throughout the operation of the business.

Posten’s markets are influenced in pace with transformations in the way businesses and private individuals communicate. It is becoming more and more obvious that the traditional postal market is part of a com-munications market where actors compete to offer physical distribution, electronic communication and other forms of commu-nication. Businesses and private individuals choose the method that best suits each indi-vidual communication opportunity. I hope that the review of the Swedish Postal Ser-vices Act that has been initiated will result in future postal legislation that takes the prevailing market conditions into account,

and thus does not limit Posten’s opportuni-ties to operate on the increasingly competi-tive, cross-border market regulated by the Postal Services Act.

The challenges facing Posten as a group, as well as specific challenges for each opera-tional area, are described in many sections of this Annual Report. I would like to emphasize that Posten, through the strate-gic acquisitions made in growth areas infor-mation logistics and Nordic logistics opera-tions, has strengthened the group as a whole. At the same time as these operations are consolidated and offers are honed to meet the changing needs of the market, the Board will evaluate new collaboration opportunities and potential acquisitions on an ongoing basis.

I predict that 2009 will be a very exciting year, and I would like to thank all of Posten’s employees who, by virtue of their great com-mitment, contribute to Posten’s being a world-class company – in many ways!

Marianne NivertChairman

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31co r p o r at e g o v e r n a n c e r e p o r t

Posten AB (publ) 556128-6559

Corporate governance report

Posten is wholly-owned by the Swedish state. Value-creation is the overarching objective of all state-owned companies, and the govern-ment is responsible for actively monitoring and managing state assets. The Minister for Enterprise and Energy is ultimately in charge of implementing the state’s ownership policy and appointing the boards of state-owned companies. Posten’s universal service obliga-tion is set out in specific legislation and regu-lations; read more on page 38.

This corporate governance report has not been audited.

STATE OWNERSHIP POLICY AND THE SWEDISH CODE OF CORPORATE GOVERNANCEThe ownership policy encompasses issues related to corporate governance, such as the appointment of boards of directors, finan-cial reporting, annual general meetings, and approaches to financial, social, and sustain-able development. The Swedish Code of Corporate Governance is also part of the government’s ownership policy framework.

Posten’s application of the Swedish Code of Corporate GovernancePosten strives to comply with the principles set out in the state’s ownership policy as expressed in the 2007 Annual Report for state-owned companies, guidelines for exter-nal reporting in state-owned companies, guidelines for terms of employment for exec-utives in state-owned companies, and the Swedish Code of Corporate Governance.

However, the following rules in the Swedish Code of Corporate Governance will not be applied by Posten:

2.1 The nomination and appointment of Board members is done in accordance with the principles described in the state’s own-ership policy instead of generally applied procedures for nomination committees in the industry.

4.4 Under the Code, the Board of Directors must include a specified minimum number of members who are independent of major shareholders, and the independence of all Board members must be audited. The pri-mary reason for this rule is to protect minority shareholders. In wholly-owned state companies and in companies with only a few shareholders, there is no need to fulfil this criterion.

9.2 Rules on share-based incentive schemes are not applicable, as the state owns 100% of Posten’s shares.

Deviations from the guidelines for external reporting are explained as follows:

The guidelines state that the company shall report on its efforts in areas such as workplace equality and ethical issues in its annual report. Posten has instead chosen to continue reporting on its work on these issues in this Corporate Governance Report, presented as its own section in the printed Annual Report, and on posten.se.

Posten publishes a separate Sustainabil-ity Report in accordance with the Global Reporting Initiatives guidelines. This will include an independent certification from the auditors duly elected at Posten’s Annual General Meeting, Ernst & Young.

The President and Group CEO is a member of the Board of Directors in accord ance with a decision taken at an extraordinary general meeting on August 6, 2008.

CORPORATE GOVERNANCEThis corporate governance report aims to describe Posten’s current status and future goals with respect to the state’s ownership policy, the guidelines for external reporting and the Swedish Code for Corporate Gov-ernance.

Annual General MeetingThe Ministry for Enterprise, Energy and Communications votes on behalf of the state at Posten AB’s Annual General Meet-ing and thereby appoints Posten’s Board of Directors.

2008 meeting of shareholdersPosten’s Annual General Meeting, held on April 3, 2008, was open to the public and the media. Close to 100 people attended, including one Member of Parliament.

2009 meeting of shareholdersThe 2009 meeting of shareholders is planned for March 31. The public will be offered the opportunity to attend the meet-ing. As stipulated by the Swedish Code of Corporate Conduct, Posten published the date of its 2009 shareholder’s meeting on its website and in the January–September 2008 interim report.

Notice and minutesAn Annual General Meeting notice is sent by letter to the shareholder and is published in periodicals Swedish Official Gazette and Dagens Nyheter. Notices are also sent to the offices of parliament pursuant to the com-pany’s articles of incorporation and the state’s ownership policy. Before the 2008 AGM, public notices were placed in the Swedish Official Gazette Internet edition and in Dagens Nyheter. Invitations to the public were also published in Svenska Dag-bladet and Dagens Nyheter. Minutes from the 2008 AGM are published on www.pos-ten.se. Upcoming minutes are published as soon as they have been verified.

RegistrationThe public and members of parliament will also be invited to register on Posten’s web-site to attend next year’s AGM.

Bodies for the governance and assessment of Posten

CEO

Swedish Post and Telecom Agency

Audit Committee

Compensation Committee

Auditors

Has statutory responsibility for Posten

Exercises this responsibility in part by representing the owner at Posten’s AGM

Appoints executive manage-ment, Chairman of the Board and auditors

Responsible to the Board for day-to-day management

Responsible for the company’s organization and management of the company’s affairs. Appoints from among its members Audit and Compensation Committees. Draws up rules of procedure and instructions to the CEO.

Regulator of all postal operations in Sweden

Examines the company’s annual report, accounts and management of the Board and CEO.

Government

Ministry of Enterprise, Energy

and Communications

Annual General Meeting

BoardAssists the Board on issues concerning the group’s ac-counting control, governance and accounting and advises the owner on choice of auditor.

Handles executive com-pensation

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32 co r p o r at e g o v e r n a n c e r e p o r t

The Board’s compositionSeven ordinary Board members were elected at the AGM on March 3, 2008. Marianne Nivert was appointed Chairman. Among the elected Board members, 50% are women and 50% are men. The average age is 52 years.

Extraordinary general meetingLars G Nordström was elected as ordinary Board member at an extraordinary general meeting on August 6, 2008. Since July 2008, Lars G Nordström is President and Group CEO of Posten.

Marianne Nivert(1940) Resides in Stockholm.Chairman since April 2003, Board member since December 2002.B.A.Previous positions include: President and CEO, Telia;Vice-chairman, Lennart Wallenstam Byggnads AB and Systembolaget.Board member of Beijer Alma AB and SSAB.Committee memberships: Compensation Committee (chairman) since 2003.

Mats Abrahamsson(1986) Resides in Linköping, Sweden.Board member since April 2003.PhD (Tech.). Professor at Linköping University.Board member of the Institute of Tech-nology at Linköping University, Dixma Consulting AB and Linköpings Manage-ment Enterprising AB.

Ingrid Bonde(1959) Resides in Stockholm.MBA. Board member since April 2005.CEO of AMF Pension. Board member of St. Erik’s Eye Hospital and the Center for Business and Policy Studies (SNS).Committee memberships: Audit Committee since 2005.

Gunnel Duveblad(1955) Resides in Danderyd, Sweden.Board member since March 2007.Degree in Systems Engineering from Umeå University.Previous positions include CEO of EDS Northern Europe.Board member of HiQ International AB,

IBS, Ruter Dam Foundation and Sweco AB.Committee memberships: Audit Committee since 2007.

Katarina Mohlin(1961) Resides in Stockholm.Board member since April 2003.MBA. Head of Communications, If P&C Insur-ance Company.Board member of Danderyds Sjukhus AB.Committee memberships: Compensation Committee since 2003.

Lars G Nordström(1943) Resides in Uppsala, Sweden.Board member since August 2008.President and Group CEO of Posten as of July 1, 2008.Studied law at Uppsala University.Previous positions include President and CEO of Nordea Bank AB, 2002–07.Board member of TeliaSonera AB, Nordea Bank AB, Swedish-American Chamber of Commerce, European Financial Manage-ment & Marketing Association (EFMA) and the Royal Opera in Stockholm.

Board of Directors

Marianne Nivert

Gunnel Duveblad

Mats Abrahamsson

Katarina Mohlin

Ingrid Bonde

Lars G Nordström

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Bertil Persson(1961) Resides in Stockholm.Board member since April 2005.MBA.President and CEO of Beijer-Alma AB.Committee memberships: Compensation Committee since 2007.

Richard Reinius(1967) Resides in Stockholm.Board member since March 2007.MBA.Deputy Director at the Ministry of Enter-prise, Energy and Communications, state ownership unit. Board member at Jernhusen AB.Committee memberships: Audit Committee (chair) since 2007.

Employee representativesAlf Mellström(1956) Union-appointed representative.Resides in Nyköping, Sweden.Board member since April 2001.Employee representative appointed by the Union of Service and Communication Employees (SEKO).Joined Posten in 1978.

Anne-Marie Ross(1951) Union-appointed representative.Resides in Strängnäs, Sweden.Board member since April 2005.Employee representative appointed by the Union of Service and Communication Employees (SEKO). Joined Posten in 1971. Member of SEKO’s executive committee.

Kjell Strömbäck(1950) Union-appointed representative.Resides in Tullinge, Sweden.Board member since June 1999.Employee representative appointed by the Union of Civil Servants (ST) at Posten.Joined Posten in 1968. Board member at ST.

Deputy employee representativesNiklas Nilsson(1969) Union-appointed representative.Resides in Malmö, Sweden.Deputy representative since December 2007.Employee representative appointed by the Union of Service and Communication Employees (SEKO).Joined Posten in 1987.

Tom Tillman(1951) Union-appointed representative.Resides in Gothenburg, Sweden.Deputy representative since April 2005.Employee representative appointed by the Union of Service and Communication Employees (SEKO).Joined Posten in 1971.

Kjell-Åke Öström(1945) Union-appointed representative.Resides in Härnösand, Sweden.Deputy representative since May 2003.Employee representative appointed by the Union of Civil Servants (ST) at Posten.Joined Posten in 1963.

Bertil Persson

Anne-Marie Ross

Richard Reinius

Kjell Strömbäck

Alf Mellström

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Board of directors’ actionsRules of procedure/delegation of authorityThe Board of Directors establishes annual rules of procedure based on a model crafted by the Ministry of Enterprise, Energy and Communications and on the Swedish Code of Corporate Governance. The rules of pro-cedure regulate matters such as the Chair-man’s duties, information to the Board and the roles and responsibilities of the CEO and Board members. According to the rules of procedure, the Board and the owner’s representative must come to agreement on crucial issues. Apart from the committees presented in this report, Board tasks are not divided among the members.

The CEO is also a Board member and participates in that capacity. Other com-pany officials participate in Board meetings in reporting or administrative capacities. Posten’s General Counsel serves as secre-tary to the Board of Directors.

Board actions in 2008In its ownership policy, the government dis-cusses several policy issues related to finan-cially, environmentally and socially sustain-able development. The Board of Directors considers these questions important to soci-ety in general and to Posten’s role in society. Posten provides a short report on its work in these areas in this corporate governance report. For further information, see Posten’s sustainability report.

Ethical, social, and environmental responsibilitiesPosten supports the fundamental interna-tional guidelines for human rights, employ-

ment conditions, environmental responsi-bility and prevention of corruption as docu-mented in the OECD’s Guidelines for Mul-tinational Enterprises and in the United Nations’ Global Compact.

On December 11, 2007, the Board voted to adopt a code of conduct prepared by executive management. During 2008, the code has successively replaced the previ-ously-adopted group policies that guided Posten and its employees in their actions, both internally and externally. All employ-ees have received the code of conduct and all managers have specific responsibility to implement the code in the workplace.

The entire Posten group is certified in compliance with the ISO 9001:2000 quality standard and the ISO 14001:2004 environ-mental standard. Read more about Posten’s environmental efforts on page 9 as well as in Posten’s sustainability report and on www.posten.se.

Workplace equality and diversityEvery company in the Posten group has an established workplace equality plan. As of December 31, 2008, executive management is composed of 20% women and 80% men. The distribution among management posi-tions is 25% women, 75% men. Posten has adopted a diversity plan.

External reportingPosten’s aim is for all interest groups to receive up-to-date, transparent, relevant and comprehensible information on Pos-ten’s current position and development in issues related to financially, environmen-tally and socially sustainable development.

Posten publishes interim reports for the first and third quarters within one month of the close of the reporting period. Interim reports for the second quarter and the year-end report are published within two months of the close of the reporting period. Currently, Posten views it as a greater prior-ity to ensure the quality of all external reporting than to follow the government’s preference for all state-owned companies to publish their semi-annual reports before August 15. The annual report is published in March. Since 2006, Posten has also pub-lished a sustainability report based on the guidelines for sustainability reporting established by the Global Reporting Initia-tive. Posten’s website, www.posten.se, is updated with corporate governance infor-mation in accordance with the state’s own-ership policy and the Swedish Code of Cor-porate Governance.

attendance at Board meetings 2008

Number of Board meetings

Marianne Nivert 6

Mats Abrahamsson 6

Ingrid Bonde 6

Gunnel Duveblad 6

Katarina Mohlin 5

Lars G Nordström1) 3

Bertil Persson 5

Richard Reinius 6

Alf Mellström 6

Anne-Marie Ross 6

Kjell Strömbäck 5

1) Elected at AGM on August 6, 2008.

Evaluation of Board actionsThe Board conducts an annual evaluation of its own actions. Areas evaluated include

Board meetings main topic additional key issues

February 14, 2008 Year-end report • Acquisition of Tollpost Globe AS

April 3, 2008 Statutory meeting Confirmation of Board’s rules of procedure • Earnings day for Posten’s employees

April 28, 2008 Interim report • Merger of Posten AB and Post Danmark AS

August 21, 2008 Interim report • Pricing issues

October 24, 2008 Interim report • Merger of Posten AB and Post Danmark AS

December 8, 2008 Financial plan 2009 • Guidelines for determining compensation and benefits for corporate executives

Additional key issues: in addition to the budget, full-year results, interim financial reports, ongoing investments and decisions regarding efficiency improvements, the Board has dealt with the merger with Post Danmark, the discharge from office of the former President and Group CEO and the appointment of the new President and Group CEO.

The Board of Directors held five regular meetings and one statutory meeting. The following issues were addressed:

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the manner in which important decisions are prepared, discussed and managed; whether the right issues are brought up by the Board; the integrity of supporting docu-mentation; and how well decisions and dis-cussions are recorded in the minutes. Verbal and written feedback is provided to Board members.

Board members’ remunerationRemuneration for Board members is deter-mined by the Annual General Meeting. In 2008, the remuneration of each AGM-elected Board member was SEK 210,000, while the chairman’s remuneration was SEK 420,000. Members of the Audit Com-mittee are paid SEK 40,000, while the com-mittee chair receives SEK 50,000. Members of the Compensation Committee are paid SEK 20,000, while the chair receives SEK 30,000. See also Note 5, page 65.

Audit CommitteeThe Audit Committee’s rules of procedure are set by the Board, with the purpose of aiding the Board in issues concerning finan-cial control, governance and auditing. The Committee also assists the owner in choos-ing auditors. The Audit Committee, in addi-tion to reporting to the Board on its efforts, regularly reviews the auditors’ reports and determines whether they are performing their task independently, objectively and cost-efficiently. The Audit Committee deter-mines for this purpose an annual audit plan for internal auditing work. The committee is comprised of at least three Board mem-bers and meets at least four times per year. The company’s auditors participate in

meeting(s) at which the year-end report, annual report and auditors’ report are pre-sented, as well as when they are needed for assessment of the group’s financial position. The committee chair is responsible for con-tinually apprising the Board of the commit-tee’s activities. The Audit Committee con-sists of Richard Reinius (chair), Ingrid Bonde and Gunnel Duveblad.

Compensation CommitteeIn addition to shaping policy and outlining principles for compensation and other bene fits received by the CEO and executive management, the Compensation Commit-tee is tasked with outlining remuneration principles for external directors serving on the boards of subsidiaries. The committee meets at least twice per year. The Chairman of the Board is responsible for continually apprising the Board of the activities of the committee. The committee is comprised of Marianne Nivert (chair), Katarina Mohlin and Bertil Persson.

AuditorsPosten’s auditors are appointed for four-year terms by the AGM. Since the 2007 AGM, Ernst & Young AB has functioned as the auditor, with Lars Träff as the managing auditor. The auditors meet with the Board at least once each year and also participate in a number of Audit Committee meetings (see above). The Swedish National Audit Office has registered Per Redemo as the per-manent auditor and Göran Selander as the deputy auditor for the period until the 2012 AGM.

Executive managementThe CEO, assisted by the rest of the execu-tive management team, oversees day-to-day business operations as framed by the Board’s rules of procedure and instructions. The relationship between the Board and the CEO is defined in the rules of procedure and in the instructions to the CEO.

The leading principle for Posten’s execu-tive and subsidiary management is that it should be easy to make decisions and to manage and follow up on operations. The parent company exercises strategic guid-ance over the subsidiaries/business seg-ments and is organized for two types of functions: corporate strategic functions that maintain unanimity among the companies and realize synergies between companies, and corporate shared-service units which provide non-business-specific support func-tions used by two or more companies.

Since March 1, 2008, executive manage-ment has been comprised of the President and Group CEO, the heads of Posten’s six corporate management functions (Execu-tive Vice President, Finance and Treasury, Human Resources, Communication, IT and Legal), and the executive vice presidents for Posten Meddelande AB, Strålfors AB and Posten Logistik AB.

Specialist in infor-mation logistics and graphic pro-duction for the corporate market. Offers start-to- finish solutions for the transfer of business-critical information.

Logistics special-ist for corporate customers. Offers palletized logis-tics, parcels and express delivery, in-night freight for-warding and third-party logistics.

The Cashier Service fulfilled Posten’s legal obligation to pro-vide nationwide financial transac-tion services. The Cashier Service was closed as of December 31, 2008.

Offers nationwide messaging ser-vices to private individuals and companies, includ-ing distribution of mail, periodicals and direct mail as well as distribution and collection of private parcels. Manages Posten’s partner outlet net-work and business service centers.

Posten AB

StralforsPosten Logistik

(Logistics)Cashier Service

Posten Meddelande (Mail)

Operational structure

President and Group CEO, Posten AB

Executive Vice President

Human resources

Communication IT

Finance & Treasury

Legal

Posten Meddelande AB

Strålfors ABPosten

Logistik ABCashier Service

Organization

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Lars G Nordström President and Group CEO of Posten as of July 1, 2008 (1943).Studied law at Uppsala University.Previous positions include President and CEO of Nordea Bank AB, 2002-07.Board member of TeliaSonera AB, Nordea Bank AB, Swedish-American Chamber of Commerce and Viking Line Abp. Chairman of Finnish-Swedish Chamber of Commerce, the European Financial Management & Marketing Association (EFMA) and the Royal Opera in Stockholm.

Viveca Bergstedt Sten General Counsel & Senior Vice President (1959). Joined Posten in 2002.Master of Law and MBA.Previous positions include: Head Counsel, LetsBuyIt.com and SMART AB; Corporate Legal Counsel, Scandinavian Airlines.

The Legal executive management function is responsible for providing legal counsel and analysis for the group in the areas of corporate law, negotiations and contract law.

Joss Delissen Chief Information Officer (CIO) (1963). Joined Posten in 2006.MBA.Previous positions include: various posi-tions at Unilever, most recently Director of Solutions Architecture.

The Information Technology executive management function is responsible for coordinating and managing Posten’s IT operations and architecture and for devel-oping IT strategy and standards.

Andreas Falkenmark President, Posten Meddelande AB (1955). Joined Posten in 2005.Master of Law.Previous positions include: CEO of NK För-valtning AB; CEO of Duka AB; CEO of Coop Sverige AB; CEO of Observer North-ern Europe; and Executive Vice President responsible for Marketing and Sales, Posten.

Posten Meddelande AB is responsible for de-veloping Posten’s service offer for administra-tive and direct mail. The company also runs Posten’s partner outlet network and business service centers.

Bo Friberg Chief Financial Officer (CFO) (1957). Joined Posten in 2002. MBA.Previous positions include: Business Devel-opment Director, NCC AB; Finance and IT Director, NCC AB; Business Controller, Beckers AB, Ranthal-Höganäs AB and Nord stjernan AB; Auditor, Pricewater-houseCoopers.

The Finance & Treasury function is in charge of Posten’s financial management, which includes business planning, business controlling, accounting and audit, and other financial matters, and coordinates risk management for the group. The Finance & Treasury function also manages Shared Services and the Corporate Action Program office.

Executive management

Lars G Nordström

Andreas Falkenmark

Viveca Bergstedt Sten

Bo Friberg

Joss Delissen

Marie Hallander Larsson

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Henrik Höjsgaard

Per Samuelson

Per Mossberg

Göran Sällqvist

Marie Hallander Larsson Senior Vice President, Human Resources (1961). Joined Posten in 2005.Certified preschool teacher; BSc. (Econ.); BSc Psychology and Pedagogy. Previous positions include: HR Director, Wedins Skor & Accessoarer AB, Scandic Hotels AB and IBM/Responsor. Other duties: Board member in Samhall AB.

The Human Resources corporate manage-ment function ensures that the group has progressive human resource policies that create the right conditions for Posten’s employees to perform well.

Henrik Höjsgaard President, Posten Logistik AB (1965). Joined Posten in August 2007. Previous positions include: President of Keolis Nordic AB; President and CEO of Busslink in Sverige AB; TNT International Express in Sweden; head of TNT Interna-tional Express in Denmark; and ship broker in Denmark, the UK and Hong Kong.Other duties: board member of Nils Hanssons Åkeri AB.

Posten Logistik AB develops Posten’s ser-vice offer in logistics, such as parcels, pallets and express services. The business segment is also responsible for the MyPack distribu-tion network in Norway and Finland.

Per Mossberg Senior Vice President, Corporate Com-muni cations (1953). Joined Posten in 2004.BSc (Econ).Previous positions include: Partner, JKL AB; Communications Director, Telia, Trygg Hansa, Nobel Industries and Bofors.

The Communication corporate manage-ment function involves coordinating the group’s overall communication, with the aim of improving Posten Group’s standing in terms of confidence. Area of responsibil-ity covers external and internal communi-cation, IR, Public Affairs and brand.

Per Samuelson President, Strålfors AB (1957). Joined Stralfors in 1999 and Posten in 2006.MBA.Previous positions include: various posi-tions in the Perstorp and PLM groups, most recently as division manager and member of PLM executive management; teacher at the Stockholm School of Economics and IFL.

Stralfors is an IT-focused business-to- business company in the area of informa-tion logistics.

Göran Sällqvist Executive Vice President (1957). Joined Posten in 2003.BSc. (Econ.), Purchasing and Logistics.Previous positions include: Pt CEO Coop Sverige AB; Vice President for Production and Logistics, Posten AB.Other duties: Board member of Bergen-dahls gruppen AB.

The Executive Vice President manages the group’s strategic alliances and partnerships. The responsibility includes national and international postal regulatory issues, pro-curement, security, property and premises, and environment.

Posten has received a commission to pro-vide universal mail services. The commis-sion is based on the EU directive regulating postal delivery in the EU and on the Univer-sal Postal Union treaty that regulates inter-national mail.

LegislationThe Swedish Postal Act, Postal Statutes, and license terms issued by the Swedish Post and Telecom Agency (PTS) regulate univer-sal postal services in Sweden.

Posten’s universal service commitmentThe Postal Act mandates the provision of nationwide postal services that enable all residents of Sweden to receive addressed mail pieces weighing up to 20 kilograms (universal postal service). Postal services must be of good quality, and it must be pos-sible for everyone to receive such mailings delivered at reasonable prices. In addition, single mail pieces shall be conveyed at uni-form prices. It must be possible to insure mailings and to obtain a receipt from the recipient showing that the mail piece has been delivered. The government’s service

objectives for mail weighing up to 20 kilo-grams are that mail be collected and deliv-ered on every workday and at least five days a week nationwide. The Postal Statutes specify that at least 85% of the mail posted before a specified time and stamped for overnight delivery must be delivered during the following business day, wherever it is addressed to in Sweden. At least 97% of mail shall be delivered within three business days. In 2008, Posten’s delivery perfor-mance for overnight deliveries was 94.9%. For overnight mail, a price limit applies to single mail pieces up to 500 grams, so their price may be raised no faster than the con-sumer price index. This charge has only been raised once since 1997 (on January 1, 2003). Since 2003, the consumer price index has increased by more than 10%. Posten has therefore decided to adjust postal rates in accordance with the general price trends, beginning January 1, 2009.

Posten delivers mail to 4.5 million households and 900,000 businesses five days a week, empties 30,000 mailboxes and has 4,000 service points. Mail is delivered to approximately 970 households 1–4 days

per week by rural mail carriers or via mail-bags. These households are found primarily in sparsely populated areas in the interior of the Norrland region and in the archipela-gos.

SupervisionThe PTS supervises postal operations in Sweden to ensure that Posten complies with postal legislation and fulfils government requirements for universal postal services. PTS has granted permits to conduct postal operations in Sweden to more than 30 com-panies. According to the PTS report Service and Competition 2008, Posten fulfils the government requirements in terms of ser-vice level and quality. The report also states that Posten exceeds by a wide margin the minimum stipulated requirement with respect to proportion of mail pieces distrib-uted on the following day.

Sparsely populated areasPTS has issued general suggestions concern-ing the delivery of mail in the provision of the universal postal service. The general suggestions include advice that, outside

Posten’s universal service obligation

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b o l a g s s t y r n i n g s r a p p o r t 39

urban areas, mail should be delivered to mailbox clusters along the mail carrier’s route. Mail pieces addressed to a postal recipient living less than 200 meters down a side road from the mail carrier’s main route should be delivered to the mailbox cluster on the main route. If there are at least two postal recipients who reside or work per-manently for every kilometer of the side road, mail should be delivered along that road. However, elderly and functionally impaired people are entitled to have their mail delivered to their property line upon request, as opposed to the mailbox cluster. In the follow-up to its general suggestions, presented in October 2006, the PTS declared that, with few exceptions, Posten has conducted its delivery service in accord-ance with the general suggestions. PTS’s surveys have shown that the service level is generally high in Sweden. Only 3% of postal customers served by rural mail car-riers have a mailbox more than 500 meters from their residence or place of employ-ment, and only 1% have further than 1,000 meters to their mailbox.

Shared mailboxesAfter a government decision on October 2, 2008, the government instructed PTS to revoke the portion of its general suggestions on universal postal service mail delivery under the Postal Act (1993:1684) that states that postal operators should induce property owners to install shared mailboxes and, if they do not do so, provides them with the right to direct mail recipients to collect their mail at a distribution point as of January 1, 2011.

