TNT

Our mission is to exceed customers’ expectations in the transfer of their goods and documents around the world. We seek to deliver value to our customers by providing the most reliable and efficient solutions in distribution and network management. We seek to lead the industry by:

• instilling pride in our people,
• creating value for our shareholders, and
• sharing responsibility for our world.

In December 2005, we announced a refined strategy to focus on what we do best: providing delivery services by expertly managing delivery networks. This refined strategy is focused and decisive; we believe it contains manageable execution risks and is based on our core strength. The objective is to achieve profitable growth. Three key elements guide the way forward:

• focus on our core capability: providing delivery services by expertly managing a portfolio of networks, in particular delivery networks, in mail (both in the Netherlands and a number of other core European markets), express, and network logistics in Europe and Asia, where we believe our competitive advantage can be sustained and enhanced, and shareholder value can be created. We aim to accelerate growth in the networks organically as well as through selected acquisitions. In addition to our home market in Europe, further growth is targeted from Asia via development of a cross-border road network in South-east Asia and expansion of domestic road networks in China and India. In the future, we intend to expand the strategy by developing a European standard parcels service offering,
• exit most of our logistics activities, as these do not fit with our core capability of managing networks. Logistics characteristics are quite different from the network businesses of express and mail. Contract logistics is a business that demands high project management skills for each contract, rather than for the business as a whole. Solutions are generally unique to each customer. Over the last few years, margins in the contract logistics industry have continued to decline. Creating a sustainable competitive cost advantage is not easy. Given that TNT has not yet been able to reach the break-even point relative to the cost of capital, we intend to exit the largest part of the logistics division (non-network logistics, accounting for €3.6 billion of revenues in 2005). We plan to retain the network logistics businesses, consisting of freight management and innight services, and to integrate them into the express division, and
• our strong and predictable cash flow from the network strategy should allow us to optimise our capital structure whilst maintaining sufficient headroom for future growth opportunities. The long term capital strategy is to maintain our investment grade credit rating. As a result we are executing an open-market €1 billion share buy back programme (amounting to approximately 42.6 million shares) announced and started on 6 December 2005 and, subject to unforeseen events, we have the intention to use the cash proceeds from the sale of our discontinued logistics operations to make further share repurchases, pay dividends or invest in compelling value creating opportunities.

Based on our refined strategy we will now manage our business through two divisions: Mail and Express, with the Express division including both our Express and our Freight Management businesses. The parts of our former Logistics division that we intend to exit are reported as discontinued operations/assets held for sale.Optimisation of our organisation will be considered during 2006.

REBRANDING

To highlight the increasing internationalisation of our company,we changed the statutory name of our company to TNT N.V. On 7 April 2005, our annual general meeting of shareholders approved this change, and the name change came into effect on 11 April 2005. We intend to operate globally under the TNT brand for all our activities in the course of 2006. Operating under one brand increases the recognition of our group worldwide and allows for more efficient communication on the services we provide.

In the Netherlands, we currently offer our postal services mainly under the brand TPG Post. We recently started changing this to TNT Post. Royal TPG Post B.V. will officially change its name to Royal TNT Post B.V. in the autumn of 2006. We have been granted the right to affix the designation “Royal” to our subsidiary TNT Post B.V. after the name change. We presently offer postal services in eight European countries, partly under the name TNT. Starting in 2006, all our international postal activities will be rebranded to TNT. The change of our name is being accompanied by a change of colour to orange for the remainder of the group.

OUR COMMITMENT TO COMMUNITY

Governance
We are committed to good corporate governance. We have embraced the spirit of corporate governance reform, which resulted in our ranking as the company with the best compliance with the Dutch corporate governance code according to the Dutch Investor’s Association (VEB) on 9 December 2005. We have procedures and policies covering whistleblowing, auditor independence and U.S. Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act) compliance, under the supervision of our audit committee.

Social and environmental impact
We strive to improve the social and environmental impact of our business on communities around the world. We aspire to help people realise their potential and to meet the needs of the current generation, without producing a poorer world for future generations.

Corporate philanthropy
We have established a strategic partnership with the United Nations World Food Programme (WFP), in which we share resources and know-how in the fight against hunger.

Environment
We are committed to protecting the environment. This includes promoting the reduction of emissions through efficient route planning, the use of cleaner alternative fuels and the replacement of road vehicles and aircraft by cleaner versions. In 2005, we again increased the coverage of ISO 14001 certified environmental management systems and entered the Dow Jones Sustainability Index as leader of the industrial transportation industry. We report our progress in our annual corporate social responsibility report, which can be viewed on our website, group.tnt.com.

Reputation
We seek to maintain transparency. This was recognised in 2004 by TNT winning the prestigious Henri Sijthoff prize for the best annual report in the Netherlands. We also won the award for the best corporate website, issued by the Dutch leading financial newspaper in 2004. Our 2004 annual report furthermore ranked 9th in the yearly global annual report ranking as prepared by e.com and was voted one of the best edited and designed Dutch annual reports by the Graphic Culture Foundation. According to webranking 2005, published by the Financial Times, the TNT website ranked as best corporate website in Europe in 2005. Furthermore, we ranked first in our sector for investor relations in the 2005 Thomson Extel pan-European survey.