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Business Post Group plc

Business Post Group plc. Interim Results Presentation 14 November 2006. Guy Buswell Group Chief Executive. Agenda. Introduction Guy Buswell Financial review Steven Glew Group strategy Guy Buswell. Introduction. An encouraging period, operationally and financially

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Business Post Group plc

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  1. Business Post Group plc Interim Results Presentation 14 November 2006

  2. Guy BuswellGroup Chief Executive

  3. Agenda • Introduction Guy Buswell • Financial review Steven Glew • Group strategy Guy Buswell

  4. Introduction • An encouraging period, operationally and financially • Good progress in addressing issues in Parcel Services • Continued strong growth in UK Mail • Transformation of financial management • Strategic agenda

  5. Clear strategic goal “The UK’s Leading Integrated Postal Group”

  6. Steven GlewGroup Finance DirectorFinancial Results

  7. Financial Review • Best Practice Financial Disciplines • Balance Sheet Review • Cash Management • Management Information • Forecasting & Planning • Cost Control/reduction

  8. Summarised Income Statement

  9. Divisional Operating Profit

  10. Parcel Services Specialist Services Mail Services Divisional Revenue 6 months to 30 September 2006 2005 14% 15% £21.1m £20.4m 11% £14.6m 24% £37.5m 74% £98.0m 62% £94.4m

  11. Parcel Services Specialist Services Mail Services Divisional Operating Profit 6 months to 30 September 2006 2005 12% 12% £1.2m £1.5m 9% 25% £1.1m £2.6m 79% £10.1m 63% £6.6m

  12. Parcel Services6 months to 30 September H1 Comparable Revenue Change 5 Volume + + 4 % % Price Mix Total - 2 % - 3 % - 1 % % -5

  13. Parcel Services6 months to 30 SeptemberPre-exceptional operating profit

  14. Mail Services

  15. Mail Items

  16. Specialist Services

  17. Central Costs6 months to 30 September

  18. Exceptional Item/Prior Year Adjustment

  19. Cash Flow

  20. Balance Sheet

  21. Guy BuswellGroup Chief Executive

  22. Performance improvement in Parcels Services Initial Priorities: • Improve customer service in Parcels Services • Improve network operational efficiency • Address underperforming franchise operations • Renew strategically important FedEx Express contract

  23. Service levels • Major improvements in night operation • Improved management at site level • New, service-based incentives • Delivery performance at >98% amongst highest in industry • Customer retention improved

  24. Network operational efficiency • New network engineering team • Improved load balances • Improved capacity utilisation • Good reduction in cost per consignment

  25. Linehaul cost per parcel

  26. Former franchise operations • Poor performers being turned around under corporate ownership • 14 transferred in this calendar year • Expected losses of £3m in current year • Losses to be eliminated from year end

  27. Ongoing franchise operations • Improved support and roll out of best practices • Advances to franchises ceased Aug 06 • All remaining franchises trade profitably

  28. Strategic Agenda “The UK’s Leading Integrated Postal Group”

  29. Background • Parcels the historic core of the business • Businesses have been run as completely separate units • UK Mail has demonstrated benefits of a more integrated approach • Comprehensive review undertaken to establish strategic agenda

  30. Group Strategy - background Four Pillars • Integrated management approach, especially in CRM • Customer-focused approach to growth segments in Parcels Services • Building further on leading position in deregulating mail industry • Further exploitation of opportunities in specialist services

  31. Parcel Services UK Mail Specialist Services Existing operating model & ethos Sales & marketing Sales & marketing Sales & marketing

  32. Specialist Services UK Mail Parcel Services Creation of an integrated business model Significant customer overlap Sales & marketing Common network

  33. Integrated business model • Group to be managed as an integrated business • UK Mail to be run as a core element of the business • Integrated marketing • Leveraging the common network

  34. Opportunities in Parcels (Source: Business Post Group internal estimates)

  35. Opportunities in mail industry 4% Estimated value £1.4bn 21% 75% Total UK market volume: 22.5bn items (Source: Business Post Group internal estimates)

  36. Group Strategy - Summary • Creation of greater capacity, flexibility and efficiency • Top line growth from innovation and effective targeting of higher growth segments • Enhanced service levels and profitability from greater business discipline • Realising the potential of our strong market positions

  37. Outlook • Current trading remains in line with our expectations • Much improved second half expected • Clear strategic agenda – the UK’s leading integrated postal group • Robust platform for growth being created

  38. Business Post Group plc Interim Results Presentation 14 November 2006

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