Cashier ServiceOn June 14, 2007, the parliament passed the government bill on the State’s responsi-bility for certain essential financial trans-action services. The decision means that, as of 2009, society’s need for essential finan-cial transaction services will be procured by the PTS in those rural areas where the mar-ket is not financially viable. During 2008, the Cashier Service operation was closed pursuant to the closure plan submitted to PTS on October 1, 2007.

Changes in postal legislationIn February 2008, the European Parliament and Council approved Directive 2008/6/EG concerning the complete implementation of community inner markets for postal ser-vices. The new directive includes provisions that the EU postal market will thereby be deregulated by December 31, 2010, with the exception of 11 countries which are exempted until December 31, 2012. The Swedish government has appointed a com-mittee to investigate the ways in which Swedish postal legislation will be adapted to the new EU directive.

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Board of Directors’ report on internal control for financial reporting for fiscal 2008

The Board is ultimately responsible for the company’s internal control. This report on internal control for financial reporting has been prepared in accordance with the Swedish Code of Corporate Governance. The report is not part of the formal finan-cial statements and has not been reviewed by the company’s auditors.

Internal control for financial reporting is defined as the process by which the Board, President and employees provide a reason-able level of assurance for the reliability of external reports. The internal control is described according to an established framework comprised of five sections: con-trol environment, risk assessment, control activities, information and communication, and management and monitoring.

Control environmentThe control environment forms the basis for internal control at Posten and comprises the regulatory framework and corporate culture from which the Board and manage-ment team communicate and work. This culture determines the management’s and employees’ attitudes toward and awareness of control issues in the company.

Posten’s internal regulations include Pos-ten’s code of conduct, regulations and pro-cesses with governing and supportive infor-mation, delegation of authorities and author-

ization manuals. Posten’s delegation of authorities regulates decision-making at the corporate level, with delegation to the busi-ness segments. Within the business segments delegation is given to companies and business units at the lowest appropriate level, with respect to each business segment’s delegated authorities. The delegated authorities are based on the sharing of responsibility between the Board and the CEO, as estab-lished in the Board’s rules of procedure. An ownership policy for subsidiaries regulates subsidiaries’ strategic level of responsibility and goals in line with Posten’s business plan. Posten’s principles for governance of business operations are summarized in the document “Governance and Structures at Posten.”

The Board has appointed a standing Audit Committee, whose tasks include assessing the processes and format for inter-nal control as well as setting the scope and alignment of group risk management in financial reports. The CFO of Posten has organized budget, controlling and financial functions with clearly described roles and responsibilities for reporting and analysis.

Risk assessmentRisk management is a continuous process and constitutes a natural link in business planning and the day-to-day follow-up of the operations. Posten works with a risk

management program, Enterprise Risk Management (ERM), which encompasses all parts of the group. The objective is to increase risk awareness throughout the entire organization, offer strategic decision-making support to the Board and manage-ment team and improve management’s operational decision-making, and ensure control over the company’s risk exposure.

Control activitiesTo ensure satisfactory internal control, con-trol activities are performed throughout the organization, at all units and levels.

A selection of the control and review activities at Posten:• Regulations,governanceandsupporting

information linked to each process are documented in Posten’s shared business system. The various steps in business processes for handling transactions and accounting have been described in detail. The needs and documentation of internal control activities in the processes described have been identified and, where insufficient or noncompliant, have been updated by the process owner.

• Corporateinstructionstargeteachcostcenter with respect to internal control; for example, in relation to reasonability assessments of salaries, travel and enter-tainment expenses, etc.

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• Posten’sadministrativesharedserviceunit contributes to maintaining a reli-able system for delegating tasks and responsibilities in accounting and sys-tems administration.

• Thoserisksthatareidentifiedintheannual systematic reviews of operations, such as in financial reporting, are ana-lyzed and reported by the business seg-ments’ business controller functions. The assessments result in actions and updated routines to safeguard correct financial reporting.

• AllPostencompanieswithcommercialoperations conduct an annual self-evalu-ation of the company’s internal control. In addition, interviews about internal control have been conducted at a sample of Posten companies. A summary of the findings have been presented to Posten’s Audit Committee.

• Duringtheyear,Posten’sinternalauditexamined and assessed the internal con-trol in the group according to the annual audit plan adopted by the Audit Com-mittee.

• Internalauditorsannuallyinspectcashand stamp handling, as well as other security areas in the business service center and mail carrier offices which handle cash.

• Posten’scoreoperationshaveobtainedenvironmental and quality certifications. Annual audits follow up on compliance with operating plans, for example, on Posten group’s values, rules and regula-tions.

• Draftinterimreports,year-endreportsand annual reports are presented to the Audit Committee for review before they are dealt with by the Board. The Janu-ary-September Interim Report was reviewed (but not audited) by Posten’s auditors.

CommunicationPosten has effective communication chan-nels, such as the Posten intranet. Posten’s internal regulations are also accessible via the intranet and are constantly updated in accordance with the applicable rules for certified business systems.

Communication and discussions regard-ing internal control take place regularly in the Audit Committee.

The communication process, established by the Board, ensures that both external and internal communication is correct and sufficient. This policy dictates what should be communicated, by whom and how infor-mation should be distributed.

Governance and monitoringPosten has a structured model for its busi-ness and operational planning. A central corporate business controller function is responsible for managing, coordinating and monitoring the units’ business plans as well as Posten’s business plan. The business con-troller function unit coordinates the work of Posten’s various business controller func-tions. Similarly, Posten’s central risk man-agement unit monitors and analyzes Pos-ten’s assessed risks.

In accordance with Posten’s set gover-nance model, targets, risks and action plans are monitored quarterly under the manage-ment of the CEO and CFO.

Posten’s internal audit is tasked with examining and assessing internal control. Audit plans are set by the Audit Committee, and internal audits are generally carried out using external resources guided by the head of Posten’s internal audit.

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42 co n s o l i d at e d f i n a n c i a l s tat e m e nt s · g r o u p

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43co n s o l i d at e d f i n a n c i a l s tat e m e nt s · g r o u p

Table of contentsPage

Income statement 44

Balance sheets 45

Statement of cash flows 46

Changes in equity 47

Notes

Not 1 Accounting principles 48

Not 2 Estimates and assessments 54

Not 3 Revenue distribution 55

Not 4 Reporting of business segments 55

Not 5 Employees and personnel costs 56

Not 6 Other costs 58

Not 7 Auditors’ fees and reimbursement of expenses 58

Not 8 Depreciation and impairment of tangible and intangible fixed assets 58

Not 9 Net financial items 58

Not 10 Taxes 58

Not 11 Participations in joint ventures 58

Not 12 Intangible fixed assets 59

Not 13 Tangible fixed assets 60

Not 14 Leased machinery and equipment, property leases 60

Not 15 Financial investments 61

Not 16 Long-term receivables 61

Not 17 Deferred tax 61

Not 18 Inventory 62

Not 19 Accounts receivable 62

Not 20 Prepaid expenses and accrued income 62

Not 21 Liquid assets 62

Not 22 Interest-bearing liabilities 62

Not 23 Pensions 62

Not 24 Other provisions 67

Not 25 Accrued expenses and prepaid income 68

Not 26 Assets pledged, contingent liabilities and contingent assets

68

Not 27 Investment commitments 68

Not 28 Statements of cash flows 68

Not 29 Financial risk management and financial instruments 69

Not 30 Transactions with associated parties 73

Not 31 Acquisitions and divestments of operations 73

Not 32 Key events after the close of the fiscal year 74

Consolidated financial statements

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SEKm Note 2008 2007 Change

1,2

Net sales 30,836 29,902 3%

Other income 3 405 230 76%

Total income 4 31,241 30,132 4%

Personnel costs 5 –13,329 –13,169 1%

Transportation costs –6,500 –5,313 22%

Other costs 6, 7, 24 –8,499 –8,597 –1%

Depreciation and impairments of tangible and intangible fixed assets 8 –1,028 –1,058 –3%

Total operating costs –29,356 –28,137 4%

OPERATING EARNINGS 1,885 1,995 –6%

Financial income 9 360 321 12%

Financial costs 9 –128 –132 –3%

Net financial items 232 189 23%

Earnings after financial items 2,117 2,184 –3%

Tax 10 –611 –620 –1%

NET EARNINGS 1,506 1,564 –4%

Attributable to Parent company shareholders 1,502 1,560

Minority interest 4 4

Earnings per share (SEK) 2,503 2,600

For participations in joint ventures, see Note 12.

Income statement

Net sales totaled SEK 30,836m (29,902), up 3%. The acquisition of the outstanding 50% in Tollpost Globe AS increased net sales by SEK 1,227m. Excluding Tollpost, other acquisitions and divest-ments of companies, and the closure of the Cashier Service during 2008, net sales increased 1%. Posten Logistik, representing one-third of the group’s net sales, had organic growth of 7%, while Stralfors had organic growth of 3%. Posten Meddelande’s weaker sales continued to be attributable to the economic slow-down and to increased competition from alternative ways of communication and other market players. The positive trend in distance trade continued.

Operating earnings were SEK 1,885m (1,995). Excluding restructuring costs of SEK 163m (453), operating earnings totaled SEK 2,048m (2,448). The drop in earnings resulted primarily from Pos-ten Meddelande’s weaker operating earnings. Posten Logistik reported improved operating earnings of SEK 142m. In addition, a decrease in certain employee benefit commitments, including disability pensions, positively impacted operating earnings by SEK 235m. Productivity was un-changed from the same period last year. Sickness absenteeism decreased by 0.9%, to 5.6% (6.5%).

Net financial items increased by SEK 43m to SEK 232m (189) due mainly to increased financial income, including SEK 19m in gains on currency hedge upon the acquisition of 50% share in Toll-post Globe AS. Net earnings totaled SEK 1,506m (1,564). Return on equity was 20%. Posten reported continued strong cash flows from operat-ing activities of SEK 1,366m (2,288). The decrease is attributable to the expenses associated with closure of the Cashier Service.

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Balance sheets

SEKm Note2008

Dec 312007

Dec 31

1, 2

ASSETSGoodwill 12 2,527 1,850

Other intangible fixed assets 12 1,074 841

Tangible fixed assets 13, 14 4,653 4,041

Financial investments 15, 29 132 92

Long-term receivables 16 2,160 2,136

Deferred tax assets 17 127 233

Total fixed assets 10,673 9,193

Inventory 18 275 275

Tax credit 169 3

Accounts receivable 19 3,268 3,299

Prepaid expenses and accrued income 20 897 845

Other receivables 29 346 565

Short-term investments 15, 29 1 4

Cash and cash equivalents 21, 29 3,372 4,788

Total current assets 8,328 9,779

TOTAL ASSETS 19,001 18,972

EQUITY AND LIABILITIESEquityCapital stock 600 600

Contributed equity 42 42

Reserves 71 15

Retained earnings 7,267 6,390

Total equity attributable to parent company shareholder 7,980 7,047

Minority interest –1 10

TOTAL EQUITY 7,979 7,057

LIABILITIESLong-term interest-bearing liabilities 22, 29 532 685

Other long-term liabilities 29 157 134

Pension provisions 23 1,394 1,033

Other provisions 24 1,513 1,969

Deferred tax liabilities 17 536 45

Total non-current liabilities 4,132 3,866

Current interest-bearing liabilities 22, 29 475 344

Accounts payable 1,504 1,516

Tax liabilities 90 352

Other current liabilities 29 1,707 1,823

Accrued expenses and prepaid income 25 2,422 2,536

Other provisions 24 692 1,478

Total current liabilities 6,890 8,049

TOTAL LIABILITIES 11,022 11,915

TOTAL EQUITY AND LIABILITIES 19,001 18,972

For participations in joint ventures, see Note 11.For the Group’s pledged assets and contingent liabilities, see Note 26.

Total assets as of December 31 totaled SEK 19,001m, which was a year-on-year increase of SEK 29m.

Goodwill increased by SEK 677m, SEK 622m of which per-tains to acquisition of the outstanding 50% of the shares of Tollpost Globe AS, and the remaining portion to translation differences.

The equity-assets ratio was 42% compared to 37% on December 31, 2007.

The net financial position was SEK 3,264m (4,958), down SEK 1,694m from December 31, 2007. The change resulted primarily from the acquisition of the outstanding 50% of the shares in Tollpost Globe AS, for which cash was paid (see also Note, Acquisitions and Divestments of Operations).

SEKm2008

Dec 312007

Dec 31

Financial investments 132 92

Long-term receivables 2,160 2,136

Current investments 1 4

Cash and cash equivalents 3,372 4,788

Total financial assets 5,665 7,020

Long-term interest-bearing liabilities 532 685

Pension provisions 1,394 1,033

Current interest-bearing liabilities 475 344

Total financial liabilities 2,401 2,062

Net financial position 3,264 4,958

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SEKm Note 2008 2007

OPERATING ACTIVITIESEarnings after financial items 2,117 2,184

Adjustments for noncash items:

Reconciliation of depreciation according to plan 1,028 1,058

Reconciliation of impairments of fixed assets, etc.

Capital gain/loss on sale of fixed assets –17 –11

Capital gain on sale of operations –65

Pension provisions 179 –260

Other provisions –1,093 –222

Other items not affecting liquidity –20 –19

Tax paid –613 –443

Cash flows from operating activities before changes in working capital 1,516 2,287

Cash flows from changes in working capitalIncrease(–)/decrease(+), working capital 190 –176

Increase(+)/ decrease(–), accounts payable –151 117

Other changes in working capital –189 60

Changes in working capital –150 1

Cash flows from operating activities 1,366 2,288

INVESTING ACTIVITIESInvestments in intangible fixed assets –33 –38

Investments in tangible fixed assets –1,101 –951

Investments in financial assets –49

Acquisition of subsidiary, net effect on cash and cash equivalents 28 –1,269 –209

Divestment of subsidiary, net effect on cash and cash equivalents 28 124

Divestment of operations 102

Divestment of other fixed assets 64 165

Increase(–)/decrease(+) in current financial liabilities 100

Cash flows from investing activities –2,286 –809

FINANCING ACTIVITIESLoans raised 314 1

Loans amortized –73 –90

Changes in leasing liabilities –121 –114

Dividend paid –639 –403

Increase(+)/decrease(–) in other financial liabilities 18 –7

Cash flows from financing activities –501 –613

CASH FLOWS FOR THE YEAR –1,421 866

Cash and cash equivalents, beginning of the year 4,788 3,919

Difference in exchange rates in cash and cash equivalents 5 3

Cash and cash equivalents, end of the year 21 3,372 4,788

Consolidated statements of cash flows

Cash flows from operating activities amounted to SEK 1,366m (2,288). The lower cash flow was chiefly attributable to charges for the closure of the Cashier Service.

Cash flows from investing activities totaled SEK –2,286m (–809). Acquisitions of subsidiaries affected cash flows by SEK –1,269m (–209); see also Note, Acquisitions and Divestments of Operations. Divestments of operations affected cash flows by SEK 102m (0). Investments in tangible fixed assets totaled SEK 1,101m (951), of which SEK 629m (239) went to new technology and capacity within the mail and parcel network, and SEK 451m (701) to replacement investments in premises, vehicles and IT.

Cash flows from financing activities amounted to SEK –501m (–613). In 2008, a dividend of SEK 625m (400) was paid to the parent company shareholder, SEK 14m (0) to minority share-holders.

Cash and cash equivalents totaled SEK 3,372m (4,788) at the end of the period. Compared to the end of 2007, cash and cash equivalents decreased by SEK 1,416m, including SEK 5m in exchange rate differences.

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Changes in equity

Equity attributable to parent company shareholders

SEKm Capital stock Contributed

equityHedging reserve

Accum. translation difference

Retained earnings Total

Minority interest

Total equity

Equity 1/1/2007 600 42 0 –55 5 230 5 817 14 5 831Translation differences for the year 70 70 70

Due from acquisitions –5 –5

Total changes in capital wealth recognized directly in equity, excl. transactions with the Company’s owner 70 70 –5 65

Net earnings 1 560 1 560 4 1 564

Total changes in capital wealth, excl. transactions with the Company’s owner 1 560 1 560 4 1 564

Dividends –400 –400 –3 –403

Equity 12/31/2007 600 42 15 6 390 7 047 10 7 057

Equity 1/1/2008 600 42 15 6 390 7 047 10 7 057Translation differences for the year 56 56 –1 55

Total changes in capital wealth recognized directly in equity, excl. transactions with the Company’s owner 56 56 –1 55

Net earnings 1 502 1 502 4 1 506

Total changes in capital wealth, excl. transactions with the Company’s owner 1 502 1 502 4 1 506

Dividends1) –625 –625 –14 –639

Equity 12/31/20082) 600 42 71 7 267 7 980 –1 7 979

1) A dividend of SEK 625m (400) was declared and paid by the parent company to the shareholder, corresponding to SEK 1,041.67 (666.67) per share, and a dividend of SEK 14m (3) from Addresspoint International AB was paid to minority interests.

2) Number of shares is 600,000. Pursuant to the agreement between the Swedish and Danish states on the merger of Posten AB and Post Danmark A/S, there will be no ordinary dividend distributed for 2008. According to the same agreement, Posten AB will pay out an extraordinary dividend of SEK 1,400m to the Swedish state.

Equity totaled SEK 7,979m, an increase of SEK 922m from December 31, 2007. Return on equity amounted to 20% (24). As of 2007, the target for return on equity is 15%. Of total equity, SEK 7,980m is attributable to parent company shareholders and SEK –1m to minority interests. The accumulated translation difference increased by SEK 56m during the year, attributable chiefly to translation differences in goodwill.

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Notes

Note 1 Accounting principlesCompliance with legislation and regulationsThe consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS), issued by the Interna-tional Accounting Standards Board (IASB), together with interpretation statements from the International Financial Reporting Interpretations Com-mittee (IFRIC), to the extent that they have been approved by the European Commission for application within the European Union. The Swedish Financial Reporting Board’s recommendation RFR 1.1 was also applied.

The parent company applies the same accounting principles as the group, with exceptions specified in Note 1, Accounting Principles, on page 80. The differences between the parent company’s and the group’s account-ing principles result from the parent company’s limitations in applying IFRS as a consequence of the Swedish Accounts Act and the Act of Safe-guarding of Pension Commitments, and are to some extent based on tax considerations.

The same accounting principles and calculation methods have been used for the 2008 annual report as for the 2007 annual report, unless otherwise specified.

Basis of preparationThe parent company’s functional currency is SEK, which is also the report-ing currency for the consolidated and parent company accounts. This means that all financial reports are presented in SEK. Unless otherwise specified, all figures are rounded to the nearest million. Assets and liabilities are primarily carried at acquisition cost, with the exception of certain financial assets and liabilities that are reported at fair value. These financial assets and liabilities reported at fair value consist of derivatives as well as financial assets classified either as “financial assets reported at fair value in the income statement” or as “available-for-sale financial assets.” (See the description of categories in the “Financial instruments” section on page 50). Available-for-sale fixed assets and disposal items held for trading are reported at the lower of their fair value less the cost of sale or the value at which they were previously reported.

The reporting under IRFS requires the executive management to make assessments, estimates and assumptions that affect the application of the accounting principles and the reported values of assets, liabilities, income and costs. These estimates and assumptions are based on historical experi-ence and a number of other factors considered reasonable under prevailing circumstances. The results of these estimates and assumptions are used to assess the reported values of assets and liabilities whose values cannot be clearly determined using other sources. Actual future values may differ from these estimates and assessments.

The estimates and assumptions used are reviewed regularly. Changes in estimates or valuations are reported in the period when the change is made, if the change only affects that period, or are reported in future periods as well, if the change affects the original as well as subsequent periods.

Assessments made by the executive management in the application of IFRS that have a material effect on the financial reports as well as estimates that can lead to significant adjustments in the subsequent period’s financial reports are described in further detail in Note 2, Estimates and Assess-ments, and in relevant notes where estimates have been used.

The accounting principles for the group, described below, have been applied consistently during all periods presented in the group’s financial statements. The consolidated accounting principles have been applied con-sistently to the reporting and consolidation of subsidiaries, associated com-panies and joint ventures.

Changes in accounting principlesNew accounting principles that have come into effect and been applied during the year IFRIC 14/IAS 19, The limit on a Defined Benefit Asset, Minimum Fund-•

ing Requirements and their Interaction. Stipulates how asset limits and funding requirements for defined benefit retirement plans shall be calcu-lated in accordance with IAS 19.

IAS 39, Financial Instruments: Recognition and Measurement; IFRS 7 •(supplement), Financial Instruments: Disclosures. The supplement describes the permissible reclassification of certain financial assets.

Application of these new principles has not affected the Group’s position or earnings.

New IFRSs and interpretations that have not yet been applied to the consolidated accountsAs of 2009, the new and revised principles listed below may affect the financial statements: IFRS 8, Operating Segments. Business segment accounting will be based •

on management’s governance of the segment; additional product and service details per country and major customers will be introduced.

Revision of IAS 1, Preparation of Financial Reports. New format for •operating earnings and revised treatment of changes in equity.

IAS 23, Borrowing Costs. Borrowing costs attributable to the acquisi-•tion, construction or production of assets that take a significant time to complete will be capitalized.

IAS 39, Financial Instruments: Recognition and Measurement. Clarifies •accounting and measurement of issued hedging instruments in relation to actual changes in value or cash flows in financial instruments.

As of 2010, the new and revised principles listed below may affect the financial statements: IFRS 3, Business Combinations. Revised rules for determination of •

reported goodwill. IAS 27, Consolidated and Separate Financial Statements. Specifies the •

accounting for changes in the level of ownership interest in a subsidiary with respect to goodwill, profit and loss resulting from changes in own-ership.

Posten’s application of the new IFRS 8 will not involve any changes to the allocation of income statements and balance sheets between business seg-ments. The additional disclosure requirements will entail the provision of some supplementary information. Application of the new IFRS 3 will have some effect on the group’s position and earnings in relation to future busi-ness combinations, primarily with respect to advisory services and consult-ing fees that can no longer be capitalized as acquisition costs. It has not yet determined which alternative in the revised IAS 1 will be applied with respect to format of group earnings. It is deemed that other future revisions will not have a material impact on the group’s position and earnings. Cer-tain supplementary information in the financial statements may be required.

The Company has opted against the early application of the new and revised future accounting principles or improvements to the standards (“Improvements to IFRSs”).

Reporting of business segmentsA segment is a component of the group that can be distinguished for financial reporting purposes, comprising operational divisions or geographical areas. A segment is identified by the fact that its divisions offer similar products and services and that it is exposed to different risks and opportunities from those of other segments. Posten’s primary segment grouping is based on its univer-sal service obligation for mail and parcels, as well as its legal commission to provide essential financial transaction services. The secondary grouping is based on geographic divisions, with Sweden as the principal market.

Information on primary segments is available only for the group.

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Classification, etc.Fixed assets and long-term liabilities essentially comprise amounts expected to be recovered or paid more than 12 months from the close of the accounting period. Current assets and current liabilities essentially comprise amounts expected to be recovered or paid within 12 months from the close of the accounting period.

Basis of consolidationSubsidiariesSubsidiaries are companies in which Posten exercises a controlling influ-ence. This implies directly or indirectly holding the right to set the compa-nies’ financial and operational strategies with the aim of attaining financial benefits. Voting rights that can be exercised or immediately converted are considered when determining the existence of a controlling influence.

Subsidiaries are reported in accordance with the purchase method. Under the purchase method, an acquisition is treated as a transaction in which the group indirectly acquires the assets and assumes the actual and contingent liabilities of the subsidiary. The consolidated acquisition cost is calculated using an acquisition analysis performed upon acquisition. The analysis determines the acquisition cost of the shares or operations as well as the fair value of the assets acquired and the actual and contingent liabili-ties assumed at the acquisition date. The acquisition cost of a subsidiary’s shares or its operations consists of the fair value on the acquisition date of assets, realized or assumed liabilities, equity instruments issued in exchange for the net assets acquired, and the transaction costs directly attributable to the acquisition. The difference between the acquisition cost of the shares in the subsidiary and the fair value of the acquired assets and assumed and contingent liabilities constitutes goodwill.

Subsidiaries’ accounts are included in the consolidated statements from the date of acquisition until the date on which the controlling influence ceases to exits.

Associated companiesAssociated companies are companies in which Posten controls no less than 20 percent and no more than 50 percent of the voting rights or influence. Participations in associated companies are reported in the consolidated statements using the equity method from the date on which the significant influence is established. Under the equity method, the consolidated book value of a participation in an associated company corresponds to the group’s share of that company’s equity as well as consolidated goodwill and any residual value of consolidated surplus and deficit values. The group’s share of associated companies’ operating earnings, financial income, taxes and minority interests is reported after being adjusted for any depreciation, impairments or dissolution of acquired surplus or deficit values. Dividends received from an associated company are deducted from the reported value of that investment.

The group’s acquisition cost, goodwill, any surplus and deficit values are determined in the same way as for subsidiaries, using an acquisition analysis (see the “Subsidiaries” section above).

The equity method is applied until the date on which the significant influence ceases to exist.

Joint venturesFor reporting purposes, a joint venture is a company in which the group exercises a significant influence on operational and financial management decisions jointly with one or more partners based on an agreement. Joint ventures are consolidated in the accounts using the proportional method. Under the proportional method, the group’s stake in each joint venture’s income and costs as well as assets and liabilities are consolidated in the group’s income statement and balance sheet. This is done by combining, item by item, the joint venture partner’s stake in assets and liabilities and income and costs with the corresponding items in the partner’s consoli-dated accounts. Only equity earned after the acquisition is reported in con-

solidated equity. The proportional method is applied from the date on which the joint controlling influence is established, until the date on which that influence ceases.

Transactions eliminated on consolidationIntra-group receivables and liabilities, income and costs, and gains or losses arising from intercompany transactions are eliminated in their entirety upon consolidation. Intra-group losses that indicate impairment are included in the consolidated accounts.

Gains and losses resulting from transactions with associated companies or joint ventures are eliminated in proportion to the group’s stake in those businesses. Losses are recognized to the extent they indicate impairment.

Foreign currencyForeign currency transactionsA group’s functional currency is the currency of the primary economies in which the companies in that group operates. The Posten Group consists of the parent company and its subsidiaries, associated companies and joint ventures.

Transactions in foreign currencies are translated into the functional cur-rency at the rate prevailing on the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated into the func-tional currency at the exchange rate on the balance sheet date. Foreign exchange differences arising from these translations are reported in the income statement. Non-monetary assets and liabilities denominated in for-eign currencies and reported at their acquisition costs are translated at the rate prevailing on the transaction date. Non-monetary assets and liabilities denominated in foreign currencies and reported at fair value are translated into the functional currency using the exchange rate on the date of valua-tion. Changes in exchange rates are then reported in the same way as other changes in the value of assets or liabilities.

Foreign entities’ financial statementsAssets and liabilities held by foreign entities, including goodwill and other consolidated surplus and deficit values, are translated into SEK at the exchange rate prevailing on the balance sheet date. Income and costs in for-eign entities are translated into SEK using an average exchange rate, approximately equal to the exchange rates prevailing on the transaction date. Translation differences arising from the translation of foreign entities are recognized directly in equity as a translation reserve.

