Royal Mail plc
News Release
22 January 2015
ROYAL MAIL plc
TRADING UPDATE FOR THE NINE MONTHS ENDED 28 DECEMBER 2014
Royal Mail plc (RMG.L) today issued the following trading update covering the nine months ended 28
December 2014.
Moya Greene, Chief Executive Officer, Royal Mail plc, said:
“Our postmen and women delivered a great service over the busy festive period. Royal Mail delivered one
of its highest ever quality of service performances for parcel delivery to our customers over the month.
This is because we started to plan for Christmas in April, putting investment behind extra sorting capacity
with 10 temporary hubs and training around 19,000 extra people. As a result, Royal Mail was able to
provide customers with reliability, flexibility and high quality delivery at a competitive price.
“As the UK’s biggest parcels carrier we are proud that so many people and businesses the length and
breadth of the country trusted us to deliver their Christmas. We handled around 120m parcels in the
month of December alone, 4% more than last year. Letters performed in line with our expectations, with
addressed letter volumes down 3% in the first nine months. GLS, our ground-based European parcels
business, continued to perform well.
“We are continuing to bear down on costs and expect that underlying operating costs before
transformation costs in UKPIL will be flat for the full year. Given our performance over the Christmas
period, we are confident that the outcome for the full year will be in line with our expectations.”
Trading performance for the nine months ended 28 December 2014
Group
Revenue
Change1
1%
UKPIL
Revenue
Underlying operating costs
Change1
flat
flat
 UKPIL revenue was flat in the first nine months, with parcel and letter revenues now both flat year-onyear.
 We delivered a strong cost performance and continue to expect to hold underlying operating costs
before transformation costs in UKPIL flat for the full year.
UK Parcels
Volumes
Revenue
Change1
3%
flat
 Parcel volumes were up 3% in the first nine months, compared with 2% in the first half, supported by
growth in import parcels. In account parcels, we have benefitted from the initiatives we introduced
earlier in the year, successfully targeting new sectors of the market and benefitting from opening our
network at the weekend.
 Parcel volumes in the month of December alone were around 120m, 4% more than last year.
 Parcel revenue performance has improved relative to the first half, which saw a 1% decline. There
continues to be a highly competitive environment in all the major channels.
 Parcelforce Worldwide volumes were up 10%. Pricing continues to be under pressure due to the
competitive environment in the express delivery parcel market.
UK Letters
Addressed letter volumes
Revenue
Change1
(3%)
flat
 Addressed letter volumes decreased by 3% (excluding the impact of election mailings), better than our
forecast range of a 4%-6% decline per annum, mainly due to the improvement in UK economic
conditions this year.
 Letter revenue was flat, compared with up 1% in the first half, partially reflecting the diminishing impact
of election mailings over the year.
GLS
Volumes
Revenue
Change1
8%
8%
 GLS performed well, continuing the trend seen in the first half. This reflects the attractiveness of our
high quality deferred parcels offering.
 The change to the minimum wage came into effect in Germany at the start of 2015. It is too early at
this stage to be able to determine the impact of this change on the German parcels industry but the
impact on GLS Germany’s cost base could be significant.
Current trading and outlook
The sale of our Paddington site completed as expected on 8 December 2014 with total gross cash
proceeds of £111m being received.
Overall, trading in the nine months ended 28 December 2014 has been in line with our expectations, with
the seasonal increase in parcel volumes coming through as anticipated. Given our performance over the
Christmas period, and that we continue to expect to hold underlying UKPIL operating costs before
transformation costs flat for the full year, we are confident that the outcome for the full year will be in line
with our expectations. Our outlook for letter and parcel trends and other guidance remain unchanged from
that set out in our Financial Report for the half year ended 28 September 2014 issued on 19 November
2014.
The results for the full year ending 29 March 2015 are expected to be announced on Thursday 21 May
2015.
Note:
1. Movements in volume, revenue and costs are on an underlying basis, unless otherwise stated. Underlying movements are
calculated after adjusting for foreign exchange movements in GLS’ revenue and working days in UKPIL revenue, as well as any
non-recurring or distorting items that have impacted the reporting periods. For comparison purposes all underlying adjustments
are made to the prior period. For volumes, underlying movements are adjusted for working days in UKPIL. There was
approximately one less working day in the first nine months of 2014-15 compared with the first nine months last year.
Enquiries:
Investor Relations
Catherine Nash
Phone: 020 7449 8297
Email: [email protected]
Media Relations
Mish Tullar
Phone: 07423 524 154
Email: [email protected]
Neil McCrae
Phone: 07776 995738
Email: [email protected]
Royal Mail press office out of hours: 020 3338 1007
Disclaimer:
Figures presented in this trading update are not audited. This trading update contains certain statements
that constitute “forward-looking statements”. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors, which may cause the actual results, performance or
achievements of the Group or industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements. Persons receiving
this release should not place undue reliance on any forward-looking statements.
The Group disclaims any obligation or undertaking to update or revise any forward-looking statements
contained in this document to reflect any change in its expectations or any change in events, conditions or
circumstances on which such statements are based unless required to do so by applicable law, the
Prospectus Rules, the Listing Rules or the Disclosure and Transparency Rules of the Financial Conduct
Authority.
About Royal Mail plc:
Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and
delivery services in the UK and the UK's designated universal postal service provider. UK Parcels,
International & Letters (UKPIL) comprises the company's UK and international parcels and letters delivery
businesses operating under the "Royal Mail" and "Parcelforce Worldwide" brands. Through the Royal Mail
Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters
products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a
week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects
and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of
the largest ground-based, deferred parcel delivery networks in Europe.