Business Post Group plc

1
Business Post Group plc

• Interim Results Presentation
• 14 November 2006

2
Guy BuswellGroup Chief Executive
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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 UKs Leading Integrated Postal Group

6
Steven GlewGroup Finance DirectorFinancial
Results
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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
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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
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
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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-exc
eptional 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
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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

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Service levels

• Major improvements in night operation
• Improved management at site level
• New, service-based incentives
• Delivery performance at gt98 amongst highest in
  industry
• Customer retention improved

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Network operational efficiency

• New network engineering team
• Improved load balances
• Improved capacity utilisation
• Good reduction in cost per consignment

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Linehaul cost per parcel
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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

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Ongoing franchise operations

• Improved support and roll out of best practices
• Advances to franchises ceased Aug 06
• All remaining franchises trade profitably

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Strategic Agenda

• The UKs Leading Integrated Postal Group

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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

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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

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Existing operating model ethos
Sales marketing
Sales marketing
Sales marketing
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Creation of an integrated business model
Significant customer overlap
Sales marketing
Common network
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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

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

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Outlook

• Current trading remains in line with our
  expectations
• Much improved second half expected
• Clear strategic agenda the UKs leading
  integrated postal group
• Robust platform for growth being created

38
Business Post Group plc

• Interim Results Presentation
• 14 November 2006