IncomeIncome from services is reported in the income statement based on the stage of completion at the balance sheet date. The Messaging and Logistics business segments recognize income when a physical mail piece has been collected for physical transportation. Income related to services featuring an electronic component (hybrid service) is recognized once the object has been converted into a physical format and been received for physical trans-portation in the form of a mail piece. Mail processing facility fees relate to the handling period; that is, the period in which the mail piece was received from abroad. Distribution income is recognized in the period in which the service is performed. Income from post office boxes is accrued over the contract duration. Services in Stralfors are generally performed over a short period of time, the income recognized when the service has been delivered.

The sale of goods is recognized upon delivery in accordance with the terms and conditions of sale, such that income is reported when the risks and rewards associated with the goods are transferred to the counterparty.

Income is not recognized if the financial rewards are unlikely to befall the group. Net sales are reported excluding value-added tax, discounts pro-vided and similar income reductions.

Cashier Service recognized income upon receipt of the transaction, nor-mally coinciding with the day on which service was provided. Other oper-

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ating income refers to income from activities outside ordinary operating activities, such as income from property leases, capital gains realized on the sale of tangible and intangible fixed assets, and other services. This income is recognized when the risks and rewards associated with the goods/ser-vices have been transferred to the counterparty.

Government subsidiesGovernment grants for maintaining essential financial transaction services are recognized in the balance sheet as deferred income when there is rea-sonable assurance that the grant will be received and that the group will fulfill the conditions related to receiving the grant. The right to receive gov-ernment subsidies for cashier services is acquired by gradual stages, depending on the time during which the operations are run, regardless of the level of activity. Government subsidies are reported as net sales on a straight-line basis over the year. No government grant was received in 2008.

Operating costs and financial income and expensesOperating costsPersonnel costs are attributed to the period in which duties are performed. Changes in vacation and wage liabilities are reported on an ongoing basis, as employee entitlements accrue. Thus, periods during which large num-bers of employees are on vacation usually feature below-average personnel costs. Other operating costs are reported in the period during which the goods or services have been delivered or utilized (e.g. rental costs).

Payments for assets leased under operational leasesPayments for operational leases are reported in the income statement on a straight-line basis over the leasing period. Rewards received upon signing a leasing contract are reported as part of the total leasing cost in the income statement on a straight-line basis over the leasing period. Variable costs are expensed in the period in which they arise.

Payments for assets leased under financial leasesMinimum lease payments are divided between interest and amortization of the remaining liability. Interest expenses are distributed over the leasing period so that each reporting period is charged with a payment corre-sponding to a fixed interest rate for the liability reported in that period. Variable costs are expensed in the period in which they arise.

Financial income and expensesFinancial income and expenses consist of interest income from bank depos-its, receivables and interest-bearing securities; interest paid on loans; divi-dend income; foreign exchange differences; unrealized and realized gains and losses on financial investments; and derivatives used in financial opera-tions.

Interest income on receivables and interest expense on liabilities are cal-culated using the effective interest method. When the effective interest rate is used, the present value of all receipts and disbursements during the fixed-interest term equals the reported value of the receivable or liability. The interest component of a financial lease payment is reported in the income statement using the effective interest method. Interest income and expense include accrued transaction costs and any discounts, premiums or other differences between the original reported value of the receivable or liability and the amount settled at maturity.

Issue expenses and similar direct transaction costs related to raising loans are included in the calculation of effective interest.

Dividend income is recognized when the right to receive dividends has been confirmed.

The group and parent company do not capitalize interest in the acquisi-tion cost of assets.

Financial instrumentsFinancial instruments reported on the assets side of the balance sheet include cash and cash equivalents, accounts receivable, shares, loan receiv-ables, bond premiums and derivatives. Reported on the equity and liabili-ties side are accounts payable, debt and equity instruments issued, loans and derivatives.

Financial instruments are initially recognized at acquisition cost, equiv-alent to the instrument’s fair value plus transaction costs, for all financial instruments except those classified as financial assets. Financial assets are reported at fair value in the income statement. Subsequent accounting dif-fers, depending on how the financial instrument is classified, as detailed below.

A financial asset or liability is recognized on the balance sheet when the company becomes a party to the instrument’s terms and conditions. Accounts receivable are recognized on the balance sheet once the invoice has been sent. Liabilities are recognized when a counterparty has rendered services and payment as due under the terms of the contract, even if an invoice has yet to be received. Accounts payable are recognized when an invoice is received.

Financial assets are taken off the balance sheet when the rights of the contract have been realized, when they mature or when they are no longer controlled by the company. The same applies to portions of financial assets. Financial liabilities are taken off the balance sheet when contractual obli-gations are fulfilled or otherwise cease. The same applies to portions of financial liabilities.

Acquisitions and disposals of financial assets are recognized on the date of transaction, which is the day on which the company becomes legally bound to acquire or dispose of the financial assets. This does not apply to the acquisition or disposal of listed securities, which are recognized on the settlement date.

The fair value of a listed financial asset corresponds to the asset’s bid rate in the market on the balance sheet date. The fair value of unlisted financial assets, consisting of accounts receivable, endowment insurance policies and cash, is ascertained through various valuation methods such as the use of recent transactions, the price of comparable instruments and dis-counted cash flows. For further information, see Note 29.

The values of financial assets and groups of financial assets are assessed in every reporting period to discern any objective impairment. The criteria for determining the need for any impairment is primarily based on the counterparty’s officially communicated inability to meet its obligations or on its ability to pay demonstrated by experience on the financial markets.

Financial instruments are classified into categories, depending on the purpose for which each instrument was acquired. The classification is determined at the time of acquisition. The categories are as follows:

Financial assets reported at fair value in the income statementThis category contains two subgroups: financial assets held for trading and other financial assets that the company has initially chosen to place in this category. A financial asset is classified as “held for trading” if acquired for the purpose of resale in the short term. Derivatives are classified as held for trading unless they are used for hedge accounting. Assets in this category are carried at their revalued amount (fair value), with changes in value rec-ognized in the income statement.

Originated loans and receivablesOriginated loans and receivables are financial assets that are not deriva-tives but have fixed payments or determinable payments and are not listed on an active market. They are created by the company when providing money, goods or services directly to the debtor, not for the purpose of trad-ing in the right to recover the debt. This category includes acquired receiv-ables. Assets in this category are valued at amortized cost. The amortized cost is determined based on the effective interest rate calculated at the acquisition date.

Held-to-maturity investmentsHeld-to-maturity investments are financial assets with fixed or pre- determinable payments and fixed maturity, and which the company has the express intent and ability to hold to maturity. Assets in this category are valued at amortized cost. The amortized cost is determined based on the effective interest rate calculated at the acquisition date. Thus, surplus and deficit values as well as direct transaction costs are distributed over the instrument’s duration.

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Available-for-sale financial assetsAvailable-for-sale assets are those financial assets that are not required to be classified in any other category, or financial assets which the company has initially chosen to place in this category. Assets in this category are car-ried at their revalued amount (fair value), with changes in value recognized in equity (except those attributable to impairments). When the assets are disposed of and removed from the balance sheet, unrealized gains and losses in the equity reserve are reversed to the income statement. Interest measured with the effective interest rate method is recognized in the income statement.

Financial liabilities held for trading and other financial assetsFinancial liabilities held for trading consist of interest-bearing liabilities and derivatives not used for hedge accounting. Liabilities in this category are reported at fair value, with changes in value recognized in the income statement.

Other financial liabilitiesFinancial liabilities not held for trading are valued at amortized cost. The amortized cost is determined based on the effective interest rate calculated at the acquisition date. Thus surplus and deficit values as well as direct issue expenses are distributed over the liability’s duration.

Cash and cash equivalentsCash and cash equivalents consist of cash, money in demand deposits at banks and similar institutions, and short-term liquid investments with maturities shorter than three months from the date of acquisition that are exposed to minimal risk of fluctuation in value. Funds in transfer on the statement of cash flows are not treated as cash and cash equivalents. They are accounting items that Posten transfers on behalf of customers. These funds are therefore unavailable to Posten and may not be used by its busi-ness operations. The Funds in transfer item fluctuates independently of operating earnings, investments and other payment streams in the business operations.

Financial investmentsFinancial investments are classified either as financial fixed assets or short-term investments, depending on the purpose of the investment. If the matu-rity or expected investment period is longer than one year, they are classi-fied as financial fixed assets; if shorter than one year but longer than three months, they are short-term investments.

Interest-bearing securities acquired with the aim of being held to matu-rity belong to the category “financial investments held to maturity” and are valued at amortized cost. Interest-bearing securities that the company does not intend to hold to maturity are classified as “financial assets recognized at fair value in the income statement” or “available-for-sale financial assets.”

When assets are reported at fair value in the income statement, changes in value are recognized under net financial items.

Long-term receivables and other short-term receivablesLong-term receivables and other short-term receivables are receivables cre-ated by the company when providing money not for the purpose of trading in the right to recover the debt. Those with an expected holding period lon-ger than one year are classified as long-term receivables, those less than one year as other short-term receivables. These receivables belong to the cate-gory Originated loans and receivables.

Accounts receivablesAccounts receivables are classified under Originated loans and receivables. Accounts receivables are reported at the amount expected to be received less doubtful receivables, assessed on an individual basis. Accounts receiv-ables are written down when considered doubtful; that is, if more than 90 days past due or due from a customer with a history of payment difficul-ties. Accounts receivables from customers recognized as solvent and with good payment histories are not considered doubtful even if more than 90

days past due as long as the customer can be expected to pay appropriate interest. The expected maturity of accounts receivables is short, so they are reported at their non-discounted nominal value. Impairments of accounts receivables are reported under operating costs.

LiabilitiesLiabilities are classified as other financial liabilities and are thus initially reported at the amounts received less transaction costs. After its acquisition date, a loan is valued at its amortized cost using the effective interest rate method. Those with an expected maturity of more than one year are classified as long-term liabilities, and those of less than one year as short-term liabilities.

Accounts payablesAccounts payables are classified under Other financial liabilities. The expected maturity of accounts payables is short, so they are valued at their non-discounted nominal value.

Derivatives and hedge accountingDerivatives held by Posten are in the form of forward contracts used to minimize the group’s exposure to fluctuations in exchange rates, electricity rates and fuel prices. Changes in the values of derivatives are recognized in the income statement, based on the purpose of the holding.

Foreign currency receivables and liabilitiesForward contracts are used to hedge assets and liabilities against foreign exchange risk. Hedge accounting is unnecessary for matching, as the hedged item is translated at the exchange rate on the balance sheet date and the hedge instrument is measured at fair value with changes in value recog-nized in the income statement under foreign exchange differences. Posten thereby achieves essentially the same matching of income and expenses as through hedge accounting. Changes in value related to operating receiv-ables and liabilities are recognized under operating earnings, while changes in value related to financial receivables and liabilities are recognized under net financial items.

Transaction exposure – cash-flow hedgesForward contracts are used to hedge exposure to fluctuations in exchange rates related to cash flows under contractual agreements and in electricity rates and fuel prices related to forecast future cash flows. Value changes are recognized in the income statement.

Net investmentsInvestments in foreign subsidiaries (net assets including goodwill) are not hedged. At year-end they are translated at the exchange rate on the balance sheet date. Foreign exchange differences recognized in the parent compa-ny’s income statement are eliminated in the consolidated accounts through revaluation of the net assets in the subsidiary included in equity.

Tangible fixed assetsOwned assetsTangible fixed assets are reported as assets on the balance sheet when it is likely that the future financial rewards of ownership will befall the com-pany, and if the acquisition cost of the asset can be reliably determined.

Tangible fixed assets are reported at acquisition cost less accumulated depreciation and impairments. The acquisition cost consists of the pur-chase price as well as costs directly related to bringing the asset to the nec-essary place and condition for its use in accordance with the purpose of the acquisition. Examples of directly related costs included in acquisition cost are delivery and handling, installation, registration of title, consulting fees and legal fees. Loan expenses are not included in the acquisition cost of fixed assets produced by the company. Accounting principles for deprecia-tion are described below.

Tangible fixed assets consisting of parts with different useful lives are treated as separate components of tangible fixed assets.

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The reported value of a tangible fixed asset is taken off the balance sheet when the asset is discarded or disposed of, or when no further financial rewards are expected to be gained from the use, discarding or disposal of the asset. Gains or losses arising from the discarding or disposal of an asset are calculated as the difference between the sale price and the asset’s carry-ing value, less expenses directly related to the sale. Gains and losses are reported under other operating income/expenses.

Leased assetsLeases are classified in the consolidated financial statements as either finan-cial or operational leases. Under financial leases, the economic risks and rewards associated with ownership are essentially transferred to the lessee. If such is not the case, the agreement is deemed an operational lease.

Assets leased through financial lease agreements are reported as assets in the consolidated balance sheets. Obligations to pay leasing payments in the future are reported as current and long-term liabilities. Leased assets are depreciated according to plan, while lease payments are reported as interest and amortization of the liability.

For operational leases, leasing fees are expensed during the term based on usage and thus may differ from the leasing fees actually paid during the year.

Additional costsAdditional costs related to tangible assets are added to the acquisition cost only when it is likely that the future financial rewards of ownership will befall the company and the acquisition cost can be determined reliably. All other additional costs are reported as expenses in the period in which they were incurred.

Critical to the determination of whether additional costs should be added to the acquisition cost is whether or not the charge is related to exchanges of identifiable components or subcomponents; if so, such charges are added. The cost of creating a new component is also added to the acquisition cost. Any reported value of an exchanged component or subcomponent not already depreciated is discarded and recognized as an expense at the date of exchange. Repairs are expensed as they arise.

Depreciation principlesTangible fixed assets are depreciated on a straight-line basis over the esti-mated useful life of the asset. Land is not depreciated. The group applies component depreciation, such that the estimated useful lives of material subcomponents are a basis for depreciation.

The depreciation periods are as follows:Mail processing equipment 5–10 yearsMotor vehicles and other transportation equipment 4–8 yearsComputer equipment 4–7 yearsStrategic ERP systems 8 yearsOffice furniture and fittings 5 yearsCommunication buildings 20–50 yearsResidential and commercial buildings 20–67 years

The residual values and estimated useful lives of assets are revised annually.

Intangible assetsGoodwillGoodwill represents the difference between the acquisition cost of a subsid-iary and the fair value of the acquired assets and assumed and contingent liabilities.

The group has not applied IFRS retroactively to goodwill arising from business combinations occurring prior to January 1, 2004; rather, the reported value at that date has been taken as the consolidated acquisition cost, after impairment testing (see Note 12).

Goodwill is measured at acquisition cost less any accumulated impair-ments. Goodwill is allocated to cash-generating units and is no longer amortized but is tested for impairment annually. Goodwill arising from the acquisition of an associated company is included in the carrying amount of the holding in that associated company.

Goodwill relates mainly to the acquisition in 2001 of Posten’s parcel distribution services, the 2006 acquisition of Stralfors and the acquisition of Tollpost AS. Goodwill from these acquisitions is denominated in SEK, NOK, EUR, GBP and DKK.

Capitalized development expendituresDevelopment-related expenditures are capitalized whenever it is deemed they will provide future financial benefits. The reported value includes direct expenses for services and materials. Other development expenditures are expensed in the income statement as they arise. Capitalized develop-ment expenditures are reported on the balance sheet at acquisition cost less accumulated amortization and impairments. Posten defines development expenditures as costs related to the development of commercially viable services and products that can be incorporated into Posten’s offering. These costs include costs that are directly related to the newly developed offering. Development expenditures are capitalized when they satisfy IAS 38 criteria and are estimated to amount to a material sum for the overall development project. Other development expenditures are expensed as normal operat-ing costs.

The main criteria for capitalization are that the development efforts will lead to proven future rewards and cash flows and that the necessary techni-cal and financial conditions exist for completing the development work once it has been commenced.

Other development projects, such as projects related to essential ERP systems, are capitalized when they amount to or are estimated to amount to a material sum for the overall project. Otherwise, such charges are expensed.

Other intangible fixed assetsOther intangible fixed assets comprise acquired brands and other rights, which are reported at the acquisition cost less accumulated amortization and impairments. Straight-line depreciation is used for the term of such rights, usually more than five years.

Additional costsAdditional costs related to capitalized intangible assets are recognized as assets on the balance sheet only when they enhance the future financial benefits that exceed the original assessments. All other payments are expensed as they arise.

Amortization principlesAmortization is reported in the income statement on a straight-line basis over each intangible asset’s estimated useful life, where this can be ascer-tained. Goodwill and intangible assets with indeterminate useful lives are tested for impairment annually or as soon as there is an indication of impairment of the asset in question. Intangible assets are amortized from the date on which they were made available for use.

The following amortization periods are applied:Capitalized, completed development efforts 5 yearsBrands, customer relations, licenses and other rights 5–10 years

InventoryInventory is valued at the lower of acquisition cost, determined using the first-in/first-out (FIFO) method, and net realizable value.

ImpairmentsThe reported values of consolidated assets – with the exception of avail-able-for-sale assets and disposal items reported in accordance with IFRS 5, investment properties, inventories, assets under management used for financing payments to personnel, and deferred tax credit – are tested at each balance sheet date to discern impairment. If such indications exist, the asset’s recoverable value is calculated. The assets listed as exceptions above are tested to applicable standards.

The recoverable value of goodwill, other intangible assets with indeter-minate useful lives and intangible assets not yet ready for use is calculated annually.

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For impairment of financial assets, see the “Financial instruments” sec-tion on page 50.

An impairment loss is reported when the reported value of an asset of a cash-generating unit exceeds its recoverable value. Impairment losses (impairments) are reported in the income statement.

Impairments on assets related to cash-generating units are primarily allocated to goodwill. Proportional write-downs are subsequently charged to the rest of the assets in the unit.

Calculation of recoverable valueThe reported values of the group’s assets are tested at each balance sheet date to discern indications of impairment. If such indications exist, the recoverable value of individual or naturally affiliated assets is measured as the higher of the fair value less selling costs and the useful value. The mea-surement of useful values is based on Posten’s assessment of future pay-ment flows. In the measurement of useful values, future cash flows are dis-counted using a discount rate that takes into account risk-free interest and the risk linked to each specific asset. The assessments are based on the cor-porate business plans and are augmented by other relevant information, used to enhance accuracy.

Reversal of impairmentImpairment losses on goodwill are never reversed. Impairment of other assets is reversed if there is both an indication that the impairment no lon-ger exists and a change in the assumptions used as a basis for measuring such assets’ recoverable values.

Impairment is reversed only to the extent that the reported value of an asset, after reversal, does not exceed the reported value that the asset would have had if no impairment had been recognized, taking into account the amortization that would have been charged instead.

Dividends paidDividends are reported as liabilities after they have been approved for pay-ment by the AGM.

Employee benefitsPension commitmentsPosten Group’s pension commitments are met in part through defined-ben-efit plans featuring a contractually binding promise regarding a given future pension level for employees, and in part through defined-contribu-tion plans for which premiums have been set aside and for which the employee assumes the risk as regards the future pension level. The compa-ny’s obligations with respect to defined-contribution plans are reported as personnel costs in the income statement as they accrue through the employ-ees’ performance of their work duties. Most of the defined-benefit plans consist of a pension plan set up for Posten AB. Actuarial calculations are prepared for all defined-benefit plans in accordance with the projected unit credit method in an effort to establish the present value of commitments concerning benefits for current and former employees. Actuarial calcula-tions are prepared annually and are based on actuarial assumptions, which are made at the end of the fiscal year. These assumptions cover inflation, changes in the income base amount, personnel turnover, discount rates, rates of return and life expectancy.

The group’s net commitments consist of the present value of pension commitments less the fair value of assets under management. Changes in the present value of commitments owing to changed actuarial assumptions are treated as actuarial gains or losses. Actuarial gains and losses are recog-nized as income over the employee’s average remaining period of employ-ment in cases where they exceed the “corridor” threshold for each plan. The corridor threshold equals 10 percent of the higher of the value of the pension commitment and the fair value of assets under management. Pen-sion provisions and similar commitments appearing on Posten Group’s bal-ance sheet equal the commitments’ present value at fiscal year-end, less the fair value of assets under management, unreported actuarial gains or losses and unreported costs related to employment from earlier periods. If this calculation leads to an asset for the group, the reported value of the asset is limited to the sum of the reported actuarial losses plus the value that the

company can be expected to attain in the future from the surplus in funded assets. If the pension cost and pension provision set for Swedish plans devi-ate from the corresponding amount in accordance with RedR 4, the differ-ence is reported for special payroll tax in accordance with UFR 4 (pub-lished as URA 43). For pensions and similar benefits financed through defined-contribution plans, amounts corresponding to Posten’s annual fees for the plans are expensed.

Severance payProvisions for severance pay are made only if Posten can be proven to have committed to terminate an employment contract before its expiration, without a reasonable possibility of withdrawal. If compensation is paid for voluntary termination, a provision is reported when the offer has at least been accepted by the concerned parties’ representative and when the num-ber of employees that will accept the offer can be reliably calculated. When Posten terminates employee contracts, a detailed plan is prepared covering workplaces, positions and the estimated number of employees affected, as well as compensation paid to each personnel group or position and the period of implementation of the plan.

ProvisionsProvisions are made for commitments resulting from an event and for binding loss contracts, in which it is probable that an outflow of resources will be needed to settle the commitment. Provisions are reported on the balance sheet when there is a legal or informal obligation to do so and when the amount can be determined reliably. Provisions related to the legal commission to maintain financial transaction services are made for the unavoidable charges which exceed the estimated financial benefits of the operations. This legal commission is comparable to a loss contract. The provision’s amount is calculated using all information available at the close of the fiscal period. Such information can comprise, for instance, business plans and information regarding the labor market situation. Provisions for restructuring are made when an adequately detailed plan is in place and has been communicated in a fashion that creates firm expectations among stakeholders, or their representatives, who will be affected by the measures.

TaxesTax on net earnings is comprised of current tax and deferred tax. Taxes are recognized in the income statement except when the underlying transaction is recognized directly in equity, provided that the subsequent tax effect is also reported in equity. Current tax is the tax calculated on the year’s tax-able income. Adjustments of current tax attributable to earlier periods are also included.

Deferred tax is calculated in accordance with the balance sheet method, based on the temporary differences between the reported and taxable val-ues of assets and liabilities. The amounts are calculated based on how tem-porary differences are expected to be equalized, and by applying the tax rates and tax regulations that have been decided or announced as of fiscal year-end. Temporary differences are not treated in consolidated goodwill. Legal entities report untaxed reserves including the deferred tax liability. In the consolidated financial statements, however, untaxed reserves are divided into deferred tax liability and restricted equity. Tax credits in deductible temporary differences and loss carry-forwards are reported only to the extent that it is probable that they will lead to lower tax disburse-ments in the future. This probability is based on data contained in Posten’s business and operating plans.

Assets pledge and contingent liabilitiesContingent liabilities are reported when there is a possible commitment arising from an event, the fulfillment of which can only be confirmed by one or more uncertain future events. Contingent liabilities are also reported when there is a commitment that is not reported as a liability or provision because an outflow of resources is not likely to be required. Pledged assets are reported for given guarantees and assets pledged as securities.

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Note 2 Estimates and assessmentsIn making these financial reports, the executive management has made assessments, estimates and assumptions that affect the group’s reported accounts. These estimates and assessments are based on what is known at the time the financial reports are presented, as well as historical experience and the assumptions that the executive management considers reasonable under the current circumstances. The conclusions drawn by the executive management form the basis for the reported values in the accounts. Actual future values, estimates and assessments in future financial reports may dif-fer from those in this report, due to changing environmental factors and new knowledge and experience.

The estimates and assessments most significant for Posten have been made in the areas described below.

Intangible assetsAssumptions are made about future conditions in order to calculate future cash flows that determine the recoverable value of goodwill, brand and customer relations. The recoverable value is compared with the reported value for these assets and forms the basis for possible impairment or rever-sals. The assumptions that have the most effect on recoverable value are future volume development, profit margin development, the discount rate and estimated useful life of the asset. If future environmental factors and circumstances change, these assumptions may be affected so that the reported values of intangible assets are changed. See also Note 12, Intangi-ble Assets.

Pension commitmentsIn the actuarial calculations of Posten’s pension commitments, a number of estimates are made in order to set reasonable assumptions. The most signif-icant is the assumption of the discount rate and future expected returns on

assets under management. Other important assumptions can be found in Note 23, Pensions. Modifications of the assumptions due to changing envi-ronmental factors may influence Posten’s financial statements if the effects of the revised assumptions fall outside the “corridor.” Modified assump-tions also affect the cost forecasts for the upcoming year. A change in the balance between the rate of return and the interest on debt of +/- 0.1 per-centage point impacts earnings by SEK 12m increased or decreased finan-cial cost/income.

ProvisionsIn the process of becoming a corporate entity, Posten assumed a contingent liability (special temporary provisions) such that certain categories of the workforce may choose to retire early, at the age of 60 or 63. The contingent liability is reported as a liability in the balance sheet and is calculated based on previous experience of the proportion of persons who have chosen to exercise their right to early retirement in accordance with these provisions. See also Note 23, Pensions. If the number of those who choose this option should change, the liability will change accordingly.

TaxesThe capitalization of tax loss carry-forward has been assessed based on business plans and estimates of future taxable profits that can utilize tax loss carry-forwards. Estimates have been made on non-deductible costs and non-taxable income in accordance with current tax regulations. Fur-thermore, consideration has been taken of the next six years’ financial results in order to evaluate the reported tax claim at the currently applica-ble tax rate. Changes to tax legislation in Sweden and other countries where Posten operates and changes in interpretations and applications of applicable legislation may influence the size of the reported tax assets and liabilities. Changed circumstances that impact the assumptions will also influence the financial results for the year. Se also Note 17, Deferred Tax.

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Note 3 Revenue distributionNet salesNet sales in the Posten Group arise primarily from the sale of services.

Other income

SEKm 2008 2007

Income from property leases 39 22

Insurance claims 21 0

Gains from the sale of shares 1 22

Gains from the sale of fixed assets 76 30

Foreign exchange gains on operating receivables and liabilities 5 30

Exchange rate gains 30 0

Other 233 126

Total 405 230

Note 4 Reporting of business segmentsPosten’s division into business segments is based on the services offered on the market.

Posten Meddelande offers nationwide messaging services to private individuals and businesses, including distribution of mail, periodicals and direct mail as well as drop-off and collection of private parcels. Manages Posten’s partner outlet network and business service centers.

Stralfors specializes in information logistics and graphic production for the corporate market. Offers start-to-finish solutions for the transfer of busi-ness-critical information.

Posten Logistik specializes in corporate customers. Offers palletized logistics, parcels and express delivery, in-night freight forwarding and third-party logistics. Responsible for Posten’s parcel collection service network, MyPack, in Norway and Finland.

The Cashier Service operation was closed as of December 31, 2008. The closure was carried out during the second half of the year, with the last office closing on November 28, 2008 according to plan. Closure of the Cashier Service was pursuant to a 2007 act of parliament on “the state’s responsibility for certain essential financial transaction services.”

