We have already passed several major milestones on our way to becoming the leading global logistics provider: targeted acquisitions have enabled us to expand the Group’s service portfolio and created a global platform for our offering. Our customers benefit from our logistics expertise – worldwide. As part of our long-term corporate strategy, we intend to further enhance our enterprise value with our STAR program.

Systematic progress towards becoming the leading global provider of express and logistics services
From 1990 to 2002, our Company laid a solid foundation for the further expansion of what, today, is already an excellent market position.Within the space of twelve years, the loss-making national postal service was transformed into a profitable, global logistics service provider.We more than quadrupled our revenue during this period; measured by our earnings in 2001, Deutsche Post ranks eighth on the German share index DAX. The Group has a low level of debt, and targeted international acquisitions now allow us to offer our customers a global platform of express and logistics services that can accommodate all of their weight and transit-time requirements.

The complete takeover of DHL at the end of fiscal year 2002 marked a milestone in our corporate strategy. Close cooperation between all of our Corporate Divisions means we will be able to use our business platform even more efficiently from now on. We are fully integrating the Group’s express and logistics activities under the umbrella of the global DHL brand: both operationally, by integrating networks that were operated separately until now, and organizationally, by restructuring these areas. This means we have fulfilled the most important condition for becoming the leading global provider of express and logistics services. Globalization, the worldwide elimination of trade restrictions and increasing Internet use offer golden opportunities for international logistics providers.

STAR – the Group-wide program for value creation and integration
With the STAR program, we will leverage our excellent pole position on the international markets to transform Deutsche Post World Net into the number-one provider. In the course of this initiative, “value creation” and “integration” will become the maxims for all functions, all organizational units, all locations and all employees over the next few years.

The core component of the program is the integration of Danzas, Deutsche Post Euro Express and DHL. Our employees have already gained experience in this area: we successfully integrated ASG and Nedlloyd into Danzas between 1999 and 2001 and created the ground-based, pan-European Euro Express network. This expertise guarantees that the integration process will function smoothly for us as well as for our customers.

Creating value-oriented thinking – Group-wide
We have set up over a hundred divisional and cross-divisional projects that are designed to implement our planned value creation initiatives and boost earnings in the period up to 2005. Our goal is to increase the Group’s earnings to €3.1 billion in 2005. The identification of our entire management team with the STAR program ensures its success.

Satisfied customers are the prerequisite for our growth
Our value creation program has a clear customer focus.We already offer our customers a single-source, end-to-end range of mail, express, logistics and financial services. In order to drive forward this one-stop shopping, we have developed a comprehensive package of measures that we will implement within the framework of STAR:

1. DHL as an umbrella brand for express and logistics services
In the future, Deutsche Post World Net will present its express and logistics activities under a single, international brand.We chose the well-established DHL brand because it stands for global presence, speed and dependability. This familiar and trusted brand name will aid us as we continue to develop globalized markets.

2. Joint management of the EXPRESS and LOGISTICS Corporate Divisions
The administrative centers of Deutsche Post Euro Express, Danzas and DHL will be merged at DHL’s Brussels location. This will result in a streamlined structure and more efficient organizational processes. In addition, we plan to integrate formerly independent central functions in order to realize synergies. A Global Coordination Center will reduce costs and increase efficiency, particularly with respect to central functions such as finances, information technology and communication.

3. Harmonized products and sales structures
In order to make our service offering more transparent to customers, we will streamline and harmonize our product portfolio under DHL. This will also enable us to optimize processes and cut costs significantly. In the future, DHL’s global offering will be bundled in four brand areas: DHL Express, DHL Freight, DHL Danzas Air and Ocean and DHL Solutions. In addition, customers will be able to take advantage of a common sales structure worldwide. Consolidated key account management will guarantee a single point of contact for customers – what we like to call “one face to the customer”.

4. Integrated network management
Until now, the European networks belonging to Deutsche Post Euro Express, Danzas and DHL have been operated independently. Their management will be coordinated in the future, first within individual countries and then throughout Europe. Our goal is to develop an integrated European ground- and air-based distribution network, which will significantly improve pick-up and delivery processes. As we integrate these networks, we will benefit from the experience that Danzas and Deutsche Post Euro Express have accumulated over the past few years when successfully integrating the networks belonging to ASG, Nedlloyd and other transport companies into the Group.

5. Group-wide process optimization
A number of projects are focused on the Group’s central functions. For example, Group-wide purchasing will be reorganized as part of STAR: we will bundle our global purchasing power, optimize process organization and establish binding purchasing standards Group-wide. These measures will contribute to the planned increase in earnings.

Transparent, credible communication mobilizes employees
A comprehensive value creation program like STAR can only be successfully planned and implemented if management and employees are involved on a broad level and are committed in equal measure to its success.

For this reason, 150 of the Group’s executives conducted management workshops in 2002 that covered the program’s core themes. In particular, they discussed the integration of the business platforms of Deutsche Post Euro Express, Danzas and DHL.

STAR will only be successful if we have the trust of the relevant internal and external target groups.We know that we can only gain this trust if we openly communicate Group developments. Credibility and transparency are thus key success factors for our program.We will regularly inform our employees, shareholders, customers and suppliers about the development of the projects and the value enhancement achieved as a result. To facilitate this, our executives will assume crucial roles as multipliers.

Our aim is to deliver everything, everywhere, at any time, with the same high quality for our customers. In the future, this service will be in demand more than ever before, and we are well prepared. With STAR, we will continue to optimize our processes and services so that we can achieve a long-term increase in the value of our Company.