Growing our business

Matthew Lester

Group Chief Finance Officer

2

Non-People

Inflation - procuremen

t

Value Drivers - GroupRevenue Costs Profit Free Cash

UK LettersDown 4-6%

+ RPI

People Wage rates

– productivity

+ IT

Investment

£665m£403m4.4%

For every

£1 earned

we make

4p

£334m

Transformation

£0.2bn

GLS ParcelsEuro GDP

UK Parcels B to C growth+ RPI

EBITDAGrow profits

£9.1bn

Past Peak2013/14

Grow in line

with our peers

3

Revenue Growth – UKPIL Parcels £2.9bn*

Maintain share of a growing market

Revenue

*Year to March 2013

UKPIL Parcels B to C growth

+ RPI

4

Revenue Management – UKPIL Letters £4.7bn*

Growing MarketReach & Keep me Posted

UKPIL Letters Down 4-6%

+ RPI

*Year to March 2013

5

Managing our costs - People

2–3% Productivity by core network optimisation & efficiency everywhere

CostsPeople

Wage rates – productivity + IT

More IT investment

6

Managing our costs – Non people

Procurement reduced costs £64m

Managing demand and cutting waste

Non-People Inflation -

procurement

7

Investment

•Past peak of transformation investment•Parcels expansion •Barcoding & Tracking•Address IT and make it a commercial opportunity

ModernisationFocused

Revenue GrowthFocused

CashInvestment£665m

8

Growing Cash FlowDouble free

cashflowGrowing MarketReach = Critical to helping

offset decline in letter

Procure well, manage demand and cut waste

Bigger share of a growing parcels market

More investment in IT Parcels capacity

Barcoding & Tracking

2–3% Productivity & continue optimising core network