Parent company functions comprise corporate management and shared service operations.In addition to intra-group eliminations, adjustments and eliminations are reported as the effects of recalculating pensions according to IAS 19

(Employee Benefits), financial leasing according to IAS 17 and valuation of financial instruments according to IAS 39.Market prices apply to intra-group purchases and sales.

2008 Jan–Dec, SEKm

Posten Meddelande

(Mail) Stralfors

Posten Logistik

(Logistics)Cashier service

Parent company functions

Adjustments and elim

inationsPosten Group

INCOME AND EARNINGSNet sales, external 16,487 3,811 10,214 325 –1 30,836

Net sales, intra-group 87 86 87 1 –261 0

Total net sales 16,574 3,897 10,301 326 –262 30,836

Other income, external 70 96 31 119 69 20 405

Other income, intra-group 772 1,384 11 2,420 –4,587 0

Total income 17,416 3,993 11,716 456 2,489 –4,829 31,241

Operating earnings 1,118 11 352 –2 991) 3072) 1,885

Net financial items 232

Earnings after financial items 2,117

Tax –611

Net earnings 1,506

TOTAL ASSETS 8,338 3,897 6,385 887 16,007 –16,513 19,001TOTAL LIABILITIES 6,106 2,090 2,927 164 8,502 –8,767 11,022

Investments in tangible and intangible fixed assets 194 290 422 2284) 1,134

Depreciation/Amortization 185 278 259 7 224 75 1,028

Impairments 0 0

Provisions(+)/ Reversals(–)3) 347 70 38 –278 1771) Improvement in earnings compared with the preceding year is attributable to reversed provisions of SEK 350m with respect to the Cashier Service.2) Refers to adjustments to pension costs of SEK 134m (29) calculated in accordance with IAS 19 and a surplus in Posten’s insurance association of SEK 67m (0).3) Refers only to provisions reported internally in Note 6.4) Refers chiefly to investments in vehicles leased by the business segments, primarily Posten Meddelande.

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2007 Jan–Dec, SEKm

Posten Meddelande

(Mail) Stralfors

Posten Logistik

(Logistics)Cashier service

Parent company functions

Adjustments and elimi

nationsPosten Group

INCOME AND EARNINGSNet sales, external 16,824 3,778 8,311 587 2 29,502

State reimbursement 400 400

Net sales, intra-group 84 69 70 2 –225 0

Total net sales 16,908 3,847 8,381 989 –223 29,902

Other income, external 47 48 17 5 93 20 230

Other income, intra-group 792 1,323 27 2,538 –4,680 0

Total income 17,747 3,895 9,721 1,021 2,631 –4,883 30,132

Operating earnings 1,900 2 210 60 –214 372) 1,995

Net financial items 189

Earnings after financial items 2,184

Tax –620

Net earnings 1,564

TOTAL ASSETS 9,466 3,656 5,032 853 16,453 –16,488 18,972TOTAL LIABILITIES 6,980 1 681 2 627 779 10,361 –10,513 11,915

Investments in tangible and intangible fixed assets 225 223 261 2 2784) 989

Depreciation/Amortization 250 254 201 41 221 79 1,046

Impairments 12 12

Provisions(+)/ Reversals(–)3) 114 15 21 130 144 7 4311) Improvement in earnings over the preceding year is attributable to reversed provisions of SEK 350m in the parent company with respect to the Cashier Service.2) Refers to adjustments to pension costs of SEK 134m (29) calculated in accordance with IAS 19 and a surplus in Posten’s insurance association of SEK 67m (0).3) Refers only to provisions reported in Note 6.4) Refers chiefly to investments in vehicles leased internally by the business segments, primarily Posten Meddelande.

Geographic areasPosten’s secondary segment grouping is geographic. Income distributions by geographic area are based on the customer’s billing address. Sweden is Posten’s main market and accounts for 73% (79%) of its income. Subsid-iaries and strategic alliances give the company a solid position in the Nor-dic region and enable it to serve Europe and beyond.

Income Assets Investments

SEKm 2008 2007 2008 2007 2008 2007

Sweden 22,683 23,840 13,570 15,548 748 846

Rest of the Nordic region 5,931 3,707 4,310 2,369 336 107

Rest of the world 2,627 2,585 1,121 1,055 51 36

Total 31,241 30,132 19,001 18,972 1,135 989

2008 2007

Average number of employees, by country Women Men

Proportion of

men Women Men

Proportion of

men

Sweden 11,963 17,713 60% 12,725 18,252 59%

Denmark 116 433 141 399

Finland 93 184 53 110

Norway 168 782 31 93

Other countries 338 496 246 392

Total excl. Sweden 715 1,895 73% 471 994 68%

Total 12,678 19,608 61% 13,196 19,246 59%

Total 32,286 32 442

2008 2007

Gender division of executives, %

Proportion of

women

Proportion of

men

Proportion of

women

Proportion of

men

Executives 25 75 24 76

Board members 28 72 22 78

Personnel costs, SEKm 2008 2007

Wages, salaries and other remuneration 9,372 8,989

Social security expenses 3,785 3,881

of which, pension costs (excl. payroll tax) 1) 866 833

Other personnel costs 172 299

Total 13,329 13,1691) The division of pension costs into defined-benefit and defined-contribution plans is

explained in Note 23, Pensions. Current and former chief executive officers and executive vice presidents account for SEK 16m (18) of consolidated pension costs including payroll tax. Out-standing commitments for these individuals amount to SEK 112m (113).

2008 2007

Wages, salaries and other remuneration, by country, SEKm

Presidents1)

of which bonuses

Other employ

ees Presi

dents1) of which bonuses

Other employ

ees

Sweden 24 8,114 26 8,107

Denmark 8 0.2 299 7 0.4 261

Finland 4 0.2 91 3 0.1 53

Norway 3 0.5 568 3 296

Other countries 7 0.7 254 6 0.2 227

Total excl. Sweden 22 1.6 1,212 19 0.7 837

Total 46 1.6 9,326 45 0.7 8,9441) “Presidents” refers to current and former chief executive officers and executive vice presidents.

Note 5 Employees and personnel costs

cont’d. Note 4

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Note 5, cont’d.

Base salaryPension

premiums Other benefits Total

Executive pay, 10 persons 2008, SEKm 2008 2007 2008 2007 2008 2007 2008 2007

Lars G Nordström, President and Group CEO from July 1, 2008 – – – –

Erik Olsson, President and Group CEO to June 30, 2008 6.8 5.8 3.6 3.7 0.1 0.1 10.5 9.6

Göran Sällqvist, Executive Vice President 3.3 3.1 1.8 1.8 0.1 0.1 5.2 5.0

Total for CEO and Executive VP 10.1 8.9 5.4 5.5 0.2 0.2 15.7 14.6Total for other members of executive management 21.4 20.0 8.6 7.8 0.7 0.6 30.7 28.8

Total for all members of executive management 31.5 28.9 14.0 13.3 0.9 0.8 46.4 43.4Of which, members employed by Posten AB 22.3 22.3 9.7 9.8 0.5 0.7 32.5 32.8

Three members of executive management are not employed by Posten AB. Their payroll expenses are expensed in the companies they work for.

Meeting fees Audit Committee Compensation

Committee Total

Compensation to the Board of Posten Group/Posten AB, SEK thousands 2008 2007 2008 2007 2008 2007 2008 2007

Marianne Nivert (chair) 420 400 30 30 450 430

Mats Abrahamsson 210 200 210 200

Ingrid Bonde 210 200 40 40 250 240

Gunnel Duveblad 210 200 40 40 250 240

Katarina Mohlin 210 200 20 20 230 220

Bertil Persson 210 200 20 20 230 220

Richard Reinius 210 200 50 50 260 250

Total 1,680 1,600 130 130 70 70 1,880 1,800

Three-quarter of the Board meeting fees are paid during the year, one- quarter the following year. All compensation for committee work is paid the following year.

Compensation paid 2008, SEK thousandsFees

2008 Fees 2007

Total fees

Meeting fees 1,260 400 1,660

Compensation for committee work 200 200

Total 1,260 600 1,860

Approved guidelines for executive compensationThe guidelines for determining executive compensation and other benefits approved at the most recent AGM is based on the government’s 2003 guidelines concerning conditions of employment for persons holding exec-utive positions in state-owned companies. Salaries for members of execu-tive management shall conform to market conditions but not be bench-marks for comparable enterprises.

Executive benefitsThe term “executive” refers to The President and Group CEO• Executive management•

Executive compensation does not have variable pay components or perfor-mance incentives. The current CEO has chosen to not receive any salary or other compensation from Posten.

Under the executive pension plan, Posten’s pension plan (ITP-P) is applied as regards defined-benefit pensions, which are based on the individ-ual’s final wage and length of employment. Employees reaching full retire-ment age receive a pension of 10% of their pension-based compensation for wage components up to 7.5 income base amounts, 65% or wage com-ponents between 7.5 and 20 income base amounts and 32.5% of wage components between 20 and 30 income base amounts. Under ITP, execu-tive pensions are supplemented with individual premium-based agree-ments. Retirement plans and agreements stipulate a retirement age of either 60 or 62. For the CEO’s age 60 contract, pension costs equal 18% of the pension-based compensation for wage components up to 20 income base amounts, 36% of wage components between 20 and 30 income base amounts and 50% of wage components in excess of 30 income base amounts. Posten has no pension costs for the current CEO.

Two members of executive management have retirement at 60 (based on earlier retirement plans) and seven have retirement at 62 under Posten’s current executive pension plan.

The employment contracts of all members of executive management stipulate a 12-month notice period when Posten terminates the contract and a 6-month notice period when the employee terminates the contract. If Posten terminates the contract, the employee is entitled to severance pay equal to a maximum of 12 months’ pay and automobile benefits. Income earned from subsequent employment or comparable business activities will be deducted from the aforementioned severance package.

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Note 6 Other costsSEKm 2008 2007

Cost of premises 1,570 1,462

Provisions1) 177 431

Terminal fees 1,147 965

Cost of goods and material 2,028 2,153

Other 3,577 3,586

Total 8,499 8,5971) See also Note 24, Other Provisions.

Note 7 Audit fees and reimbursement of expensesSEKm 2008 2007

Audit

Auditors appointed 11.91) 12.02)

Swedish National Audit Office 0.3 0.2

Total audit costs 12.2 12.2

Other audit and services

Auditors appointed 4.9 3.5

Other auditors 7.1 0.11) Ernst & Young SEK 11.9m2) Ernst & Young SEK 9.8m, KMPG SEK 2.2m

“Audit” refers to examination of the annual report, bookkeeping and admin-istration of the Board and the CEO; other duties resting with the company’s auditors; and advisory services and other types of support that arise in the course of such examination or the performance of such other duties. All other items are “Other audit and services.”

Note 8 Depreciation and impairment of tangible and intangible fixed assets

SEKm 2008 2007

Depreciation/AmortizationLicenses, brands, customer relations and similar assets 147 114

Development, completed 0 3

Buildings and land 101 91

Machinery and equipment 780 838

Total 1,028 1,046

Impairments 12

Total 1,028 1,058

Note 9 Net financial itemsSEKm 2008 2007

Financial incomeInterest income 170 173

Interest income on pensions 165 148

Currency derivative, acquisition of Tollpost 19

Exchange rate profit 6

Total 360 321

Financial costsInterest expense –27 –30

Interest expense on pensions –44 –35

Interest expense on financial leasing –57 –62

Exchange rate losses –5

Total –128 –132

Net financial items 232 189Of which value changes are estimated using

evaluation tools 5 3

See Note 29, Financial Risk Management and Financial Instruments. For interest expense on pensions, see Note 23, Pensions.

Note 10 TaxesSEKm 2008 2007

Current taxCurrent tax attributable to the period –161 –502

Total –161 –502

Deferred taxChange in deferred tax on untaxed reserves –80 –40

Temporary difference in balance sheet items –382 –83

Change in deferred tax on tax loss carry-forwards 12 5

Total –450 –118

Total reported tax expense for the group –611 –620

2008 2007

Reconciliations of effective tax rate % SEKm % SEKm

Pretax earnings 2,117 2,184

Tax according to the parent company rate –28.0 –593 –28.0 –612

Non-deductible expenses –1.2 –25 –0.8 –18

Tax-exempt income 0.6 14 0.3 6

Use of previously uncapitalized loss carry-forwards 0.4 8 –0.1 –1

Tax attributable to previous years 2.1 44 0.3 7

Effect of changed tax rates and imposition of new taxes –0.8 –17 0.0 0

Effect of other tax rates for foreign companies 0.0 1 –0.1 –1

Effect of parent company’s transition to net book value method –1.1 –24 0.0 0

Other –0.9 –19 0.0 –1

Total 28.9 –611 –28.4 –620

Uncapitalized loss carry-forwards are primarily attributable to foreign oper-ations, as well as to Swedish companies ineligible for group contributions.

Note 11 Participations in joint venturesSummary of shares in joint ventures’ income statement and balance sheet items

SEKm 2008 2007

Operating income 262 1,510

Operating costs –244 –1,414

Operating earnings 18 96

Net financial items 1 –3

Tax –5 –28

Net earnings 14 65

Fixed assets 208

Current assets 210

Total assets 418

Equity 212

Long-term liabilities

Current liabilities 206

Total equity and liabilities 418

The group owned 50% of Tollpost AS until March 11, 2008 after which it acquired the remainder of the company.

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Note 12 Intangible fixed assetsGoodwill Other intangible fixed assets

Licenses, brands, customer relations and similar assets

Development, completed

Total other intangible fixed

assets

SEKm 2008 2007 2008 2007 2008 2007 2008 2007

Acquisition value, beginning of the year 1,858 1,698 1,200 1,098 783 782 1,983 1,880

Acquisition of affiliated companies 622 107 360 67 360 67

Other investments 2 33 29 7 33 36

Disposals –4 –2 –2 –6 –6 –8

Reclassifications

Translation differences 55 51 3 8 3 8

Accumulated acquisition value, year-end 2,535 1,858 1,592 1,200 781 783 2,373 1,983

Amortization, beginning of the year –362 –243 –314 –311 –676 –554

Amortization for the year –147 –114 0 –3 –147 –117

Acquisition of affiliated companies

Disposals 4 4

Reclassifications

Translation differences –14 –5 –14 –5

Accumulated amortization, year-end –519 –362 –314 –314 –833 –676

Impairments, beginning of the year –8 –8 –466 –466 –466 –466

Reclassifications

Translation differences

Accumulated impairments, year-end –8 –8 –466 –466 –466 –466

Closing balance 2,527 1,850 1,073 838 1 3 1,074 841

During the year, expensed development totaled SEK 25m (34). Internally generated intangible assets are reported as “completed development projects.” For more information about assets resulting from acquisitions of affiliated companies, see Note 31.

Of the SEK 1,084m total value reported for other intangible fixed assets, SEK 688m is attributable to Stralfors.

Impairment test on intangible fixed assetsGoodwill is the only intangible asset with an indeterminate period of useful life.

The SEK 2,527m reported value of goodwill has arisen in the following cash-generating segments: SEK 1,587m for international parcel and pallet operations (DPD and Tollpost Globe AS), 792m for Stralfors and SEK 148m for other businesses (HIT, PEX, Posten Sjukvårdslogistik, Direct Link and Addresspoint). The recoverable value of each of these cash-gener-ating segments has been based on their value in use. The calculations have been based on two-year business plans and forecasts adopted and formu-lated based on analyses of the external business environment and planned marketing and production activities. The assessments made in the business plans are based on executive management’s knowledge and experience. Value assessments have been made using a discount rate of 10% before tax.

The most significant amounts of goodwill lie in two cash-generating segments: SEK 1,587m for international parcel and pallet operations, and SEK 792m for Stralfors. The assumptions with the greatest impact on the impairment assessments are volume growth, profit margins and useful life. Calculations were made with different assumptions for the pace of growth to evaluate the effects on earnings.

On March 11, 2008 Posten acquired the outstanding 50% of the shares of Tollpost Globe AS. The company is part of the international parcel and pallet operation and is considered integrated with DPD and the impair-ment test performed. SEKm 622m arose from the acquisition. For interna-tional parcel and pallet operations, the current business plan forecasts 6% annual growth. For the time beyond the scope of the business plan, the basic assumption is 3% growth per year. The total useful life in the value estimations is unlimited. The test has not revealed any impairment of assets.

With respect to Stralfors, the entire operation is viewed as a cash-gener-ating unit at the time of testing. The total useful life in the test is unlimited and rate of growth is assumed to follow a GDP trend of 2% per year. In the impairment test, the three first years are based on the business plan and budget, and have a relatively high investment level. Therefore, the test has been supplemented with a fourth year, deemed to represent a normal year. Based solely on Stralfors’ isolated cash flows, the assessment shows possi-ble impairment. However, the executive management’s appraisal is that the value of effects not measured in the test exceeds the estimated impairments. Among these effects are a positive cash effect from planned property sales and increased cash flows within Messaging AB resulting from Stralfors’ contribution to increased distribution volumes via expanding information logistics sales within Stralfors. In addition, consideration has been given to the strategic flanking measures taken by the messaging operation to meet market players similar to Stralfors and to ensure that competitors do not acquire Stralfors. Stralfors’ European establishment via Direct Link and its potentially increased messaging income have not been accounted for in the test.

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Note 13 Tangible fixed assets

Buldings and landMachinery and

equipment

Ongoing construction and

advances Total

SEKm 2008 2007 2008 2007 2008 2007 2008 2007

Acquisition value, beginning of the year 1,951 2,078 9,728 9,039 284 348 11,963 11,465

Acquisition of affiliated companies 352 4 40 57 25 417 61

Other acquisitions 96 26 732 755 273 170 1,101 951

Disposals –12 –189 –1,287 –405 –25 –1,324 –594

Reclassifications 10 5 238 243 –231 –235 17 13

Translation differences –35 27 87 39 –10 1 42 67

Accumulated acquisition value, year-end 2,362 1,951 9,538 9,728 316 284 12,216 11,963

Depreciation, beginning of the year –1,046 –992 –6,864 –6,336 –7,910 –7,328

Depreciation for the year –101 –91 –780 –838 –881 –929

Acquisition of affiliated companies 0 –7 0 –7

Disposals 5 46 1,292 369 1,297 415

Reclassifications 0 0 –17 –25 –17 –25

Translation differences 20 –9 –60 –27 –40 –36

Accumulated depreciation, year-end –1,122 –1,046 –6,429 –6,864 –7,551 –7,910

Impairments, beginning of the year –12 0 –12 0

Impairments for the year –12 0 –12

Accumulated impairments, year-end –12 –12 –12 –12

Closing balance 1,240 905 3,097 2,852 316 284 4,653 4,041

Value assessed for tax purposes (Sweden) 303 306

of which, real estate 74 76

The group holds buildings and machinery through financial lease agreements. For more information on financial and operational leases, see Note 14.

Operational leasesThe group’s leasing charges for the year totaled SEK 1,504m (1,343). At the balance sheet date, the group had outstanding leasing charges of SEK 6,265m (6,838), calculated at the prevailing exchange and interest rates.

The minimum payments for operational leases fall due as follows.

Machinery and equipment Properties

SEKm 2008 2007 2008 2007

Within one year 179 345 1 160 1,153

Between one and five years 259 289 2 905 2,893

Later than five years 31 6 1 732 2,152

Total 469 640 5 797 6,198

The majority of the machinery and equipment put at the group’s disposal through leases is held by Posten Meddelande and consists of machines for the production of Posten’s electronic mail services.

Financial leasesThe payments for financial leases mature as follows.

Minimum leasing

expenses Interest Present value

SEKm 2008 2007 2008 2007 2008 2007

Within one year 144 152 38 30 106 122

Between one and five years 311 393 115 127 196 266

Later than five years 59 26 33

Total 455 604 153 183 302 421

The above table shows minimum leasing expenses as well as the present value and interest on the group’s existing financial leases.

Note 14 Leased machinery and equipment, property leases

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Note 14, cont’d.Financial leasing assetsFinancial leasing assets reported as tangible fixed assets in Note 13 are as follows.

SEKm 2008 2007

Acquisition value


Properties 1,147 1,147

Closing balance 1,265 1,257

Accumulated depreciation

Machinery and equipment –64 –45

Properties –871 –801

Closing balance –935 –846

Book value 330 411

In 2008, leasing expenses for financial leases totaled SEK 158m (161). The maturities of the long-term liabilities attributable to financial leases

are presented in Note 29.The financial leases primarily comprise six processing facilities in Swe-

den, as well as leased vehicles for which Posten is liable for the residual value. See also Note 26, Contingent Liabilities.

Note 15 Financial investmentsSEKm 2008 2007

Financial investments that are fixed assetsFinancial assets reported at fair value through the

income statement

Endowment insurance policy 120 77

Other long-term receivables 12 15

Closing balance 132 92

Current investments that are fixed assetsFinancial assets reported at fair value through the

income statement

Other current investments 1 4

Closing balance 1 4

Note 16 Long-term receivablesSEKm 2008 2007

Reported value related to defined-benefit pension plans appraised in accordance with IAS 19; see also Note 23 1,866 1,707

Of which: surplus value, health insurance 1) 67

Payroll tax receivables attributable to reporting lower pension commitments (in accordance with IAS 19) than amounts recognized in the financial statements for legal entities in Sweden in accordance with UFR 4. 437 414

Payroll tax health insurance1) –149

Deposits, property leases 6 7

Electricity derivatives 8

Closing balance 2,160 2,1361) The reported surplus value in Posten’s insurance association totals SEK 67m. Unreported

surplus value totals SEK 438m. The reported payroll obligation for health insurance is covered by the arising surplus in Posten’s insurance association. The obligation is thus offset in Long-term Receivables and is no longer reported in Other Provisions. See Note, Other Provisions.

Note 17 Deferred tax

2008 SEKm

Balance 1/1/

2008

Reported in income

statement

Acquisition/Divestment

of operations and

translation differences

Balance 12/31/

2008

Deferred tax assetsPension provisions 52 2 54

Provisions, Cashier Service 304 –283 21

Other provisions 590 –61 5 534

Loss carry-forwards 38 12 50

Financial leases 56 –16 –1 39

Offset against liabilities –807 236 –571

Reported deferred tax assets 233 –346 240 127Of which: Sweden 195 77

Outside Sweden 38 50

Deferred tax liabilitiesIntangible fixed assets –242 44 –143 –341

Untaxed reserves –192 –67 –259

Current assets –10 9 –8 –9

Pension provisions –408 –90 –498

Offset against receivables 807 –236 571

Reported deferred tax liabilities –45 –104 –387 –536Of which: Sweden 0 –344

Outside Sweden –45 –192

2007 SEKm

Balance 1/1/

2007

Reported in income

statement

Acquisition/Divestment

of operations

Balance 12/31/

2007

Deferred tax assetsPension provisions 56 –4 52

Provisions, Cashier Service 310 –6 304

Other provisions 613 –21 –2 590

Loss carry-forwards 24 5 9 38

Financial leases 64 –9 1 56

Offset against liabilities –752 –55 –807

Reported deferred tax assets 315 –35 –47 233Of which: Sweden 311 195

Outside Sweden 4 38

Deferred tax liabilitiesIntangible fixed assets –241 15 –16 –242

Tangible fixed assets –152 –40 –192

Current assets –3 –9 2 –10

Pension provisions –359 –49 –408

Offset against receivables 752 55 807

Reported deferred tax liabilities –3 –83 41 –45Of which: Sweden 0 0

Outside Sweden –3 –45

In Sweden receivables and liabilities have been reported net, at SEK 267m (195), whereas other receivables and liabilities have been reported gross. Foreign receivables totaled SEK 50m (38), and foreign payables SEK 192m (45).

Non-reported receivables for deferred tax relating to loss carry-for-wards from previous years totaled SEK 111m (89). SEK 74m pertained to France, SEK 27m to Germany, SEK 1m to Sweden and SEK 9m to other countries. None of these receivables has a due date.

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Note 18 InventorySEKm 2008 2007

Goods for resale, etc. 173 182

Raw materials 102 93


The majority of raw materials and goods for resale in inventory are with Stralfors.

Inventory depreciation for 2008 totaled SEK 2m (1). For 2008, the cost of goods sold totaled SEK 1,734m (1,686).

Note 19 Accounts receivable Accounts receivable are reported taking into account accumulated bad debt expenses of SEK 13m (15) which arose in 2008. During the year, estim ated losses on accounts receivable totaled SEK 5m (1). With respect to accounting management, refer to Note 1 for risk management and to Note 29 for ageing of overdue but non-written-off accounts receivable.

Note 20 Prepaid expenses and accrued incomeSEKm 2008 2007

Accrued interest income 13 15

Accrued postage charges 136 135

Prepaid rent 226 225

Prepaid insurance premiums 18 22

Terminal fees 326 273

Forward currency contracts 6 2

Other items 172 173


Note 21 Cash and cash equivalentsSEKm 2008 2007

Cash and bank balances 2,795 1,949

Short-term investments comparable to cash and cash equivalents 577 2,839

Total according to balance sheets and statements of cash flows 3,372 4,788

Short-term investments are classified as cash and cash equivalents if they are easily convertible into cash and have a maximum maturity of three months from the acquisition date, with minimal risk for value fluctuations.

Note 22 Interest-bearing liabilitiesSEKm 2008 2007

Long-term interest-bearing liabilitiesDebt to credit institutions 225 255

Financial leases 300 430

Other long-term liabilities 7


Current interest-bearing liabilitiesDebt to credit institutions 45 86

Liabilities, payment transfers 146

Financial leases 111 112

Other current liabilities 319


The commercial paper and bond programs have limits of SEK 2,000m and SEK 3,000m, respectively. See Note 29, Financial Risk Management and Financial Instruments.

Note 23 PensionsDefined-benefit pension plans

Liabilities

SEKm 2008 2007

Pension provisionsUnfunded pension plans, future unconditional pension

benefits 1,394 1,033

Other provisionsUnfunded pension plans, future conditional pension

benefits 1,019 1,201

Assets

SEKm 2008 2007

Long-term receivablesReported value related to funded defined-benefit

pension plans appraised in accordance with IAS 19. See Note, Long-term Receivables 1,866 1,707

Posten’s pension plans are described in the Accounting Principles section, Note 1. These plans primarily concern retirements beginning at the age of 65. Some groups are also eligible for pensions starting at age 60 or 63, according to the transition regulations.

In 1997, a corporate pension fund was established to guarantee all pen-sion commitments earned in the group through 1996. The Fund’s bylaws were amended in 2001, enabling the Fund to guarantee pensions regardless of when they were earned. The Pension Fund guarantees the pension com-mitments of Posten AB (publ), Posten Meddelande AB and Posten Logistik AB, and previously guaranteed the commitments of Posten Sverige AB.

In 2008, assets were transferred to the Fund on four occasions, for a total of SEK 567m (682). A refund was received during the year from Posten’s Pension Fund totaling SEK 742m (692).

