Royal Mail plc - Royal Mail Group

May 22, 2014 - Moya Greene, Chief Executive Officer, Royal Mail plc ..... Business-to-business (B2B) parcel customers form GLS' core market, representing ...
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Royal Mail plc Preliminary Results for the year ended 30 March 2014 Thursday 22 May 2014




Highlights Royal Mail plc (RMG.L) today announced its unaudited results for the year ended 30 March 2014.

“Our performance was in line with our expectations. We delivered two per cent revenue growth, controlled operating costs and drove strong free cash flow. “We are facing a couple of headwinds. The competitive environment on the parcels side is more intense. We are taking steps to remain the leader in this growing market. “On the letters side, the headwind is direct delivery and we have strategies in place to counter its adverse financial impact. However, without timely regulatory action, direct delivery could undermine the economics of the Universal Service and our ability to generate sustainably a five to ten per cent EBIT margin in our reported business1. “Our key value drivers of single digit revenue growth, margin expansion and underlying free cash flow growth remain the objectives for the Group for the 2014-15 financial year.” Moya Greene, Chief Executive Officer, Royal Mail plc Financial highlights Group Revenue (£m)4 Operating profit before transformation costs (£m) Transformation costs (£m) Operating profit after transformation costs (£m) Operating profit margin after transformation costs (%) - Like-for-like - Reported Profit before taxation (£m) - Excluding specific items - Reported Notional earnings per share (pence) - Excluding specific items - Reported EBITDA before transformation costs (£m) Free cash flow (£m) Net debt (£m) Recommended final dividend per share (pence)

Reported2 52 weeks 2014

Adjusted3 52 weeks 2013

9,456 671 (241) 430

9,146 598 (195) 403

4.2 4.5

4.4 4.4

363 1,666

304 283

26.3 127.7 942 398 (555) 13.3

21.0 52.5 915 334 (906)




£64m £351m

1  The reported business is a subset of UKPIL including network access, and excluding Parcelforce Worldwide and the Royal Mail Property unit. The reported business, as defined by Ofcom, is the entity which provides the Universal Service and takes account of all the costs of both the regulated and unregulated products that depend on the core Universal Service activities.  2 Reported – prepared in accordance with International Financial Reporting Standards (IFRSs). 3 Adjusted - reported 2012-13 results adjusted to exclude the consolidation of POL up to 1 April 2012 and the 53rd week’s additional revenue and costs. In addition, £32 million POL separation costs, taken directly to equity in the Reported basis, were taken through the income statement in the Adjusted basis. See note 1 ‘Basis of Preparation’ for further details. 4 Throughout this document, growth/decline rates and margins are stated on a like-for-like basis, unless otherwise indicated. Like-for-like changes in revenue and costs and likefor-like margins are calculated after adjusting for movements in foreign exchange in GLS’ revenue and costs, and working days in UKPIL revenue. For volumes, like-for-like movements are adjusted for working days in UKPIL. (£m) Movement compared with prior year relating to: Foreign exchange Working days Total Revenue 52 36 88 Costs 48 N/A 48 The cumulative average translation rates for the year ended 30 March 2014 were £1 = €1.185, compared with £1 = €1.226 for the year ended 31 March 2013. 

Royal Mail plc Preliminary results for the year ended 30 March 2014


Business unit (£m) UK Parcels, International & Letters (UKPIL) General Logistics Systems (GLS) Other businesses Group

Reported 52 weeks 2014

7,787 1,651 18 9,456

Revenue Adjusted 52 weeks 2013

7,633 1,498 15 9,146

Like-for-like change

2% 7% n/m 2%

Operating profit after transformation costs Reported Adjusted 52 weeks 52