After deductions for the refund from the Pension Fund to Posten AB (publ), Posten Meddleande AB and Posten Logistik AB, the net assets in Posten’s Pension Fund had a market value of SEK 12,233m (14,157). The assets exceeded the outstanding commitments secured by the Fund by SEK –1,158m (1,261). The commitments secured by the Fund were measured in accordance with the Act on Safeguarding of Pension Commitments; the assets’ market value exceeded those commitments by SEK 280m (2,566).

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Pension commitments and assets under management2008 2007

SEKm

Funded pension

plans

Unfunded pension

plans, future unconditional

pension benefits

Unfunded pension

plans, future conditional

pension benefits Total

Funded pension

plans

Unfunded pension


pension benefits

Unfunded pension



Present value of defined-benefit commitments 14,896 1,455 866 17,217 13,127 1,062 891 15,080

Fair value of assets under management –13,738 –13,738 –14,396 –14,396

Net commitment 1,158 1,455 866 3,479 –1,269 1,062 891 684

Unreported actuarial gains (+) and losses (–) –2,994 –91 153 –2,932 –409 –58 310 –157

Net debt on balance sheet –1,836 1,364 1,019 547 –1,678 1,004 1,201 527Of which: Other provisions 1,019 1,019 1,201 1,201

Pension provisions 30 1,364 1,394 29 1,004 1,033

Long-term receivables –1,866 –1,866 –1,707 –1,707

Net amount attributable to plans in the following countries

Sweden 508 491

France 9 7

Norway 30 29

Total 547 527

Change in present value of commitments2008 2007

SEKm

Funded pension

plans

Unfunded pension


pension benefits

Unfunded pension



Funded pension

plans

Unfunded pension


pension benefits

Unfunded pension



Opening balance 13,127 1,062 891 15,080 12,845 986 1,047 14,878Costs, employment service during current year 306 39 28 373 345 45 30 420

Interest expense 571 39 38 648 509 37 40 586

Contracted pensions 214 379 0 593 259 97 0 356

Payment of benefits –743 –126 0 –869 –724 –109 0 –833

Commitments in Posten’s insurance association 778 778

Transfers 187 12 –199 0 37 13 –50 0

Actuarial gains (–) and losses (+) 462 48 108 618 –149 –7 –176 –332

Exchange rate differences in foreign plans –6 2 –4 5 0 5

Closing balance 14,896 1,455 866 17,217 13,127 1,062 891 15,080

Change in present value of commitments

Funded pension plans

SEKm 2008 2007

Fair value at beginning of the year 14,396 14,010Expected return on assets under management 769 699

Funds paid by employer 567 684

Assets in Posten’s insurance association –743 –724

Actuarial gains (+) and losses (–) 1,283

Exchange rate differences in foreign plans –2,530 –277

Fair value at year-end –4 4

Verkligt värde vid årets slut 13 ,738 14,396

The group expects to make payments in 2009 totaling SEK 910m (860) for defined-benefit plans.

Experienced-based adjustments

SEKm 2008 2007 2006 2005

Present value of defined-benefit commitments 17,217 15,080 14,878 14,081

Assets under management –13,738 –14,396 –14,010 –13,339

Surplus (–) / Deficit (+) 3,479 684 868 742Of which:

Experienced-based

adjustments for commitments 207 –367 –42 127

Experienced-based adjustments for assets under man-agement –2,530 –277 110 540

Note 23, cont’d.

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Provisions in accordance with the transition regulationsAs of December 31, 2008, Posten’s commitments based on the transition regulations, (concerning commitments conditional on employees holding the same position at Posten until age 60/63) totaled SEK 3,082m (3,251), calculated according to the Act on Safeguarding of Pension Commitments. Against this background, the provision regarding the transition regulations is based on 25 percent of the total commitment. Special payroll tax has been taken into consideration. The amount entered as liability totals SEK 957m (1,153). For accounting in accordance with IAS 19, see Future Con-ditional Commitments pursuant to IAS 19 in Note 24,Other Provisions.

Index-linked responsibilityIn 2000, pension commitments previously guaranteed by Posten’s Pension Fund were redeemed through the acquisition of insurance policies. As of

December 31, 2008, the net present value of these was SEK 130m (144). Posten bears index-linking and gross coordination responsibility for these pension commitments.

Final responsibility provisionIn connection with its incorporation in 1994, Posten assumed a “final responsibility” for pensions. Previously, this was reported as a contingent liability. Provisions were made for the commitment in conjunction with the adoption of IAS 19. The correct net present value is difficult to calculate due to the nature of the commitment. Based on available information, the commitment has been estimated at SEK 111m (98) as of December 31, 2008, and includes a provision for special payroll tax. This commitment is included in the balance for future conditional commitments pursuant to IAS 19 under Other Provisions; see also Note 24.

Note 23, cont’d.

Income and expenses for defined benefit and defined contribution pensions

2008 2007

SEKm

Funded pension

plans

Unfunded pension


pension benefits

Unfunded pension



Funded pension

plans

Unfunded pension


pension benefits

Unfunded pension



Costs, employment service during current year 456 66 28 550 524 77 30 6311)

Interest expense 571 39 38 648 509 37 40 586

Expected return on assets under management –769 0 0 –769 –699 0 0 –699

Actuarial gains and losses –67 3 –50 –114 3 3 –16 –10

Early retirement 249 379 0 628 259 97 0 356

Total cost, defined-benefit pension plans 440 487 16 943 596 214 54 864Total cost, defined-contribution pension plans 311 2071)

Total costs 440 487 16 1,254 596 214 54 1,071

Deducted as net financial items 121 113

Utilization of restructuring provision, pension-related costs –509 –351

Total pension costs 866 833

Return on assets under managementReal return on assets under management –1,761 422

Expected return on assets under management –769 –699

Actuarial loss during the period for assets under management –2,530 –277

1) Premiums to Posten’s insurance association for disability pensions have been reclassified as Costs for Employment during the current year.

For further information regarding the Pension Fund’s management of assets, see the following page.

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Note 23, cont’d.

Actuarial assumptionsThe actuarial calculations of Posten’s pension commitments and pension expenses are based on the following assumptions. These assumptions are provided as a total average value for each pension plan. A change in any of these key assumptions may have a significant impact on the projected bene-fit commitments, funding requirements and periodic pension cost.

Actuarial assumptions, fiscal year-end

% 2008 2007 2006 2005

Discount rate 4.10 4.50 4.00 4.00

Expected return on assets under management 5.10 5.50 5.00 5.00

Future annual pay increases 2.80 2.80 2.60 2.50

Change in income base amount 3.00 3.00 2.80 2.75

Inflation 2.00 2.00 1.80 1.75

Life expectancy FFFS 2007:31 FFFS 2007:31 P94 P94

Personnel turnover 6.00 5.00 5.00 5.00

Average remaining employment service, years 10 10 10 10

The costs for 2008 are based on actuarial assumptions adopted at the beginning of 2008. At the end of 2008, Posten adopted assumptions applic-able to calculation of the results as of 31 December, 2008. These actuarial assumptions are also used in the forecast for 2009 costs.

When setting the discount rate, Posten chose the return provided by a Swedish government bond with a duration corresponding to the commit-ments’ estimated duration. This allowed for the long-term, mutual compat-ibility of all assumptions used in the appraisal. The executive management thus takes the view that the discount rate applied reflects the time value of the money and provides a reasonable present value of Posten’s pension commitments. Expected return on assets under management corresponds to the expected average return on current (or future) investments in the Pension Fund, after all costs (including tax). With respect to interest-bear-ing assets, the expected return is based on risk-free market rates of interest; in terms of other assets, expected return is based on assumptions of risk premiums in excess of risk-free interest rates. The risk premiums are based on long-term, historical risk premiums with consideration taken of the assets’ relative risk and covariance. The risk premiums vary between 3% and 8%, depending on the type of asset.

Future annual pay increases reflect expected future salary increases as a compound of inflation, seniority and promotion. The estimate is based on historical data on pay increases. The income base amount is set annually by the Swedish government and is used, among other things, to set a cap on pensionable income in the social security system. With respect to inflation, Posten has chosen to use the Swedish Central Bank’s inflation targets as a basis. Personnel turnover is an aggregate of expected future business devel-opment, increases in real wages and productivity growth needed to main-tain profitability. The average remaining employment service factor is estim ated based on employees’ current age breakdown.

AlectaRetirement and family pension plans for salaried employees in Sweden are insured by Alecta. According to a pronouncement by the Swedish Financial Reporting Board, UFR 3 (previously URA 42), this is a defined-benefit plan that encompasses several employers. For fiscal 2008, the company has not had access to information enabling the reporting of this plan as a defined-benefit pension plan. The ITP pension plan insured by Alecta is therefore reported as a defined-contribution plan. Pension insurance fees related to

Alecta totaled SEK 6.8m (6.9) for 2008. Anticipated fees for 2009 total SEK 4.6m (-). As of September 2008, Alecta’s surplus in the form of the collective consolidation level was 112.0% (152.0%). The collective consol-idation level equals the market value of Alecta’s assets divided by total insurance commitments and calculated in accordance with Alecta’s actu-arial assumptions, which do not comply with IAS 19.

Assets under managementPosten’s Pension Fund asset allocation

2008 2007

Asset class at market value, SEKm Dec 31 % Dec 31 %

Index-linked bonds 4,338 35 4,532 32

Other interest-bearing assets 1,097 9 2,200 16

Total interest-bearing assets 5,435 44 6,732 48

Property 1,428 12 1,064 7

Infrastructure 611 5 176 1

Private equity 349 3 225 2

Stocks 1,889 15 3,357 24

Hedge funds 2,521 21 2,603 18

Total other assets 6,798 56 7,425 52

Total assets 12,233 100 14,157 100

The greatest portion of assets under management is included in Posten’s Pension Fund. Other assets under management consist of assets in Posten’s insurance association, pension insurance at Skandia and assets under man-agement related to Norwegian pension plans.

The asset allocation of Posten’s Pension Fund at December 31, 2008 is presented in the table above. The overriding objective of the Fund is to manage the assets so as to best serve the Posten Group’s pension commit-ments, the funds for which have been entrusted to the Fund. The composi-tion of and return on the assets should serve as reassurance that Posten can meet the pension commitments guaranteed by the Fund. The Fund’s stra-tegic asset allocation is based on an expected risk/return profile and on mutual covariance with the objective that the degree of consolidation should be at least 100% (according to the regulations of the Swedish Financial Supervisory Authority). The actual asset allocation is permitted to deviate from the strategic allocation within fixed parameters. The 2008 net return, less all costs and taxes, was -12.3% (3.2). Posten’s Pension Fund directly manages interest-bearing assets, while other assets are managed by external parties. The interest-bearing assets consist of cash and cash equiv-alents as well as interest-bearing securities denominated in SEK, issued by the Swedish Government or by companies with high credit ratings. Invest-ments in equities totaled 15% of assets at year-end 2008. Of these equities, approximately 30% were Swedish and 70% were foreign. Investments in infrastructure, property and private equity are made through funds in which Posten’s Pension Fund agrees to invest up to a certain amount and where capital is called and paid as the funds make investments and/or as fees are exacted by the managers. Investments in foreign assets with fixed return targets (infrastructure, property, private equity and hedge funds) have largely been hedged against foreign exchange fluctuations, as have many of the foreign equities.

Sensitivity analysisAt year-end 2008, Posten had pension commitments of SEK 17,217m and assets under management of SEK 13,738m. Posten’s pension commitments are valued based on the above-referenced actuarial assumptions; assets under management are assessed at fair value.

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Actuarial assumptionsChanges in pension commitments due to changed actuarial commitments are treated as actuarial profit or loss. These profits and losses have no effect on the income statement or balance sheet unless and until the net value exceeds the corridor’s marginal value. The corridor’s marginal value is 10% of the pension commitment or the fair value of assets under manage-ment, whichever is greater. To the extent that the changes cause effects exceeding the corridor’s marginal value, the excess values are reported as income or cost. However, in these cases the impact on the income statement first appears in the entry of forecasted costs/income pursuant to IAS the fol-lowing year. See also the table below for the impact on earnings of changed actuarial commitments.

Exercise of rights under the transition regulationsA provision of 25% of total commitments is made pursuant to the transi-tion regulations. This number is based on the historical degree to which rights under the regulations are exercised. The special payroll tax has also been taken into account. Change in the commitment pursuant to the transi-tion regulations and due to different levels of exercise of rights is reported as income or cost. See the table below for the effect on earnings of changed levels of exercise of rights under the transition regulations.

Special payroll tax upon any under-consolidation in Posten’s Pension FundPension commitments secured by provisions to Posten’s Pension Fund are calculated pursuant to the Act on Safeguarding Pension Commitments and recommendations issued by the Swedish Financial Supervisory Authority. According to the pension plan, the commitment must be fully secured at all times. If the Pension Fund’s assets fall below the pension commitments’ total capital value according to the Act on Safeguarding Pension Commit-ments, Posten must supplement the security. Such security constitutes a non-deductible pension cost and is charged with a special payroll tax. See the table below for the effect on earnings of payroll tax in the event of any under-consolidation.

Sensitivity analysis

SEKm ChangeEffect on earnings

Actuarial commitmentsChange in interest margin on pension

liabilities 1) +0.1 percentage point 12

–0.1 percentage point –12

Change in discount rate and expected return on assets under management +0.5 percentage point 158

–0.5 percentage point –176

+0.5 percentage point –124

Change in salaries and wages –0.5 percentage point 92

+0.5 percentage point 26

Change in income base amount –0.5 percentage point –44

+0.5 percentage point –126

Change in inflation –0.5 percentage point 108

Level of exercise of rights under transition regulations

Change in level of exercise of rights under transition regulations +5.0 percentage point –23

–5.0 percentage point 18

Under-consolidation in Posten’s Pension Fund

Special payroll tax in the event of under-consolidation in Posten’s Pension Fund –1 percentage point –29

1) The interest margin on pension liabilities is the difference between the discount rate commitment on pension liabilities and yield expectations on assets under management in percentage points.

Note 23, cont’d.

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Note 24 Other provisionsChanges for the year

2008, SEKmOpening balance Provisions Reversals Utilizations

Closing balance

Closure of Cashier Service 1,089 –3501) –660 79

Restructuring activities 333 6311) –381) –311 615Of which: Personnel reductions 307 617 –38 –285 601

Other closure costs 26 14 –26 14

Future conditional pension benefits 1,500 21 –84 –1714) 1,266Of which: Payroll tax 299 4 –16 –40 247

Future conditional pension benefits under IAS 19; see Note, Pensions 1,201 17 –68 –131 1,019

Payroll tax, health insurance 149 –1493)

Other 376 18 –811) –68 245Of which: Job-related injuries 77 3 –3 77

Other group reserves 250 141) –80 –31 153

Other provisions 49 11) –1 –34 15

Total 3,447 670 –702 –1,2102) 2,205Of which short-term 1,478 692

Changes for the year

2007, SEKmOpening balance Provisions Reversals Utilizations

Closing balance

Closure of Cashier Service 1,109 1305) –150 1,089

Restructuring activities 532 2615) –335) –427 333Of which: Personnel reductions 450 261 –33 –371 307

Other closure costs 82 –56 26

Future conditional pension benefits 1,496 67 –634) 1,500Of which: Payroll tax 298 13 –12 299

Future conditional pension benefits under IAS 19; see Note, Pensions 1,198 54 –51 1,201

Payroll tax, health insurance 155 –6 149

Other 377 161 –825) –80 376Of which: Job-related injuries 102 4 –29 77

Other group reserves 236 1255) –82 –29 250

Other provisions 39 325) –22 49

Total 3,669 619 –115 –7266) 3,447Of which short-term 574 1,4781) Other Costs in the 2008 income statement includes provisions of SEK 177m. See Note, Other Costs.2) Change in other income statement items total SEK 1,210m, SEK 616m of which is attributable to personnel costs and SEK 24m to financial items.3) A surplus has accrued in Posten’s insurance association. The commitment is therefore no longer reported in Other Provisions but rather net reported in Long-term Receivables. See Note, Long-term

Receivables.4) Changes have not been reported in the income statement in accordance with IAS 19.5) Other Costs in the 2007 income statement includes provisions of SEK 431m. See Note, Other Costs.6) Changes in other income statement items total SEK 726m, SEK 538m of which is attributable to personnel costs and SEK 16m to financial items.

Expected payments

SEKm 1 year 2 years 3 years <3 years

Provisions, Cashier Service 70 9

Provisions, restructuring 556 59

Provisions, future conditional pension benefits7) 250 75 73 678

Other provisions7) 74 105 16 75

Total 950 248 89 7537) Expected payments are somewhat higher than respective commitments, due to the fact that

the commitment is calculated as the present value of the expected payments.

Expected payments for future conditional pension benefits are calculated according to IAS 19. Provisions for payroll tax for health insurance are not reported among the expected payments.

Present valueProvisions with payment periods longer than one year are discounted to the present value. Discount effects included in changes for the year are shown separately where significant. Provisions for future conditional pen-sion benefits have payment periods longer than one year. Present value cal-culations are not shown separately for this provision item, as it is included under IAS 19 (Compensation to Employees). See Note 23, Pensions.

Expected payments for provisionsStated amounts correspond to the estimated result that forms the basis for calculating the size of the provision but cannot be deemed to reflect real, total payment flows, as certain costs do not correspond to any payments. Such costs include some costs related to personnel cutbacks.

Provisions, Cashier ServiceThe Cashier Service fulfilled Posten’s commission from the government to offer nationwide financial transaction services. The commission was termin-ated as of December 31, 2008 pursuant to a 2007 parliamentary decision.

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The Cashier Service was closed in accordance with the plan submitted to the Post and Telecom Agency on October 1, 2007. All cashier offices were closed as of December 31, 2008.

Posten allocated resources to finance closure costs. At year-end 2008 this provision totaled SEK 79m and will be applied to closure costs for per-sonnel and premises during 2009.

Provisions, restructuringIn 2008, restructuring provisions were attributable mainly to early retire-ment.

New provisions are charged to the business segment that decides on closure.

Provisions, payroll tax for health insurancePosten insures its sick leave commitments through Posten’s insurance asso-ciation. In connection with the adoption of IAS 19, provisions were made for payroll tax concerning health insurance. The accrued surplus in Pos-ten’s insurance association covers payroll tax commitments which are cur-rently reported net in Long-term Receivables and which are no longer reported in Other Provisions. See also Note, Other Provisions.

Provisions, estimated future conditional pensionsPosten is responsible for future conditional pension benefits under the trans-ition regulations. The transition regulations apply to certain employees who are entitled to retire at the age of 60 or 63. To qualify, employees must have reached 28 years of age by January 1, 1992 and have held the same position at Posten since then. The amounts have been reported as a liability at 25 percent of the outstanding commitment plus special payroll tax. The gross commitment, excluding payroll tax, totals SEK 3,082m (3,251).

In connection with its incorporation in 1994, Posten assumed responsi-bility for pensions, for which provisions have been made. See paragraph Final Responsibility Provision under Note 23.

Other provisionsProvisions for job-related injuries and miscellaneous reserves reported by Posten Group companies appear under this heading.

Among other things, reversals of provisions totaling SEK 80m were made during the year for early termination of agreements.

Job-related injuriesThe Workers’ Compensation Act (LAF; 1976:38) came into force on July 1, 1977. Workers’ compensation is administrated by the Swedish social insur-ance office. Worker’s compensation benefits are disbursed in the form of a personal annuity or a beneficiary annuity in the case of a fatality.

Beginning with and including the month in which the injured worker turns 65, the annuity is reduced to 65 percent of the previous amount. Compensation for injuries predating July 1, 1977 may be paid out in the form of a workers’ compensation annuity, as specified by law (1954:243). At year-end 2008, the liability was estimated at SEK 77m.

Note 25 Accrued expenses and prepaid incomeSEKm 2008 2007

Provision for stamps sold but unutilized 210 202

Accrued payroll expenses 321 330

Vacation pay liability 615 617

Special payroll tax on pension costs 4 10

Social security expenses 396 394

Tax on returns 1

Accrued interest expense 1 1

Mail processing facility fees 297 241

Financial leasing 20 20


Other items 549 719


Note 26 Assets pledged and contingent liabilities

SEKm2008

Dec 312007

Dec 31

Assets pledgedReal estate mortgages 2

Endowment insurance policy for current and previous employees 120 109

Assets pledged as securities 45 27

Total 167 136

Contingent liabilitiesGuarantee commitment, FPG 88 80

Residual value commitment, real estate lease1) 0 18

Other guarantees 9 16

Total 97 114

Contingent assetsFinal dividend in bankruptcy, Njord 20

Total 201) Attributable to the Malmö mail processing facility. The contingent liability arises from

Posten’s obligation to cover 90 percent of the property’s resale value that is less than SEK 190m, upon expiration of the contract. The current market value is estimated at SEK 210m, so Posten’s current obligation is SEK 0.

Note 27 Investment commitmentsAs of December 31, 2008 Posten had committed to acquire tangible fixed assets totaling SEK 115 (199). These commitments relate primarily to investment in sorting equipment and vehicles.

Note 28 Statements of cash flowsCash and cash equivalentsShort-term investments are classified as cash and cash equivalents if they are easily convertible into cash, entail minimal risk of value fluctuations and mature no later than three months from the acquisition date. See also Note 21, Cash and Cash Equivalents.

Interest paid and receivedCash flows from operating activities include the following amounts of interest paid and received.

SEKm 2008 2007

Interest received 172 160

Interest paid –83 –92

Acquisition/Sale of affiliated companies and other business units

2008 2007

SEKm Acquisition Sale Acquisition Sale

Fixed assets –1,452 32 –236 28

Receivables –198 13 –64 108

Cash and cash equivalents –32 –4 5

Other liabilities and provisions 381 –8 91 –34

Capital gains on divested affiliated companies 65 22

Purchase price paid/received –1,301 102 –213 129

Cash and cash equivalents, acquired affiliated companies 32 4

Cash and cash equivalents, divested affiliated companies –5

Net effect on cash flows –1,269 102 –209 124

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Note 29 Financial risk management and financial instruments

The group’s Treasury Policy, adopted by the Board of Directors, governs Posten’s financial risk management activities. The Treasury Policy estab-lishes the criteria for liquidity management, the raising of capital and finan-cial risk management. A unit in the parent company performs treasury management for the entire group, and is responsible for group companies’ external bank relationships, liquidity management, net financial income/expenses, interest-bearing assets and liabilities and for group-wide pay-ment solutions and financial risk management. Subsidiaries are responsible for identifying as well as reporting and following up on financial risks that arise in their operating activities. Subsidiaries have specifically formulated instructions for this purpose.

Policies and principles for managing financial transactions and risksObjectives and principles for financial risk managementThe objectives for financial risk management are to maintain appropriate liquidity, to ensure the efficient use of capital and to guarantee the raising of capital in the medium and long term. The principles applied to manage financial risks are as follows. Financial risks to which the group is exposed in its operations must be •

kept within the constraints set for credit risk, market risk and refinanc-ing risk. The Treasury Policy does not permit speculative trading in any risk management operation.

All credit granted must be based on business analyses which take into •account financing costs as well as risk. Credit must not be granted until the debtor’s creditworthiness has been assessed and approved.

The group’s treasury management and credit operations, including •internal control and reporting functions, shall be organized so as to minimize administrative risk. These operations also follow up on sub-sidiaries’ monthly reports.

Raising capitalThe group’s financing needs are met in part through bilateral agreements with banks and credit institutions, in part through financing programs such as the Commercial Paper Program and the Medium Term Note (MTN) program. The Commercial Paper Program has a frame amount of SEK 2,000m •

and is used for short-term financing. As of December 31, 2008, three commercial paper was outstanding.

The MTN program has a frame amount of SEK 3,000m and is used for •medium-and long-term financing. As of December 31, 2008, no deben-tures were outstanding under the MTN program.

Current bilateral loan agreements with banks and credit institutions fea-ture standard limits on key financials focusing on the consolidated income statements and balance sheets. A detailed list of interest-bearing liabilities is shown in Note 22, Interest-bearing Liabilities.

Financial risksThe group’s exposure to financial risks is limited by constraints stipulated in the Treasury Policy. Posten divides financial risks into four categories: refinancing risk, credit risk, liquidity risk and market risk.

Refinancing riskRefinancing risk is the risk that cash and cash equivalents will not be avail-able and that financing will be partly or wholly unobtainable or obtainable only at substantially increased cost.

Posten mitigates refinancing risk by constantly maintaining payment adequacy above a fixed minimum level and by diversifying the maturity structure of its financing portfolio.

The group shall ensure the following payment adequacy: At least SEK 1,000m shall be available within a maximum of 5 business •

days.Payment adequacy is defined as the sum of cash and cash equivalents, investments in liquid instruments that mature within 3 months of acquisi-tion, unutilized confirmed loan facilities and projected cash flows less maturing loans.

Liquidity riskLiquidity risk is the risk that a company will have difficulty fulfilling its obligations arising from financial liabilities. Liquidity risk is mitigated through investment in liquid instruments and bank deposits. This enables the group to maintain payment adequacy that is sufficient to handle turbu-lence in capital and money markets as well as unforeseen requirements at operating units. Investments in interest-bearing instruments usually have maturities shorter than 90 days and are reported as cash and cash equiva-lents. As of December 31, 2008, cash and cash equivalents totaled SEK 3,372m (4,788) for the group and SEK 3,088m (4,038) for Posten AB.

Credit riskCredit risk refers to credit-approved debtors who cannot meet their pay-ment obligations on time, partially, or at all. Credit risk also refers to the risk that, in cases of insolvency, the security or collateral pledged does not cover the debt amount.

Credit risk in financial operationsPosten limits the credit risk on financial transactions by depositing surplus liquidity in a bank or investing it in interest-bearing instruments with high credit ratings. Trading is also constrained by caps set for each debtor based on the debtor’s Standard & Poor rating (or other comparable official rat-ing) and on duration. Each counterparty must undergo a credit check before qualifying as a debtor. In 2008 there were no credit losses in connec-tion with investing activities.

Credit risk from sales to customersCredit risk in credit sales to customers is limited by spreading the risk across numerous customers in various industries. All customers undergo a credit check in which data on a customer’s financial position is obtained from a credit-rating agency. Of the SEK 3,268m (3,299) total consolidated accounts receivable, Posten AB accounts for SEK 10m (21). In 2008, accu-mulated bad debt expenses were SEK 12m (15) for the group and SEK 1m (6) for Posten AB.

Ageing of accounts receivable 2008 2007

Accounts receivable, undue 2,772 2,581

Accounts receivable, due, not impaired:

>30 days 429 565

31–60 days 42 35

61–90 days 8 100

<90 days 51 49

Total 3,302 3,330

Provision for bad debts –34 –31

Total 3,268 3,299

Market riskMarket risk is the risk that changes in market prices will affect the fair value or cash flow of a financial instrument. There are three types of market risk: currency risk, interest-rate risk and price risk for electricity and fuel.

Currency riskPosten is exposed to various currency risks. First and foremost, loans and investments can be denominated in foreign currencies. Currency risk also arises to some degree through foreign exchange flows with suppliers and customers. This risk is usually categorized as a transaction exposure which may affect the group’s net earnings. The total transaction exposure for the group may not exceed the equivalent of SEK 450m and no single currency may constitute more than 60% of the total exposure. The total transaction exposure as of December 31, 2008 was SEK 69m (73). To reduce exposure to currency risk, forward contracts are used. Exchange rate profit/loss in operating income/expense totaled SEK 5m (-2) in 2008. Exchange rate profit/loss in net interest income/expense totaled SEK 25m (-5) in 2008. If the relationship of the SEK to foreign currencies changes by +/- 10%, the impact on equity will be +/- SEK 34m.

Translation exposureForeign net assets are exposed to exchange rate fluctuations. Posten is exposed to currency risk through its foreign subsidiaries, a risk referred to

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Financial assets and liabilities, effective interest rates and maturity structure

2008 2007

Nominal amount in millions,

local currency

Effective interest,

%

< 3 months,

SEKm

3 months – 1 year,

SEKm

1–5 years, SEKm

> 5 years, SEKm

Total, SEKm

< 3 months,

SEKm

3 months – 1 year,

SEKm

1–5 years, SEKm

> 5 years, SEKm

Total, SEKm

INVESTMENTSCommercial paper, SEK 580 2.01% 577 577 0 0 0 0

Deposits, SEK 0 2, 777 – – 2,777

Treasury bills, SEK 0 90 – – 90

Total investments 580 577 – – – 577 2,867 0 0 2,867

LIABILITIESCommercial paper, SEK 315 3.17% 314 314

Bank loansSEK, variable interest rate 164 2.80% 27 137 164 27 136 27 190

USD, variable interest rate 14 2.74% 18 88 106 15 73 15 103

SEK, variable interest rate 0 0 1 1

DKK, variable interest rate 27 27

Other loans, SEKReal estate credit 0.6 5.20% 0.01 0.03 0.24 0.32 0.6

Financial leases 411 111 243 57 411 112 148 281 541

Liabilities, payment transfers 0 146 – – 146

Other liabilities 0 21 21

Total liabilities 996 1,029

Note 29, cont’d.

Price risk for electricityManagement of this risk is intended to minimize the short-term effects on earnings of fluctuations in the price of electricity. Posten manages electric-ity price risk using electricity derivatives based on three-year usage fore-casts. If the price of electricity changes by +/- 1 percentage point, the impact on earnings is SEK 1m (1).

Year of expiration, electricity derivatives

Electricity Forecast, GWhProportion hedged, % Price, öre/kWh

Year 2009 128 91 45.02

Year 2010 128 66 46.37

Year 2011 128 34 48.13

The forecast is based on usage forecasts for the group’s Swedish companies.

Financial instrumentsFair valueOfficial market quotes on the balance sheet date, without deducting transac-tion costs, are used to ascertain fair value. If market quotes are unavailable, the

government borrowing rate at December 31, plus a relevant interest spread to reflect credit risk in the instrument, is used.

The fair value of derivatives (forward contracts related to electricity, foreign currency and fuel) is based on official market quotes. If market quotes are unavailable, straight interpolation is used. Concerning the impact of interpolation on earnings, see Note 9, Net Financial Items.

The fair value of loans is based on future cash flows of principal and interest, discounted at the current interest rate on loans.

For accounts receivable and accounts payable with a credit period of less than one year remaining, the book value is considered to reflect fair value. Accounts receivable and accounts payable with a remaining useful life of more than one year are discounted while the fair value is being ascertained.

Amortized costThe amortized cost is determined based on the effective interest rate cal-culated at the acquisition date. Thus surplus and deficit values as well as direct transaction costs are distributed over the instrument’s duration.

as “translation exposure.” Translation exposure arises when a subsidiary’s income statements and balance sheets are translated into SEK for the con-solidated accounts. The greatest amount of translation exposure relates to NOK, EUR and DKK.

Posten Group has elected not to hedge translation exposure, as its effect on Posten is immaterial.

2008 2007

Currency SEKm % SEKm %

CHF 79 1 86 1

DKK 797 5 496 4

EUR 826 5 692 5

GBP 195 1 180 1

HKD –1 0 –2 0

NOK 1,463 9 579 4

SEK 13,070 79 11,627 85

SGD –8 0 –4 0

USD 29 0 28 0

Total 16,450 100 13,682 100

Interest rate riskInterest rate risk is the risk that the market value of fixed-rate financial instruments will fluctuate due to changes in the market interest rate. Posten measures interest rate risk as the change in value of all interest-bearing assets and liabilities if the market interest rate for all relevant maturities changes +/- 1%. Interest rate risk in the group’s interest-bearing receivables and liabilities was SEK 0m (4) as of December 31, 2008. The effect on earn-ings of +/- 1% of the market rate as of the end of December 2008 was SEK 18m (28). The group holds a SEK 269m (293) bank loan from the Euro-pean International Bank (EIB) with a 3-month variable interest rate. Upon a 1 percentage point change in the market interest rate for all relevant durations, the price risk in the group’s total investment and financing port-folios (excluding the facilities portfolio), if greater than SEK 10m, may not exceed 1% of the portfolios’ total value (i.e., net liabilities expressed in Swedish crowns), or a maximum of SEK 50m.

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Note 29, cont’d.

Fair value and reported value are recognized in the balance sheet as follows::

2008 Posten Group

Financial assets reported at

fair value in the income statement

Loans and accounts

receivable

Held to maturity

investments

Availableforsale

financial assets

Financial liabilities reported at


Other liabilities

Total reported

valueFair

value

Financial investmentsEndowment insurance policy 120 120 120

Other 12 12 12

Long-term receivables Deposit, property leases 6 6 6

Accounts receivableAccounts receivable 3,268 3,268 3,268

Prepaid expenses and accrued income

Forward currency contracts 6 6 6

Other receivablesElectricity derivatives 3 3 3

Short-term investments1)

Other 1 1 1

Cash and cash equivalents2)

Commercial paper 577 577 577

Cash 2,795 2,795 2,795

Total 706 6,069 12 1 6,788 6,788

Long-term interest-bearing liabilities

Financial leases 300 300 300

Electricity derivatives 7 7 7

Debt to credit institutions 225 225 214

Accrued expenses and prepaid income


Short-term interest-bearing liabilities


Commercial paper 314 314 314

Electricity derivatives 1 1 1


Other liabilities Accounts payable 1,504 1,504 1,504

Total 330 2,185 2,515 2,504

Reported gains/losses 5 1) “Short-term investments” are investments that mature within 3–12 months.2) “Cash and cash equivalents” are investments that mature in less than 3 months.

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Note 29, cont’d.

2007 Posten Group

Financial assets reported at


Loans and accounts

receivable

Held to maturity

investments

Availableforsale

financial assets

Financial liabilities reported at


Other liabilities

Total reported

valueFair

value


Other 15 15 15

Long-term receivablesElectricity derivatives 8 8 8

Deposit, property leases 7 7 7

Accounts receivableAccounts receivable 3,299 3,299 3,299



Other receivablesElectricity derivatives 11 11 11

Fuel derivatives 1 1 1

Short-term investments1)

Other 4 4 4

Cash and cash equivalents2)

Treasury bills 89 89 89

Deposits 2,750 2,750 2,750

Cash 1,949 1,949 1,949

Total 188 5,255 15 2,754 8,212 8,212






Short-term interest-bearing liabilities



Liabilities in payment transfers 146 146 146

Other liabilitiesForward currency contracts

Accounts payable 1,516 1,516 1,516

Total 2 2,545 2,547 2,465

Reported gains/losses 191) “Short-term investments” are investments that mature within 3–12 months.2) “Cash and cash equivalents” are investments that mature in less than 3 months.

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Note 30 Transactions with associated partiesAffiliated companiesAffiliated companies provide products and services to one another in accordance with the full costing principle, except for services included in Posten’s service range, for which market rates and terms apply. Intra-group sales totaled SEK 8,528m (8,423). For a list of the parent company’s hold-ings in affiliated companies and joint ventures, see Notes 15 and 16 to the parent company’s financial statements.

Swedish statePosten AB (publ) is wholly-owned by the Swedish state. The Posten group’s range of services is provided to state-owned companies and agencies on conventional commercial terms. Correspondingly, Posten purchases services from state-owned agencies and companies at market rates and conventional commercial terms. Neither the state nor its agencies or companies are indi-vidually responsible for a significant portion of Posten’s net sales.

Posten has been mandated by the Swedish state to provide universal mail services in accordance with the Postal Services Act.

Like other postal operators in Sweden, Posten requires a permit to pro-vide postal services. In 2008 the National Post and Telecom Agency (PTS) received SEK 15m (15) from Posten as payment for this permit. Posten has also paid SEK 6m (7) to PTS for handling dead letters.

In 2008, the PTS appropriated SEK 30m (35) to Posten for physical dis-ability compensation, corresponding to full cost. Of that total, SEK 25m (29) is compensation for Braille or audio recordings sent to and from the visually impaired. The remaining SEK 5m (6) concerns compensation for special service provided by rural letter carriers to senior citizens and the physically disabled living in sparsely populated areas.

Under the Essential Financial Transaction Services Act, Posten provided nationwide essential financial transaction services, enabling people to make and receive payments at equitable value. Through the end of 2008, Posten fulfilled its commission through its wholly-owned subsidiary, Svensk Kassa-service AB. No compensation was provided from the government to sup-port the provision of services in commercially unviable areas lacking suit-able alternatives (in 2007, SEK 400m was disbursed for this purpose).

Other organizationsPosten’s insurance association is a freestanding support fund monitored by the Swedish Financial Supervisory Authority. The association insures Pos-ten’s commitments regarding employee disability and family pensions in accordance with ITP-P. In 2008, Posten paid premiums of SEK 211m (241) to the insurance association and received compensation totaling SEK 12m (13). Other compensation from the insurance association was paid directly to beneficiaries, and payroll tax for disability pensions was paid by the association.

Posten’s Pension Fund leases premises in property owned by Posten AB’s subsidiary, Fastighets AB Kvasten 8. Annual rent amounts to SEK 0.7m (0.6). For Posten’s other interaction within Posten’s Pension Fund, see Note 23.

ExecutivesFor information on compensation and benefits paid to executives and Board directors, see Note 5, Employees and Personnel Costs. Viveca Berg-stedt Sten is a member of Posten’s executive management, and her husband is CEO of the property management company GE Real Estate. During 2008, Posten rented premises from GE Real Estate for a value of SEK 5m (23).

Note 31 Acquisitions and divestments of operations

AcquisitionsTollpost Globe ASAs of March 11, 2008, Posten acquired the outstanding 50% of the shares in Tollpost Globe AS. Cash paid for the shares totaled SEK 1,278m, with a net effect of SEK 1,246m. Tollpost Globe is a strong brand in the Norwe-gian logistics market. The company has 935 employees, sales of approxi-

mately NOK 2,400m, and nationwide distribution in Norway based on its own infrastructure. Tollpost Globe cooperates extensively with Posten and DSV on cross-border parcel and pallet services to and from Norway. The newly-acquired portion of Tollpost Globe AS contributed SEK 65m to the year’s net earnings, excluding amortization on surplus values on immate-rial and material fixed assets. If the acquisition had taken place as of Janu-ary 1, 2008 (under identical conditions), the Posten Group’s net sales would have been SEK 31,085m, and net earnings would have been SEK 1,513m. Tollpost Globe AS reported net sales for Jan-Dec 2008 of SEK 3,114m (2,744) and net earnings of SEK 157m (110). Surplus value of fixed assets (excluding goodwill) has been amortized by SEK 35m due to the acquisition of Tollpost Globe AS. If the acquisition had taken place as of January 1, 2008, the amortization would have totaled SEK 42m. For brand and customer relations, an amortization period of 10 years is applied and for buildings, 33 years. Goodwill is included in the acquisition of Toll-post Globe AS in addition to the acquired customer relations and brand. Goodwill consists of synergy effects, improved earnings potential and addi-tional competence and skills.

Stralfors Gzella Sp. zo.oAt May 30, 2008, a printing business in Laskowice, Poland, was acquired. The printing operations employ over 100 persons and have annual sales of roughly SEK 50m. The purchase price was SEK 23m, SEK 17m of which has been paid.

Tidningstorget ABPosten AB founded the company Tidningstorget AB together with the Swedish Magazine Publishers Association, a trade association. Posten’s holding is 90%.

DivestmentsPayment transaction servicesStralfors sold its payment transaction operations to Payment Business Ser-vice PBS A/S. The agreement specifies that the portion of Stralfors’ business operation in Information Logistics, which refers to transaction services, was taken over by PBS at September 30, 2008. The sale resulted in a capital gain of SEK 65m for the Stralfors business segment. Consideration received totaled SEK 102m.

Acquisitions and divestments had the following effects on Posten’s assets and liabilities

2008 2007

SEKmAcquisition

Divestment Total

Acquisition

Divestment Total

Brands 167 167

Customer relations 186 186 68 68

Other fixed assets 476 –32 444 61 –28 33

Current assets 230 –13 217 68 –108 –40

TOTAL ASSETS 1,059 –45 1,014 197 –136 61

TOTAL LIABILITIES 380 –8 372 91 –34 57

NET ASSETS 679 –37 642 106 –102 4

Capital gain divested operations/group companies –65 –65 –22 –22

Goodwill on acquisition 622 622 107 107

Purchase price paid/received –1,301 102 –1,199 –213 129 –84

Cash and cash equivalents (acquired/divested) 32 32 4 –5 –1

Net effect on cash and cash equivalents –1,269 102 –1,167 –209 124 –85

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Note 32 Key events after the close of the fiscal year

The Swedish Ministry of Enterprise, Energy and Communications announced on February 2, 2009 their signing of the final agreement for the merger of Posten AB and Post Danmark A/S. The next step is formal approval by the Danish Parliament’s finance committee and examination of the merger by the applicable competition authorities.

The new company will have annual sales of approximately SEK 45 bil-lion and over 50,000 employees. The Swedish state will own approxi-mately 60 percent of the new company’s equity and the Danish state 40 percent, with votes allocated 50/50 between them. Upon completion of the merger, Posten will pay out an extraordinary dividend of SEK 1,400m to the Swedish state. CVC will not be an owner in the new company, which will be headquartered in Solna, Sweden.

The letter of intent for the merger of Posten and Post Danmark was signed on April 1, 2008. The merger was approved by the Swedish Parlia-ment on June 18 and by the Danish Parliament on June 12. The primary incentive for the merger is the enhanced competitiveness of the new com-pany in meeting the market’s increasing challenges, thus ensuring condi-tions favorable to maintaining a first-class mail and parcel service in both countries and the possibility to continue to reach all businesses and house-holds.

The new company will be organized in a structure with specialized busi-ness units in accordance with the structure used by Posten since January 1, 2007. The traditional postal operations in each country will be run by busi-ness units within a legal framework of national companies. The logistics operations will be gathered in a joint business unit. The information logis-tics and graphic operations will also be coordinated in the new company. In addition to these four business units, the new company will have group functions and shared service units.

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75f i n a n c i a l r e v i e w · pa r e nt co m pa n y

Financial review, parent companyParent companyThe operations in Posten AB (publ) comprise the corporate man-agement functions and shared service units.

Net sales and earningsNet sales for the period totaled SEK 2,033m (2,123), and earnings after financial items were SEK 1,157m (–164). Stronger earnings were chiefly attributable to SEK 919m (38) in dividends from sub-sidiaries and also to the SEK 660m (150) utilization of provisions associated with the closure of the Cashier Service. Earnings after tax totaled SEK 1,010m (–47).

Financial position and cash flowTotal assets amounted to SEK 15,878m (14,816), up SEK 1,062m.

Cash flows from operating activities totaled SEK 377m (–3,031), of which SEK 47m (–1,989) related to operating earn-ings after adjusting for non-cash items and SEK 330m (–1,042) related to changes in working capital.

In 2008, cash flows from investing activities totaled SEK –3,154m (–928), SEK –43m (–50) of which was attributable to investments in tangible fixed assets and SEK –1,884m (–202) to investments in financial fixed assets. Cash flows from financing activities equaled SEK 1,827m (4,807) and cash and cash equivalents totaled 3,088m (4,038) at year-end.

In March, the outstanding 50% of Tollpost Globe AS was acquired; see Note 31 for the group.

EmployeesThe average number of employees in the parent company’s execu-tive management functions and shared service units totaled 581 (709). The decrease is primarily attributable to the outsourcing of the group’s finance administration to Mirror Accounting AB in November 2007. Posten AB’s management of the group’s out-placement program included an average of 307 (396) employees. The decrease is due to employees previously included in the group’s winding-up measures having now terminated their employment with Posten. All in all, the average number of Posten AB employees totaled 888 (1,105).

Sickness absenteeism was 2.4 (3.9)% of work hours; the 2008 target was 3.2 (4.4)%. The employee satisfaction index (ViP) equaled 79 (75)%; the target was 75 (73)%.

Risks and uncertaintiesSee the Posten Group’s Financial Review.

Key events after the close of the periodThe Swedish Ministry of Enterprise, Energy and Communications announced on February 2, 2009 their signing of the final agree-ment for the merger of Posten AB and Post Danmark A/S. The next step is formal approval by the Danish Parliament’s finance committee and examination of the merger by the applicable com-petition authorities.

The new company will have annual sales of approximately SEK 45 billion and over 50,000 employees. The Swedish state will own approximately 60 percent of the new company’s equity and Danish state 40 percent, with votes allocated 50/50 between them. Upon completion of the merger, Posten will pay out an additional dividend of SEK 1,400m to the Swedish state. CVC will not be an owner in the new company, which will be headquartered in Solna.

The letter of intent for the merger of Posten and Post Danmark was signed on April 1, 2008. The merger was approved by the Swedish Parliament on June 18 and by the Danish Parliament on June 12. The primary incentive for the merger is the enhanced competitiveness of the new company in meeting the market’s increasing challenges, thus ensuring conditions favorable to main-taining a first-class mail and parcel service in both countries and the possibility to continue to reach all businesses and households.

The new company will be organized in a structure with special-ized business units in accordance with the structure used by Pos-ten since January 1, 2007. The traditional postal operations in each country will be run by business units within a legal frame-work of national companies. The logistics operations will be gath-ered in a joint business unit. The information logistics and graphic operations will also be coordinated in the new company. In addi-tion to these four business units, the new company will have group functions and shared service units.

Proposal for distribution of profitsPursuant to the agreement between the Swedish and Danish states on the merger between Posten AB and Post Danmark A/S, no ordi-nary dividend will be distributed for 2008. According to the same agreement, Posten AB will pay out an extraordinary dividend of SEK 1,400m to the Swedish state.

Contingent upon the successful merger of Posten AB and Post Danmark A/S, the Board of Directors and the Chief Executive Officer propose that the retained earnings be distributed as fol-lows.

SEK

Dividend, 600,000 shares x SEK 2,333.33 per share 1,400,000,000

Brought forward 4,766,203,299

Total 6,166,203,299

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76 f i n a n c i a l s tat e m e nt s · pa r e nt co m pa n y

Table of contentsPage

Income statement 77

Statements of cash flows 77

Balance sheets 78

Changes in equity 79

Notes

Note 1 Accounting principles 80

Note 2 Estimates and assessments 80

Note 3 Revenue distribution 81

Note 4 Intra-group sales and purchases 81

Note 5 Employees and personnel costs 81

Note 6 Other costs 82

Note 7 Auditors’ fees and reimbursement of expenses 82

Note 8 Depreciation, amortization and impairment losses on tangible and intangible fixed assets 82

Note 9 Earnings from participations in group companies 82

Note 10 Interest income, interest expense and similar income items 82

Note 11 Tax 82

Note 12 Intangible fixed assets 83

Note 13 Tangible fixed assets 83

Note 14 Leased machinery and equipment, property leases 83

Note 15 Participations in group companies 83

Note 16 Participations in joint ventures 85

Note 17 Deferred tax 85

Note 18 Inventory 86

Note 19 Accounts receivable 86

Note 20 Prepaid expenses and accrued income 86

Note 21 Short-term investments 86

Note 22 Pensions 86

Note 23 Provisions 87

Note 24 Interest-bearing liabilities 88

Note 25 Accrued expenses and prepaid income 88

Note 26 Assets pledged, contingent liabilities and contingent assets 88

Note 27 Investment commitments 88

Note 28 Cash and cash equivalents 88

Note 29 Financial risk management and financial instruments 89

Note 30 Transactions with associated parties 92

Financial statements, parent company

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77f i n a n c i a l s tat e m e nt s · pa r e nt co m pa n y

SEKm Note 2008 2007

1, 2, 30

Net sales 1) 2,033 2,123

Other income 212 240

Total income 3, 4 2,245 2,363

Personnel costs 5 –561 –673

Other costs 6, 7, 23 –2,035 –2,105

Depreciation and impairments of tangible and intangible fixed assets 8 –59 –76

Total operating costs 4 –2,655 –2,854

OPERATING EARNINGS –410 –491

Earnings from participations in group companies 9 1,582 262

Earnings from other securities and receivables that are fixed assets 10 3

Interest income and similar income items 10 246 220

Interest expense and similar cost items 10 –261 –158

Total financial items 1,567 327

Earnings after financial items 1,157 –164

Depreciation in excess of plan 40 106

Provisions for tax allocation reserve –130

PRETAX EARNINGS 1,067 –58

Tax 11 –57 11

NET EARNINGS 1,010 –47

Dividend 2) 625

1) Posten AB’s net sales refer to sales of shared corporate services to the business units.2) Pursuant to the agreement between the Swedish and Danish states on the merger of Posten

AB and Post Danmark A/S, there will be no ordinary dividend distributed for 2008. According to the same agreement, Posten AB will pay out an extraordinary dividend of SEK 1,400m to the Swedish state upon completion of the merger.

SEKm Note 2008 2007

OPERATING ACTIVITIESEarnings after financial items 1,157 –164

Adjustments for non-cash-flow items:

Reconciliation of depreciation according to plan 59 76

Capital gain/loss on sale of fixed assets 1

Pension provisions –3 –70

Other provisions –708 –1,318

Taxes –458 –514

Cash flows from operating activities before changes in working capital 47 –1,989

Cash flows from changes in working capitalIncrease(–)/Decrease(+) in accounts receivable 11 1,812

Increase(+)/Decrease(–) in accounts payable –71 –373

Other changes in working capital 390 –2,481

Changes in working capital 330 –1,042

Cash flows from operating activities 377 –3,031

INVESTING ACTIVITIESShareholder contributions paid –1,210 –2,204

Investments in tangible fixed assets –43 –50

Investments in intangible fixed assets –17

Investments in financial fixed assets –1,884 –202

Divestment of other fixed assets, etc. 1,528

Cash flows from investment activities –3,154 –928

FINANCING ACTIVITIESLoans raised 314

Loans amortized –48

Dividend paid –625 –400

Group contributions received 2,042 123

Increase(+)/Decrease(–) in other financial liabilities 144 5,084

Cash flows from financing activities 1,827 4,807

CASH FLOWS FOR THE YEAR –950 848

Cash and cash equivalents, beginning of the period 4,038 3,190

Cash and cash equivalents, end of the period 28 3,088 4,038

Income statement Statements of cash flows

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SEKm Note2008

Dec 312007

Dec 31

1, 2, 27, 30

ASSETSIntangible fixed assets 12 42 37

Tangible fixed assets 13, 14 152 156

Participations in group companies 15 8,382 6,465

Participations in joint ventures 16 317

Other long-term securities 1 1

Other long-term receivables 112 69

Deferred tax assets 17 265 498

Total financial fixed assets 8,760 7,350

Total fixed assets 8,954 7,543

Inventory 18 14 17

Accounts receivable 19 10 21

Receivables from group companies, interest- bearing 29 1,743 1,501

Other receivables from group companies 1,763 1,437

Other non-interest-bearing receivables 208 159

Prepaid expenses and accrued income 20 98 100

Total current receivables 3,822 3,218

Short-term investments 21, 28 487 2,750

Cash and bank balances 28, 29 2,601 1,288

Total current assets 6,924 7,273

TOTAL ASSETS 15,878 14,816

SEKm Note2008

Dec 312007

Dec 31

EQUITY AND LIABILITIESRestricted equityCapital stock 600 600

Reserve fund 120 120

Non-restricted equityRetained earnings 5,156 5,202

Net earnings 1,010 –47

TOTAL EQUITY 6,886 5,875

Accumulated depreciation and amortization in excess of plan 17 40

Tax allocation reserve 17 130

TOTAL UNTAXED RESERVES 130 40

Pension provisions 22 19 23

Other provisions 23 922 1,630

TOTAL PROVISIONS 941 1,653

Debt to credit institutions 24, 29 225 252

Other liabilities 138 126

TOTAL LONG-TERM LIABILITIES 363 378

Liabilities to group companies 24, 29 5,980 5,859

Other liabilities 24, 29 359 42

Total interest-bearing liabilities 6,339 5,901

Advances from customers 2 3

Accounts payable 168 239

Tax liabilities 220

Liabilities to group companies 878 311

Other operating liabilities 34 32

Accrued expenses and prepaid income 25 137 164

Total non-interest-bearing liabilities 1,219 969

Total current liabilities 7,558 6,870

7,921 7,248TOTAL EQUITY AND LIABILITIES

15,878 14,816

Assets pledged, contingent liabilities and contingent assets

Contingent liabilities 26 111 101

Contingent assets 26 2,146 1,048

Eventualtillgångar 26 20

Balance sheets

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Changes in equity

Restricted equity Non-restricted equity

SEKmCapital stock1)

Reserve fund

Fund for fair value hedge

reserve

Retained ear-nings incl. net

earnings Total equity

Equity 01/01/07 600 120 0 4,131 4,851Group contributions received 2,043 2,043

Tax on received group contributions –572 –572

Total changes in capital wealth recognized directly in equity, excluding transactions with the company’s owner 1,471 1,471

Net earnings –47 –47

Total changes in capital wealth, excluding transactions with the company’s owner 1,424 1,424

Dividends –400 –400

Equity 12/31/07 600 120 5,155 5,875

Equity 01/01/08 600 120 5,155 5,875Group contributions received 870 870

Tax on received group contributions –244 –244

Total changes in capital wealth recognized directly in equity, excluding transactions with the company’s owner 626 626

Net earnings 1,010 1,010

Total changes in capital wealth, excluding transactions with the company’s owner 1,636 1,636

Dividends –625 –625

Equity 12/31/08 600 120 6,166 6,8861) The number of shares is 600,000, quota value per share SEK 1,000.

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Notes

Note 1 Accounting principlesThe parent company essentially applies the same accounting principles as the group does. The differences between the parent company’s and the group’s accounting principles result from the parent company’s limitations in applying International Financial Reporting Standards (IFRS) as a conse-quence of the Swedish Annual Accounts Act and the Law on Safeguarding of Pension Commitments, and are to some extent also based on tax consid-erations.

The parent company has drawn up its financial statements in accor-dance with the Annual Accounts Act (1995:1554) and the Swedish Finan-cial Accounting Standards Council’s Recommendation RFR 2.1, Reporting for Legal Entities. RFR 2.1 requires that the parent company, in its report-ing for the legal entity, apply IFRS to the extent that they have been approved by the European Commission for application within the Euro-pean Union, wherever possible within the constraints of the Annual Accounts Act and taking into account the relationship between accounting and taxation. The recommendation defines which exceptions and additions apply to the use of IFRS. The differences between the consolidated and par-ent company accounting principles are described below.

The accounting principles for the parent company described below have been applied consistently for all periods presented in the parent company’s financial statements.

For changes to the accounting principles, see Note 1 to the group’s financial statements.

In addition to the changes listed in Note 1, the following changes affect-ing the parent company will be implemented: IFRS 1, First-time Adoption of International Financial Reporting Stand-•

ards, allows a company to determine the acquisition value of subsid-iaries or associated companies in accordance with IAS 27.

IFRS 27, Consolidated and Separate Financial Statements, has been •amended to require the reporting of all dividends from owned com-panies in the income statement.

Application of these new principles has not affected the parent company’s position or earnings.

Participations in subsidiaries, associated companies and joint venturesParticipations in subsidiaries, associated companies and joint ventures are reported in the parent company using the acquisition cost method. Only received dividends arising from earnings made after the parent company acquired its participating interest are reported as income. Dividends that exceed these earnings are viewed as a repayment of the investment and reduce the reported value of the participation.

DividendAnticipated dividends from subsidiaries are reported if the parent company has the exclusive right to determine the size of the dividend and if the par-ent company has made a decision on the size of the dividend prior to publi-cation of the parent company’s financial statements.

Tangible fixed assetsLeased assetsAll leased assets in the parent company are reported according to the rules regarding operational leases.

Employee benefitsDefined-benefit plansThe parent company reports defined-benefit pension plans in accordance with FAR’s RedR 4, Reporting of Pension Liabilities and Pension Costs. The company offers defined-benefit pension plans to its employees. Conse-quently, the parent company’s obligation to pay out pensions has a present value, determined for each employee based on criteria such as pension level, age, and the extent to which a full pension has been earned. Regula-

tions stipulated by the Law on Safeguarding of Pension Commitments and by the Swedish Financial Supervisory Authority have been followed to determine pension commitments, which is also a condition for tax deduct-ibility. The present value is calculated using actuarial principles and is based on the salary and pension levels at the balance sheet date. Pension commitments are reported as provisions on the balance sheet. Pension commitments for civil servants covered by pension insurance plans are reported in the parent company as defined contribution plans. The interest on pension costs is reported as a financial expense. Other pension costs are included under operating earnings. The applied discount rate is in line with the interest set by the Swedish Financial Supervisory Authority and is dif-ferent from what is used in the group financial statement.

Financial guaranteesThe parent company’s financial guarantees consist mainly of guarantees for the benefit of subsidiaries and joint ventures. Financial guarantees entail the company pledging to compensate the owner of a debt instrument for losses incurred in the event a debtor does not complete payment on the due date specified in the contract. To report financial guarantee agreements, the parent company applies RFR 2.1, which is somewhat more lenient than the rules in IAS 39 regarding financial guarantee contracts for the benefit of subsidiaries, associated companies and joint ventures. The parent company reports financial guarantee agreements as provisions on the balance sheet when Posten has a commitment for which payment is likely to be required to settle the commitment.

TaxesThe parent company reports untaxed reserves including its deferred tax lia-bility.

Group contributions are reported according to their financial impact, ordinarily to minimize group tax. Thus group contributions do not consti-tute payment for services rendered, so they are recognized directly in retained earnings, less deductions for tax effects. Group contributions used to cover losses are reported as a capital infusion, which may subsequently be written down.

Shareholder contributions are capitalized in shares and participations held by the provider and reported directly in the non-restricted equity of the recipient. If the shareholder contributions have been provided to facili-tate tax planning, the capital infusion is written down by the provider against group contributions received in equity.

Business segment reportingThe parent company’s operations consist only of one business segment, comprised of shared service units and executive management. Primary and secondary segments are not a relevant classification basis for the parent company, and disclosure requirements are different for the group and the parent company.

Note 2 Estimates and assessmentsIn making these financial reports, the executive management has made assessments, estimates and assumptions that affect the group’s reported accounts. These estimates and assumptions are based on what is known at the time the financial reports are presented, as well as on historical experi-ence and assumptions that the executive management considers reasonable under the current circumstances. The conclusions drawn by executive man-agement form the basis for the values reported in these accounts. Actual future values, estimates and assessments in future financial reports during the coming year may differ from those in this report, due to changing envi-ronmental factors and new knowledge and experience.

The estimates and assessments most significant for Posten have been made in the areas described below.

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Intangible assetsAssumptions are made about future conditions in order to calculate future cash flows that determine the recoverable value of goodwill. The recover-able value is compared with the reported value for these assets and forms the basis for possible impairment or reversals. The assumptions that affect the recoverable value most are future volume development, profit margin development, the discount rate and estimated useful life of the asset. If future environmental factors and circumstances change, these assumptions may be affected so that the reported values of intangible assets are changed. See also Note 12, Intangible Assets.

ProvisionsIn the process of becoming a corporate entity, Posten assumed a contingent liability (special temporary provisions) such that certain categories of the workforce may choose to retire early, at the age of 60 or 63. The contingent liability is recorded as a liability in the balance sheet and is calculated based on previous experience of the number of persons who choose to exercise their right to early retirement in accordance with these provisions. (See also Note 23, Provisions). If the number of those who choose this option changes, the liability will change accordingly.

TaxesThe capitalization of tax loss carry-forwards has been assessed based on business plans and estimates of future taxable profits that can utilize tax loss carry-forwards. Estimates have been made of non-deductible costs and non-taxable income in accordance with current tax regulations. Further-more, consideration has been taken of the next six years’ financial results in order to evaluate the reported tax claim at the currently applicable tax rate. Changes to tax laws in Sweden and changed interpretations and applica-tions of applicable legislation may influence the size of the reported tax assets and tax liabilities. Changed circumstances that impact the assump-tions will also influence financial results for the year. See also Note 17, Deferred Tax.

Note 3 Revenue distributionNet salesSegmentsThe parent company’s operations take place entirely within Posten’s parent company’s functions. Net sales refer to the sale of services to other seg-ments.

Geographic areasDivision into geographic areas is based on the location of customers. Cus-tomers with a Swedish billing address account for most of the parent com-pany’s income.

Net sales by market, SEKm 2008 2007

Sweden 2,033 2,123

Rest of Nordic region 0 0

Rest of world 0 0

Total 2,033 2,123

Other income, SEKm 2008 2007

Foreign exchange gains on operating receivables and liabilities 0 0

Income from property leases 21 17

Other 190 223

Total 211 240

Note 4 Intra-group sales and purchasesOf the parent company’s total income and operating costs, 98 (99)% of income and 4 (3)% of costs are attributable to transactions with sub-sidiaries.

Note 5 Employees and personnel costs2008 2007

Average number of employees, by country Women Men

Propor-tion of

men Women Men

Propor-tion of

men

Sweden 453 435 49% 564 541 49%

Total 888 1,105

2008 2007

Gender division of executives, %

Proportion of women

Proportion of men

Proportion of women

Proportion of men

Executive management1) 29 71 38 62

Group Board of Directors 50 50 57 43

1) Refers to the eight members of the Group Board of Directors employed by Posten AB.

Personnel costs, SEKm 2008 2007

Wages, salaries and other remuneration 310 390


Of which, pension costs (excl. payroll tax) 55 24

Other personnel costs 66 39

Total 561 673

Current and former chief executive officers and executive vice presidents and persons in executive management who are employed by Posten AB, a total of 25 persons, account for SEK 14m (13) of the parent company’s pension costs. Outstanding commitments for these individuals amount to SEK 122m (121).

2008 2007

Wages, salaries and other remuneration, by country, SEKm

Presi-dents1)

of which bonuses

Other employ-

ees Presi-

dents1)of which bonuses

Other employ-

ees

Sweden 10 300 9 381

Total 10 300 9 3811) “Presidents” refers to the CEO and executive vice presidents.

For compensation to executive management and the Board of Directors, see Note 5 in the group financial statements.

Sickness absenteeism, % 2008 2007

Sickness absenteeism, total1) 2.4 3.9

Of which long-term disabilities, 60+ days 44.7 53.4

Sickness absenteeism, women 3.2 4.9

Sickness absenteeism, men 1.8 2.8

Employees ages <29 0.8 2.3

Employees aged 30–49 2.1 3.9

Employees ages 50+ 2.8 4.01) Sickness absenteeism (hours)/contracted work time (hours).

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Note 6 Other costsSEKm 2008 2007

Cost of premises 510 527

Provisions 202 286

Other 1,323 1,292

Total 2,035 2,105

Note 7 Auditors’ fees and reimbursement of expenses

SEKm 2008 2007

Audit

Auditors appointed 2.91) 3.22)

Swedish National Audit Office 0.3 0.2

Total audit costs 3.2 3.4

Other audi and services

Auditors appointed 4.6 2.6

Other auditors 6.4 0.11) Ernst & Young, SEK 2.9m2) Ernst & Young, SEK 2.4m; KPMG, SEK 0.8m

“Audit” refers to examination of the annual report, bookkeeping and administration of the Board and the CEO; other duties resting with the company’s auditors; and advisory services and other types of support that arise in the course of such examination or the performance of such other duties. All other items are “Other audit and services.”

Note 8 Depreciation and impairments of intangible and intangible fixed assets

SEKm 2008 2007

Depreciation/AmortizationLicenses, brands and similar rights 12 12

Real estate 0


Total 59 64

Impairment 12

Total 59 76

Note 9 Earnings from participations in group companies

SEKm 2008 2007

Dividend 919 38

Utilization of provisions by subsidiaries 663 224

Total 1,582 262

Note 10 Interest income, interest expense and similar income items

Earnings from other securities and receivables

that are fixed assets

Interest income and similar

income items

SEKm 2008 2007 2008 2007

Interest income 0 3 224 220

Of which group companies 83 75

Exchange rate gains 22

Total 0 3 246 220

Interest expense –256 –152

Of which: group companies –237 –136

related to pensions 0 0

Other financial income and costs –5

Exchange rate losses –6

Total –261 –158

See Note 29, Financial Risk Management and Financial Instruments.

Note 11 TaxesSEKm 2008 2007

Current taxCurrent tax 176 112

Total 176 112

Deferred taxChange in deferred tax on tax loss carry-forwards 0 0

Change in deferred tax on provisions, Swedish Cashier Service –284 –6

Change in deferred tax, temporary differences –27 3

Change in deferred tax on other provisions, etc. 78 –98

Change in adjustment, deferred tax assets 0

Total –233 –101

Total reported tax expense –57 11

2008 2007

Reconciliation of effective tax rate % SEKm % SEKm

Pretax earnings 1.157 –164

Tax at current tax rate –28.0 –324 28.0 46

Nondeductible expenses –2.2 –26 –3.7 –6

Changes in deferred tax on tangible fixed assets –2.4 –28 –17.7 –29

Tax-free dividend 22.3 257

Effects of changed tax rates and imposition of new taxes –1.5 –18

Effects of tax adjustments concerning preceding year’s earnings 3.9 46

Provisions to tax allocation reserve 3.1 36

Total –4.9 –57 6.6 11

Tax items recognized directly in equity

SEKm 2008 2007

Current tax in received/paid group contributions –244 –572

Values transferred due to reorganization –294

Total –244 –866

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Note 12 Intangible fixed assets

GoodwillLicenses, brands and similar rights Total

SEKm 2008 2007 2008 2007 2008 2007

Acquisition value, beginning of the year 194 111 114 111 308

Acquisitions during the year 17 17

Disposals –194 –3 –197

Accumulated acquisition value, year-end 128 111 128 111

Amortization, beginning of the year –49 –74 –64 –74 –113

Amortization for the year –12 –12 –12 –12

Disposals 49 2 51

Accumulated amortization, year-end –86 –74 –86 –74

Closing balance 42 37 42 37

During the year, expensed development totaled SEK 0m (0).

Note 13 Tangible fixed assets

Real estateMachinery and

equipment

Ongoing construction and

advances Total

SEKm 2008 2007 2008 2007 2008 2007 2008 2007

Acquisition value, beginning of the year 5 435 4,363 3 295 438 4,663

Acquisitions during the year 32 47 11 3 43 50

Disposals –5 –73 –3,977 –293 –73 –4,275

Reclassifications 2 2 –2 –2 0 0

Accumulated acquisition value, year-end 0 396 435 12 3 408 438

Depreciation, beginning of the year –2 –270 –3,107 –270 –3,109

Depreciation for the year 0 –47 –52 –47 –52

Disposals 2 73 2,889 73 2,891

Accumulated depreciation, year-end 0 –244 –270 –244 –270

Impairment, beginning of the year –12 –12

Impairment for the year –12 –12

Accumulated impairment, year-end –12 –12 –12 –12

Closing balance 0 140 153 12 3 152 156

For information on assets held through operational leases, see Note 14.

Note 14 Leased machinery and equipment, property leases

All leases in the parent company are reported as operational leases. The parent company paid leasing charges of SEK 201m (190) during the year. At the balance sheet date, the parent company had outstanding leasing charges of SEK 1,729m (1,772), calculated at the prevailing exchange and interest rates. The minimum payments for leases mature as follows.

Machinery and equipment Properties

SEKm 2008 2007 2008 2007

Within one year 5 6 193 188

Between one and five years 4 5 784 764

Later than five years 743 809

Total 9 11 1,720 1,761

Most of the machinery and equipment put at the company’s disposal through leases comprise vehicles leased from Posten Leasing AB.

Note 15 Participations in group companiesSEKm 2008 2007

Accumulated acquisition value, beginning of the year 6,872 3,372

Acquisitions 1,330 93

Shareholder contributions paid 271 3,411

Divestments/Liquidations –1 –4

Reclassifications 317

Accumulated acquisition value, year-end 8,789 6,872

Accumulated impairment, beginning of the year –407 –407

Accumulated impairment, year-end –407 –407


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Note 15, cont’d.

Parent company’s and group’s holdings in group companies

Equity stake % Book value,

parent company

Shares owned directly or indirectly by parent company (Posten AB), SEKm

Corporate Identity Number Legal domicile Country Direct Indirect No. of shares 2008 2007 Dormant

Posten Meddelande AB 556711-5695 Solna Sweden 100 1,000 2,311 2,311

Strålfors AB 556062-0618 Ljungby Sweden 100 21,381,288 2,037 2,037

Strålfors 5 AB 556115-9053 Ljungby Sweden 100 170 v

Strålfors Card Systems AB 556046-5121 Ljungby Sweden 100 500 v

Strålfors Etikett AB 556072-2364 Ljungby Sweden 100 5,000 v

Strålfors Export AB 556541-6772 Ljungby Sweden 100 100 v

Strålfors Finans AB 556158-7006 Ljungby Sweden 100 2,000 v

Strålfors Information Logistics AB 556069-3508 Ljungby Sweden 100 6,000 v

Strålfors Maila Nordic AB 556516-4455 Ljungby Sweden 100 600 v

Strålfors Svenska AB 556102-9843 Ljungby Sweden 100 5,000

Strålfors Trade-it AB 556109-9770 Ljungby Sweden 100 650 v

AB P A Segenmark 556277-1088 Ljungby Sweden 100 1,000 v

IPM Reseller Partner AB 556234-1403 Ljungby Sweden 100 10,000

Minterbase Technology AB 556534-0279 Ljungby Sweden 100 100 v

Strålfors Tandsbyn AB 556203-4693 Östersund Sweden 100 6,000

Strålfors Göteborg AB 556126-6973 Gothenburg Sweden 100 1,000

Strålfors 1 AB 556683-4916 Ljungby Sweden 100 1,000 v



Strålfors 4 AB 556694-9417 Ljungby Sweden 100 1,000

Strålfors Supplies A/S Bröndby Denmark 100 500,000

Strålfors Supplies AS Oslo Norway 100 100

Strålfors NV Sint-Niklaas Belgium 100 1 v

Strålfors A/S Bröndby Denmark 100 1,986

Strålfors Information Logistics A/S Bröndby Denmark 100 200,000

Strålfors Information Logistics Oy Helsinki Finland 100 1,200

Strålfors Oy Helsinki Finland 100 2,100

SCI du Pont St Jean Société Civile Paris France 70 70

Stralfors Finance SAS Paris France 100 200,000 v

Stralfors France S.A. Evry France 100 100 v

Stralfors SAS Paris France 100 620,776

Strålfors AS Oslo Norway 100 200

Stralfors Sp. z o.o. Crakow Poland 100 100 v

Stralfors Gzella Sp. z o.o. Laskowice Poland 100 2,000

Stralfors AG Aesch Switzerland 100 5,000

Stralfors Schweiz AG Zug Switzerland 100 100

Chacewater Properties Ltd. Redruth United Kingdom 100 1,000 v

DPS Holding Ltd. Orpington United Kingdom 100 45,000

DPS Direct Mail Ltd. Orpington United Kingdom 100 45,000

Stralfors (UK) Ltd Redruth United Kingdom 100 100

Stralfors plc Redruth United Kingdom 100 600,000

Th Stralfors (Data Products) Ltd. Redruth United Kingdom 100 10,000 v

Direct Link Worldwide GmbH Mörfelden-Walldorf Germany 100 150

HIT Deutschland GmbH Lübeck Germany 100 1

Tollpost Globe AS Oslo Norway 100 117,570 1,595 1)

Posten Logistik AB 556711-5380 Solna Sweden 100 1,000 1,100 1,100

DPD Parcel Holding A/S Bröndby Denmark 100 1 359 255

DPD Holding A/S Bröndby Denmark 100 1

DPD Danmark A/S Bröndby Denmark 100 2

DPD Finland Oy Helsinki Finland 100 250 246 239

Poståkeriet Sverige AB 556453-7404 Stockholm Sweden 100 100,500 141 141

Suomen Logistiikkatalo Oy Vanda Finland 100 5,817 88 88

Etelä-Suomen Logistiikkatalo Oy Vanda Finland 100 100

Posten Försäkrings AB 516401-8649 Stockholm Sweden 100 50,000 66 66

Swedgiro AB 556425-2913 Stockholm Sweden 100 2,500,000 56 56

Svensk Kassaservice AB 556615-7987 Stockholm Sweden 100 1,000 50 50

HIT Danmark A/S Copenhagen Denmark 100 500,001 46 9

Hultberg Inrikes Transporter AB 556042-3203 Stockholm Sweden 100 52,000 46 6

Posten Sjukvårdslogistik AB 556514-5306 Stockholm Sweden 100 90 41 9

Svensk Adressändring AB 556476-3562 Stockholm Sweden 85 850 36

1) Tollpost AS is 50% owned and is reported as a joint venture company.

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Note 15, cont’d.

Equity stake % Book value,

parent company

Shares owned directly or indirectly by parent company (Posten AB), SEKm

Corporate Identity Number Legal domicile Country Direct Indirect No. of shares 2008 2007 Dormant

Posten Express PEX AB 556041-7098 Stockholm Sweden 100 17,867 25 6

Tidningstjänst AB 556039-7480 Stockholm Sweden 100 7,500 19 19

Posten Cargo Center AB 556535-0310 Stockholm Sweden 100 5,000 19 7

Direct Link Worldwide Ltd. Middlesex United Kingdom 100 110,000 18 18

Sal-Trans Oy Helsinki Finland 100 100 17 15

JS Racing Oy Kuopio Finland 100 50 v

Addresspoint AB 556587-5597 Stockholm Sweden 85 1,700 16

HIT Finland Oy Vanda Finland 100 11 14 5

Posten Leasing AB 556341-0009 Stockholm Sweden 100 5,000 10 10

Postbolagen AB 556234-1353 Stockholm Sweden 100 25,000 9 9 v

HIT Norge AS Oslo Norway 100 1,000 9 1

NetMark Holding AB 556586-1464 Stockholm Sweden 100 1,000 5 5 v

DPD Norge AS Oslo Norway 100 10,000 1 1

Direct Link Worldwide Inc New Jersey USA 100 100 1 1

Swedish Post Group BV Amsterdam Netherlands 100 200 1 1

Starintex Road Cargo N.V. Gendringen Netherlands 100 21,000

HIT Gentrex B.V. Gendringen Netherlands 100 80

EBT Property B.V. Gendringen Netherlands 100 4,500

DPD Nordic AB 556528-7694 Stockholm Sweden 100 3,000 0 0

Fastighets AB Penelope 556517-0544 Stockholm Sweden 100 100 0 0

DPD Sweden AB 556371-8021 Stockholm Sweden 100 1,000 0 0

Tidningstorget AB 556756-1211 Stockholm Sweden 90 900 0

Fastighets AB Kvasten 8 556482-7508 Stockholm Sweden 100 1,000 0 0

Direct Link Worldwide Pte. Ltd. Singapore Singapore 100 700,000 0 0

Direct Link Worldwide Pty. Ltd. Sydney Australia 100 1

Direct Link Worldwide Company Ltd. Hong Kong China 100 1

Total holdings in group companies 8,382 6,465

Note 16 Participations in joint venturesSEKm 2008 2007

Accumulated acquisition value, beginning of the year 317 317

Acquisitions 1,278

Reported as shares in group companies –1,595


Shares directly owned by parent company (Posten AB), SEKm

No. of shares %

Book value

2007, joint ventureTollpost Globe AS

984 054 564, Oslo, Norway 58,785 50 317

Closing balance 317

The remaining 50% of Tollpost Globe AS was acquired in March, 2008.

Note 17 Deferred tax

2008 SEKm

Opening balance

Reported in income statement

Reported in equity

Closing balance

Deferred tax assetProvisions, Cashier Service 305 –284 21

Pension provisions 31 8 39

Deferred tax, tangible fixed assets 13 –27 –14

Other provisions 149 70 219

Reported deferred tax asset 498 –233 265

Of untaxed reserves, SEK 34m represent deferred tax.

2007 SEKm

Opening balance

Reported in income statement

Reported in equity

Closing balance

Deferred tax assetProvisions, Swedish

Cashier Service 311 –6 305

Pension provisions 57 –4 –221) 31

Deferred tax, tangible fixed assets 10 3 13

Other provisions 515 –94 –2721) 149

Reported deferred tax asset 893 –101 –294 498

1) Amounts transferred to Posten Meddelande AB and Posten Logistik AB in connection with reorganization.

Of untaxed reserves, SEK 11m represent deferred tax.

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Note 18 InventorySEKm 2008 2007

Goods for resale, etc. 14 17


Note 19 Accounts receivableAccounts receivable are reported taking into account accumulated bad debt expenses arising in 2008 and totaling SEK 1m (6). Estimated losses on accounts receivable were SEK 0m (2). For accounting principles related to accounts receivable, see Note 1, Accounting Principles; for risk manage-ment, see Note 29, Financial Risk Management and Financial Instruments.

Note 20 Prepaid expenses and accrued incomeSEKm 2008 2007

Accrued interest income 10

Prepaid rent 68 67

Prepaid insurance premiums 3 4


Other items 22 17


Note 21 Short-term investmentsSEKm 2008 2007

Financial assets reported at fair value in the income statement

– Interest-bearing securities 487 2,750

Closing balance 487 2,750

Note 22 PensionsIn calculating pension commitments, the Swedish Financial Supervisory Authority’s regulation FFFS 2007:31 was applied to legal entities.

SEKm 2008 2007

Present value of pension commitments not secured by Posten’s Pension Fund 19 23


Present value of pension commitments secured by Posten’s Pension Fund 11,110 11,191

Pension Fund’s assets, market value 11,371 13,669

Capital in the pension fund in excess of present value of pension commitments, not reported in Posten AB’s statements 261 2,478

Information on Posten’s Pension Fund can be found in Note 23 (Provi-sions) to the consolidated financial statements.

Posten uses its own pension plan, called ITP-P, based on a standard plan for supplementary pensions for salaried employees in Sweden (ITP). For more information on Posten’s pension plans, see Note 1, Accounting Prin-ciples. Posten AB (publ), Posten Meddelande AB and Posten Logistik AB guarantee their parts of the plan with provisions to Posten’s Pension Fund. Other companies in the group have non-insured liabilities with credit risk insurance through the insurance company Pensionsgaranti and the Swed-ish National Debt Office.

Estimated disbursements for Posten AB during 2009 total SEK 630m (–).

Parent company’s guarantor activitiesThe parent company is a guarantor for subsidiaries with certain pension com-mitments reported as liabilities and to a certain extent taken up as contingent liabilities in the subsidiaries’ financial statements, equaling SEK 1,067m (737). Thus the parent company’s total guarantees amount to SEK 1,137m (799).

Change in net debt, pension commitments

SEKm 2008 2007

Net debt, pension commitments, at beginning of the year 23 92+ Cost reported in income statement for non-insured

pension plans, excl. taxes 95 216

– Provision to Pension Fund 95 285

– Pension payments 627 653

+ Refund from the Fund 623 653

= Net debt at year-end 19 23

The company’s pension commitments are entirely covered by the Law on Safeguarding Pension Commitments.

Costs and income for pensionsNon-insured pension plans

SEKm 2008 2007

Costs of earned pension rights, etc. 95 285

+/– Difference between refund from the Pension Fund or equivalent and pension payments 5

+ Interest costs 0 0

– Actual returns on assets held separately –1,769 324

+/– Impact on earnings of payment of commitments, etc. –59 –293

= Cost of non-insured pension plans, excl. taxes –1,728 316

Insured pension plans

SEKm 2008 2007

+ Insurance premiums or equivalent 14 32

= Pension costs for the year, excl. taxes –1,714 348

+/– Costs covered by surplus in assets held separately/increase of surplus in assets held separately 1,769 –324

= Reported net cost attributable to pensions, excl. taxes 55 24

Assets under managementPosten’s Pension Fund’s assets

Asset class at market value, SEKm 2008 2007

Index-linked bonds 4,032 4,374

Other interest-bearing assets 1,020 2,187

Total interest-bearing assets 5,052 6,561

Property 1,327 957

Infrastructure 568 137

Private Equity 325 273

Stocks 1,756 3,281

Hedge funds 2,343 2,460

Total other assets 6,319 7,108

Total assets 11,371 13,669

Fair value of Pension Fund’s holdings ofii financial instruments issued by the reporting

company, classified in the same categories as in the company’s balance sheets, and – –

ii assets used by the reporting company – –

Percentage return on assets held separately –12.3 3.2

Actuarial assumptionsDiscount rate, %

Index-linked 1.8 3.0

Non-index-linked 4.0 3.5

Information on pension calculations is based on the salary and pension levels at balance sheet date Yes Yes

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Note 23 Provisions

2008, SEKm


Opening balance Provisions Reversals Utilizations

Closing balance

Closure of Swedish Cashier Service 1,089 –3501) –660 79

Restructuring activities 211 6311) –131) –214 615Of which: – personnel reductions 185 617 –13 –188 601

– other closure costs 26 14 –26 14

Future conditional pension commitments 6 –6Of which: – payroll tax 1 –1

– future conditional pension commitments 5 –5

Other 324 16 –801) –32 228Of which: – job-related injuries 82 2 84

– other 242 141) –80 –32 144

Total 1,630 647 –449 –906 922Of which, short term 1,307 6691) Provisions of SEK 202m were recovered under “Other costs” in the 2008 income statement. See Note 6, Other Costs.

Expected payments 2008

SEKm 1 year 2 years 3 years >3 years

Provisions, Swedish Cashier Service 70 9

Provisions, restructuring activities 556 59

Other provisions 54 102 17 55

Total 680 170 17 55

2007, SEKm


Opening balance Provisions Reversals Utilizations

Closing balance

Closure of Swedish Cashier Service 1,109 1302) –150 1,089

Restructuring activities 532 1392) –332) –427 211Of which: – personnel reductions 450 139 –33 –371 185

– other closure costs 82 –56 26

Future conditional pension commitments 994 25 –1,011 –1 6Of which: – payroll tax 194 5 –197 0 1

– future conditional pension commitments 800 20 –814 –1 5

Other 314 1252) –752) –40 324Of which: – job-related injuries 93 –11 82

– other provisions 221 125 –75 –29 242

Total 2,949 419 –1,119 –618 1,630Of which, short term 606 1,3072) Provisions of SEK 286m were recovered under “Other costs” in the 2007 income statement. See Note 6, Other Costs.

Present valueProvisions with payment periods of more than one year are discounted to their present value. Discounting effects included in changes for the year are shown separately where material.

Expected payments for provisionsStated amounts correspond to the estimated result that forms the basis for calculating the size of the provision but which cannot be deemed to reflect real payment flows in their entirety, as certain costs do not correspond to any payments. Such costs include certain costs related to personnel cutbacks.

Provisions, Cashier ServiceThe Cashier Service fulfilled Posten’s commission from the state to offer nationwide financial transaction services. The commission expired on December 31, 2008 in accordance with a 2007 parliamentary decision.

The Cashier Service was closed pursuant to the plan submitted to the Swedish National Post and Telecom Agency on October 1, 2007. As of December 31, 2008, all Cashier Services offices were closed.

Posten has allocated resources to finance closure costs. At year-end 2008, this provision totaled SEK 79m, to be applied to remaining closure costs for personnel and premises during 2009.

Provisions, restructuringIn 2008, restructuring provisions were primarily attributable to early retirement.

New provisions are charged to the business segment that decides on closure.

Provisions, estimated future conditional pensionsPosten is responsible for future conditional pension commitments under so-called transition regulations. The transition regulations apply to certain employees who are entitled to retire at the age of 60 or 63. To qualify, employees must have been 28 years old by January 1, 1992, and have held the same position at Posten since then. The amounts have been reported as a liability at 25 percent of the outstanding commitment plus special payroll tax.

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Note 23, cont’d.

Other provisionsProvisions for job-related injuries and various other reserves reported by companies within the Posten Group are reported under this heading.

During the year, provisions totaling SEK 80m were made for early termination of agreements.

Job-related injuriesThe Workers’ Compensation Act (LAF; 1976:38) came into force on July 1, 1977. Workers’ compensation is administered by the Swedish social insur-ance offices. Workers’ compensation benefits are disbursed in the form of a personal annuity or a beneficiary annuity in the case of a fatality.

Beginning with and including the month in which the injured worker turns 65, the annuity is reduced to 65% of the previous amount.

According to law (1954:243), compensation for injuries predating July 1, 1977 may be paid out in the form of a workers’ compensation annuity. The closing balance at year-end was SEK 84m.

Note 24 Interest-bearing liabilitiesLong-term liabilities maturing more than 5 years out:Debt to credit institutions, SEK 0m (42).

SEKm 2008 2007

Long-term interest-bearing liabilitiesDebt to credit institutions 225 252


Current interest-bearing liabilities Debt to credit institutions 45 42

Liabilities to group companies 5,980 5,859

Commercial paper 314


The commercial paper and bond programs have limits of SEK 2,000m and SEK 3,000, respectively. See Note 29, Financial Risk Management and Financial Instruments.

Note 25 Accrued expenses and prepaid incomeSEKm 2008 2007

Accrued payroll expenses 5 11

Vacation pay liability 31 40


Accrued interest expense 0 1

Other items 81 87


Note 26 Assets pledged, contingent liabilities and contingent assets

SEKm2008

31 dec2007

31 dec

Assets pledgedEndowment insurance policy for current and previous

employees 111 101

Total 111 101

Contingent liabilitiesWarranty costs, FPG1) 1,137 799

Guarantees on behalf of subsidiaries2) 1,005 139

Guarantees on behalf of joint ventures 0 92

Residual value commitment on property lease3) 0 18

Other guarantees 4 0

Total 2,146 1,048

Contingent assetsFinal dividend in bankruptcy, Njord 20

Total 20 1) See also Note 22, Pensions.2) As of December 31, 2008, Posten AB had pledged a total of SEK 814m (78) in capital ade-

quacy guarantees for the benefit of wholly-owned subsidiaries. Of this amount, SEK 710m constitutes capital adequacy guarantees for the Cashier Service. The pledges remain until the AGM approves the companies’ annual reports for 2008.

3) Attributable to the Malmö mail processing facility. The contingent liability arises from Pos-ten’s obligation to cover 90 percent of the property’s resale value that is less than SEK 190m, upon expiration of the contract. The current market value is estimated at SEK 210m, so Pos-ten’s current obligation is SEK 0m.

Note 27 Investment commitmentsAs of December 31, 2008, Posten had committed to acquiring tangible fixed assets for a value of SEK 1m (12). This commitment applies to invest-ments in the IT system.

Note 28 Cash and cash equivalentsSEKm 2008 2007

Cash and cash equivalents from balance sheets 2,601 1,288

Short-term investments1) 487 2,750

Cash and cash equivalents from statements of cash flows 3,088 4,0381) Investments with maturities ordinarily less than three months. Short-term investments are

classified as cash and cash equivalents if they are easily convertible into cash, entail minimal risk of value fluctuations and mature no more than three months from the acquisition date.

Interest paid and receivedThe cash flows from operating activities include the following amounts of interest paid and received.

SEKm 2008 2007

Interest paid 233 213

Interest received –256 –152

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Note 29 Financial risk management and financial instruments

Policies and principles for managing financial transactions and risksThe parent company applies the group’s policies and principles for manag-ing financial risks. See Note 29 to the consolidated financial statements.

Book value and fair value of interest-bearing financial instrumentsBook values chiefly correspond to fair values. For financial liabilities, book and fair values differ. The table below shows the reported and fair values of financial instruments at the treasury management unit, by category.

Calculation of fair valueSecurityFair value is ascertained using official market quotes at the balance sheet date, without deducting transaction costs. If market quotes are unavailable, fair value is set using the government borrowing rate at December 31 plus an appropriate interest spread to reflect the credit risk of the instrument.

DerivativesThe fair value of forward contracts related to electricity, foreign currency and fuel is based on official market quotes. If market quotes are unavail-able, straight interpolation is used.

Interest-bearing liabilitiesFair value is based on discounted future cash flows of principal and interest.

Accounts receivable and accounts payableFor accounts receivable and accounts payable with a remaining useful life of less than one year, the book value is considered to reflect fair value. Accounts receivable and accounts payable with a remaining useful life of more than one year are discounted to ascertain the fair value.

See also Note 1 for reporting and valuation principles regarding finan-cial assets and debts.

Ageing of accounts receivable

SEKm 2008 2007

Undue accounts receivable 4 15

Due but not impaired:

<30 days 3 1

31–30 days 1

61–90 days

>90 days 7 11

Total 15 27

Reserve for bad debts –5 –6

Total 10 21

Financial risk managementThe parent company’s exposure to financial risks is limited by constraints stipulated in the Treasury Policy. Financial risks are divided into four cate-gories: refinancing risk, credit risk, liquidity risk and market risk. See Note 29 to the consolidated financial statements.

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Note 29, cont’d.

Fair value and reported value are recognized in the balance sheets as follows:

2008 Parent company

Financial assets

reported at fair value in the income statement

Loans and accounts

receivable

Held to maturity

investments

Available- for-sale

financial assets

Financial liabilities

reported at fair value in the

income statement

Other liabilities

Total reported

valueFair

value


Accounts receivableAccounts receivable 10 10 10



Cash and cash equivalentsCommercial paper 487 487 487

Cash 2,601 2,601 2,601

Total 604 2,611 3,215 3,215





Current interest-bearing liabilitiesCommercial paper 314 314 314


Debt to group companies 5,980 5,980 5,980

Other liabilitiesAccounts payable 168 168 168

Total 322 6,418 6,740 6,729

Reported gains/losses 0 –1 –1 –1

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2007 Parent company

Financial assets

reported at fair value in the income statement

Loans and accounts

receivable

Held to maturity

investments

Available- for-sale

financial assets

Financial liabilities

reported at fair value in the

income statement

Other liabilities

Total reported

valueFair

value


Accounts receivableAccounts receivable 21 21 21

Other receivablesForward currency contracts 2 2 2

Cash and cash equivalentsDeposits 2,750 2,750 2,750

Cash 1,288 1,288 1,288

Total 103 1,309 2,750 4,162 4,162





Current interest-bearing liabilitiesDebt to credit institutions 41 41 41

Debt to group companies 5,859 5,859 5,859

Other liabilitiesForward currency contracts 2 2 2

Accounts payable 239 239 239

Total 2 6,393 6,395 6,361

Note 29, cont’d.

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Interest-bearing assets and liabilities, effective interest rates and maturity structure

2008 2007

Nominal amount in millions

(original currency)

Effective interest,

%Fixed or variable

<1 year SEKm

1–5 years SEKm

>5 years SEKm

Total SEKm

<1 year SEKm

1–5 years SEKm

>5 years SEKm

Total SEKm

INVESTMENTSCommercial paper in SEK 490 2.031% 487 487 – – – –

Deposits 2,777 – – 2,777

Other lending –

– PLN, variable interest rate – –

– Lending to group companies 1,743 1,743 1,743 1,501 1,501

Total investments 2,230 4,278

LIABILITIESCommercial paper 315 3.173% 314 314

Bank loans– SEK, variable interest rate 164 2.80% 27 137 164 27 136 27 190

– USD, variable interest rate 14 2.74% 18 88 106 15 73 15 103

Other loansLoans from group companies 5,980 142 5,838 5,980 132 5,727 – 5,859

Total liabilities 6,564 6,152

Note 30 Transactions with associated partiesGroup companiesGroup companies provide products and services to one another in accord-ance with the full costing principle, except for services included in Posten’s service range, for which market rates and terms apply.

Parent company’s transactions within Posten Group, SEKm

RelationSales from Posten AB

Purchases by Posten AB

Posten AB’s receivables

Posten AB’s liabilities

2008Group companies 2,195 95 3,506 6,858

2007Group companies 2,309 80 2,937 6,170

Swedish statePosten has been commissioned by the Swedish state to provide universal mail services in accordance with the Postal Services Act.

Like other postal operators in Sweden, Posten must have a permit to provide postal services.

As payment for this permit, the Swedish Post and Telecom Agency received SEK 15m (15) from Posten AB in 2008.

Other organizationsPosten’s insurance association is a freestanding support fund regulated by the Swedish Financial Supervisory Authority. The association insures Pos-ten’s commitments regarding employee disability and family pensions in accordance with ITP-P. In 2008, Posten AB paid premiums of SEK 26m (15) to the insurance association and received compensation totaling SEK 4m (8). Other compensation from the insurance association was paid directly to beneficiaries, and payroll tax for disability pensions was paid by the association.

Posten’s Pension Fund leases premises in property owned by Posten AB’s subsidiary, Fastighets AB Kvasten 8. Annual rent totaled SEK 0.7m (0.6). For Posten’s interaction with Posten’s Pension Fund, see Note 23 to the consolidated financial statements.

Executives and Board of DirectorsFor information on compensation and benefits paid to executives and Board directors, see Note 5 to the consolidated financial statements. Viveca Bergstedt Sten is a member of Posten’s executive management; her husband is CEO of the property management company GE Real Estate. During 2008, Posten rented premises from GE Real Estate for a value of SEK 5m (23).

Note 29, cont’d.

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Signatures of the Board and CEO

Signatures of the Board and CEOPosten’s Board of Directors and CEO hereby affirm that the consolidated accounts were prepared in compliance with International Financial Reporting Standards, to the extent that such standards have been approved for application within the European Union; that the annual report was prepared in compliance with generally accepted accounting principles; and that the consolidated accounts and annual report are a true and fair representation of the group’s and the company’s financial position and earnings. Nothing of a significant nature that could affect the representation of the company as described in the annual report has been omitted. The Financial Review and Board of Directors’ report provide a fair and accurate overview of the development of the group’s and parent company’s operations, position and financial results, and describe significant risks and uncertainty factors facing the parent company and other group companies.

Stockholm, February 16, 2009

Marianne NivertChairman

Mats Abrahamsson Ingrid Bonde Member of the Board Member of the Board

Gunnel Duveblad Katarina Mohlin Member of the Board Member of the Board

Bertil Persson Richard Reinius Member of the Board Member of the Board

Alf Mellström Anne-Marie Ross Kjell Strömbäck Employee representative Employee representative Employee Representative

Lars G NordströmPresident and CEO

Member of the Board

Our audit report was presented on February 16, 2009

Ernst & Young Per Redemo Lars Träff Authorized Public Accountant Authorized Public Accountant Appointed by the Swedish National Audit Office

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Audit Report

To the annual general meeting of Posten Ab (publ), Corporate identity number 556128-6559We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of direc-tors and the Chief Executive Officer of Posten AB (publ) for the financial year 2008. The Annual Report and the Consolidated Financial Statement are included in this printed version on pages II–IV, 1, 4–28 and 43–93. The board of directors and the CEO are responsible for these accounts and the administration of the com-pany as well as for the application of the Annual Accounts Act when preparing the annual accounts and the application of inter-national financial reporting standards IFRSs as adopted by the EU and the Annual Accounts Act when preparing the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the CEO and significant estimates made by the board of directors and the CEO when pre-paring the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual

accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant deci-sions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the CEO. We also examined whether any board member or the CEO has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the company’s financial position and results of operations in accordance with gen-erally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with the international financial reporting standards IFRSs as adopted by the EU and the Annual Accounts Act and give a true and fair view of the group´s financial position and results of operations. The statutory adminis-tration report is consistent with the other parts of the annual accounts and the consolidated accounts.

We recommend to the annual general meeting of shareholders that the income statements and balance sheets of the parent com-pany and the group be adopted, that the profit of the parent com-pany be dealt with in accordance with the proposal in the adminis-tration report and that the members of the board of directors and the Chief Executive Officer be discharged from liability for the financial year.

Stockholm, February 16, 2009

Ernst & Young Per Redemo Lars Träff Authorized Public Accountant Authorized Public Accountant Appointed by the Swedish National Audit Office

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Five-year review

SEKm, unless otherwise specified 2008 2007 2006 2005 2004

Posten GroupNet sales 30,836 29,902 27,823 25,277 25,120

Operating earnings 1,885 1,995 1,442 1,281 1,115

Operating margin, % 6.0 6.6 5.1 5.0 4.4

Earnings after financial items 2,117 2,184 1,578 1,302 1,079

Net earnings 1,506 1,564 1,013 1,478 1,297

Cash flows from operating activities 1,366 2,288 2,602 2,251 1,753

ROE, % 20 24 19 34 42

Equity-assets ratio, % 42 37 33 33 25

C/I ratio, cost/income, % 94.0 93.4 94.9 95.0 95.6

Average number of employees 32,286 32,442 32,887 33,083 35,323

Employee Satisfaction Index (ViP) 67 66 64 63 62

Sickness absenteeism as a percentage of work hours 5.6 6.5 7.8 8.2 8.8

CSI, Customer Satisfaction Index 64 63 62 61 63

Corporate Image 0.3 0.2 0.06 0.03 –0.05

Competiveness Index 73 72 72 71 71

Quality 96.0 95.4 95.4 96.2 96.7

CO2, ton/net sales, SEKm 8.89 9.04 9.80

Quarterly data

2008 2007 2006

SEKm, unless otherwise specified Oct–Dec Jul–Sep Apr–Jun Jan–Mar Oct–Dec Jul–Sep Apr–Jun Jan–Mar Oct–Dec Jul–Sep Apr–Jun Jan–Mar

Net sales 8,053 7,188 7,857 7,738 8,019 6,821 7,358 7,704 7,940 6,757 6,567 6,559

Operating earnings 306 414 471 694 47 560 545 843 –159 531 424 646

Operating margin, % 3.8 5.6 5.9 8.8 0.6 8.1 7.4 10.9 –2.0 7.8 6.4 9.7

Earnings after financial items 347 460 564 746 81 622 588 893 –119 564 449 684

Net earnings 248 321 404 533 66 453 431 614 –300 449 323 541

Cash flows from operating activities 974 –556 657 291 1,054 –212 673 773 1,512 –53 690 453

ROE, %, rolling 12-month period 20 18 20 21 24 18 19 18 19 35 40 39

Equity-assets ratio, % at end of period 42 41 39 40 37 39 36 36 33 36 33 35

Average number of employees 31,611 33,825 32,395 31,313 32,304 33,610 32,128 31,726 33,571 34,841 32,075 31,062

Average number of employees, from beginning of year to end of period 32,286 32,511 31,854 31,313 32,442 32,488 31,927 31,726 32,887 32,659 31,569 31,062

Employee Satisfaction Index (ViP) 67 67 67 66 66 66 65 65 64 64 63 63

Customer Satisfaction Index (CSI) 64 63 62 63 63 63 63 63 62 62 62 61

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Definitions

Average number of employees Total number of paid employee hours divided by the standard number of hours for a full-time employee.

Carbon dioxide, ton/Net sales, SEKm Posten’s emissions in Sweden of carbon dioxide (ton) in relation to net sales (SEKm) in Sweden.

Changes in productivity Earnings trend that depends wholly on volume-related revenue and cost changes, such as more parcels or fewer employees. Price-related revenue and cost changes, such as wage increases, have thus been excluded from the earnings trend in calculating productivity.

Competitiveness Index An index that biannually measures the degree to which customers value Posten’s services as being of good value and easy to use.

Corporate Image Annual survey conducted by Synovate (previously TEMO). Since 2005 the sur-vey has been conducted via the Internet, with results based on approximately 1,000 responses.

Cost/Income (C/I) ratio Operating costs in rela-tion to total income.

Customer Satisfaction Index (CSI) Measures the extent to which the “satisfied customer” goal is achieved. Surveys are conducted regularly and reported quarterly. The fourth quarter results are counted as the results for the year. The method yields information about key improvements that will enhance customer satisfaction. During the year, CSI surveys were conducted for the Posten Meddelande and Posten Logistik segments. The surveys cover only Swedish customers. A total of approximately 2,000 interviews were conducted with companies and private customers.

Delivery performance On-time deliveries for priority mail, UDM standard and DPD Business 4 PM parcels. The index is weighted according to the income generated from each service.

Earnings per share Share of net earnings attribut-able to parent company’s shareholder in relation to average number of outstanding shares.

Equity-assets ratio Equity (including minority shares) at end of the period in relation to balance sheet total at end of the period.

Non-priority mail Mail processed in a production stream for delivery within three business days after mailing.

Operating margin Operating earnings as a per-centage of total income (net sales and other total income). Calculation of operating margin per business segment includes sales to other segments and parent company functions.

Priority mail Mail processed in a production stream for delivery on the first business day after mailing.

Return on equity (ROE) Earnings for the period (rolling 12-month) in relation to average equity (rolling 12-month).

Sickness absenteeism Sickness absenteeism as a percentage is calculated by determining the total number of hours that employees are absent from work due to illness (excluding those receiving permanent sickness benefits) in relation to the total number of contracted work hours. Con-tracted work hours include hourly, monthly and contracted employees. The target includes 90% of Posten Group employees.

ViP Index A performance indicator measuring achievement of the employee dedication target. Measurements are performed regularly through-out the year through surveys. At least once a year, employees are provided the opportunity to evalu-ate their immediate supervisor and advancement horizons, as well as to rate their overall work sit-uation. The ViP target includes 87% of Posten Group employees. As of 2009, the ViP survey will be replaced with a new employee survey.

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A few examples of Posten’s collaboration with customers

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Yellow Bird

From book to film with Posten LogistikGoal Filming according to scheduleThe film production of Steig Larsson’s tril-ogy required fast, reliable, highly flexible transportation in order to keep to its time-table.

For over a year, the Yellow Bird produc-tion company filmed hundreds of hours of footage for its screen adaptation of Stieg Larsson’s best-selling Millennium trilogy books. In order to keep to the schedule and budget, developing and editing were done parallel to filming. The director and pro-ducer needed to quickly be able to approve

the takes and make decisions about any necessary retakes. Filming was chiefly done in Stockholm, editing in Copenhagen. This meant that the producers needed a reliable logistics partner with a high degree of flexi-bility, quality and security. Posten Logistik was chosen as the official logistics partner.

Action Combine standard products with messenger serviceAfter post-production development, Posten Logistik picked up the material at Nordisk Film in Värtahamnen, Stockholm. The film

was transported overnight to Malmö, and sent over the Sound by express delivery early in the morning. Posten Logistik picked up the material after it was edited, and it was back with the producer and director for approval less than two days after filming.

Result Successful collaborationThrough close, high-quality collaboration, the producers kept to their schedule and budget.

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Naturkraft

Pellets on pallets Goal Increase sales with home deliveriesMany homeowners are converting their oil boilers to pellet burners, thereby saving several thousand crowns per year. Naturkraft is part of the Graanual Invest group, one of Europe’s largest manufacturers of wood pellets with an annual produc-tion of 450,000 tons. The goal was to increase sales by improving transport so that customers could order pellets from Naturkraft’s web shop and have the pellets delivered to their homes.

Action Fast, reliable delivery directly to the customer’s doorNaturkraft and Posten Logistik signed a 3-year contract for the palletized transport of pellets to recipients all over Sweden. Crucial factors in Naturkraft’s choice of transportation partner were flexibility and a local presence that allows Naturkraft to pro-vide the best customer service on the market. Naturkraft handles portions of the transportation and leaves the local distribution to Posten Logistik. The agreement also includes addressed direct-mail and payment services.

Result Simplified deliveries and a clean energy sourceInterest in clean energy sources is increasingly fueling sales and expand-ing the potential of this agreement. Through its collaboration with Posten Logistik, Naturkraft expects its vol-umes to increase from 2,000 pallets in 2009 to 15,000 within 3 years.

Arken Zoo

High pressure in Arken Zoo shops Goal More customers in the shopsWith 39 shops throughout Sweden, Arken Zoo’s growth target was ambitious: within 3 years, grow the business to around 100 shops. Posten was assigned the task of attracting customers to the shops through direct mail. It was crucial that Arken Zoo find a reliable distributor, one that could guarantee that the shops would reach a wide audience with attractive offers.

Action Harmonized printing and distributionWe focused on the selected target group. With the help of Customer Service in Malmö, maps of areas relevant to the shops

were developed. Customer Service main-tained ongoing contact with the shops in order to ensure that the customer’s time table was kept. To further simplify matters for the customer, Stralfors was responsible for printing brochures – Posten thus had total responsibility for printing and distribution.

Result Tremendous increase in salesDirect mail with Posten brought thousands of new customers to Arken Zoo shops and increased sales dramatically, by approxi-mately 48 percent during the period. The shops now want to increase their use of direct mail. The Stralfors solution further simplified the processing of the mail pieces.

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Klingel

Inspiration for Nordic Klingel customersGoal Complete Nordic direct mail solutionMail-order company Klingel, one of Ger-many’s leading distance trade companies with a line of goods ranging from women’s and men’s fashion to shoes, jewelry and household items, was looking for a com-plete, attractive direct mail solution for the Nordic region. Klingel sends addressed and unaddressed direct mail and e-letters to Sweden, Norway and Finland. Posten won the contract.

Klingel was founded in Germany in 1923 and opened for business in Sweden in 2003. Klingel sells women’s/men’s clothing, shoes, jewelry and home/household items, with an emphasis on women’s fashion.

Apart from the actual clothing, the compa-ny’s success is based on its active identifica-tion of new customers and on increasing its sales to existing customers. Klingel was delighted with its collaboration with Posten in both respects. Posten’s review of Klingel’s customer register and Posten’s distance trade analysis were extremely valuable to Klingel’s efforts in identifying new custom-ers. Posten distributes the catalogues that represent the be-all and end-all of Klingel’s sales efforts – two main catalogues and around 15 campaign catalogues per year. The customer register was also continu-ously fine-tuned by Posten in connection with catalogue mailings. Posten also made invoicing smoother: Klingel sends Posten its

customer information files on a monthly basis, which Posten then prints in an attract ive letter format rather than an uninteresting invoice format.

Goal Guarantee teamworkSince the fall of 2008, Vattenfall has offered its customers the opportunity to buy low-energy light bulbs via the company’s home-page. The eco-friendly web shop needed a unique e-commerce solution. Vattenfall was looking for a partner who could guarantee everything from customer order placements and payments to stock-keeping, packaging and distribution. After evaluating various alternatives, Posten was the obvious partner.

Action Posten Meddelande+Stralfors+Posten LogistikThe solution required a combination of services from Posten’s different companies. In cooperation with the Design Station, Posten Meddelande created a homepage for customer orders, integrated Stralfors’ pay-ment exchange and linked the transactions to Posten’s healthcare logistics order pro-cessing system (PSL). PSL packaged the items and distributed them with the help of Posten Meddelande.

Result A rational environmental solutionPosten’s e-commerce solution was both clean and rational, offering Vattenfall’s cus-tomers the opportunity to make a brilliant environmental contribution.

Vattenfall

Brilliant environmental contribution

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Production: Posten. Graphic design: n3 Kommunikation. Printing: Strokirk-Landströms.

Photography: Bengt Alm, Claus Peukert, Petra Järnbert, Henrik Petit, Mia Lindh, IStock Photo, Knut Koivisto and Johnér et al.

With Posten’s help, messages and goods can be delivered quickly,

safely and cost-effectively. We enable our customers to generate added

value by combining physical and electronic flows, where Posten’s

services may also be integrated into our customers’ operations. With

almost 4,000 service points, Posten serves 4.5 million households and

900,000 businesses in Sweden. Posten handles more than 20 million

mail pieces each day. With over 30,000 employees and sales of more

than SEK 30 billion, Posten is also one of Sweden’s largest corporations.

The parent company is Posten AB (publ), owned by the Swedish state.

Please visit us at www.posten.se.

Posten AB (publ)SE-105 00

Visiting address:

Terminalvägen 24, Solna

Phone: +46(0)8-781 10 00

Principle place of business: Solna

Corp id.: 556128-6559

www.posten.se

Documents

WOrld-claSS cOmmuNicaTiONS aNd lOgiSTicS/media/documents/public/annual...service. The operation also offers high-precision logistics solutions such as in-night freight forwarding and