Slide 1 Cover

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Slide 1 - Cover
Business Post Group plc
one of the UKs leading express delivery
companies
2001/02 Prelims Presentation - May 2002
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Slide 2 - Presenters
Presenters
Paul Carvell (Chief Executive) Peter
Fitzwilliam (Finance Director)
2002
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Slide 3 - Programme
Programme
Introduction Paul Carvell Financial Review Peter
Fitzwilliam Business Review Paul Carvell
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Slide 4 Business Overview
Business Overview

• UK express parcel delivery
• gt90 for next day delivery
• c95 business-to-business
• Equal 4th largest and largest non-Post Office
  owned
• National service through network of 63 depots -
  20 owned and 43 franchised

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Slide 5 Delivery Market
Segmentation of the Delivery Market
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Slide 6 2001/02 Highlights
2001/02 Highlights

• Pre-tax profit up by 18.9 to 15.1m on turnover
  up 6.5 at 131.7m
• Turnover and profit improvements an achievement
  in a subdued market
• On-time delivery performance improved to gt98
• FedEx contract commenced on 3 September 2001
• Substantial development of HomeServe,
  International, UK Today and UK Mail put in
  motion, following a strategic review
• First mover advantage obtained in UK business mail

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Slide 7 The Next Phase
Entering the Next Phase

• 2001/02 was a year of tactical improvements
• Significant progress has been made against
  initial objectives
• 2002/03 is the first of a three year strategy and
  will be a year of investment

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Slide 8 Initial Objectives
Initial Objectives - May 2001

• Operations
• service levels improved
• customer retention improved
• costs reduced
• claims reduced

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Slide 9 Initial Objectives
Initial Objectives - May 2001

• Franchising
• closer management quarterly reviews, Franchise
  Board
• new franchise opportunities net 5 gained in year
• Sales
• unit revenues up

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Slide 10 Initial Objectives
Initial Objectives - May 2001

• Information Technology
• scanning compliance up, claims downs
• Finance
• debtor days down
• credit risk bad debts down
• FedEx
• successful implementation achieved

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Slide 11 Profit Loss Account
Summarised Profit and Loss Account
2002 2001 Increase Turnover (m) 131.7 123.7 6.5
Operating profit (m) 14.6 12.3 18.7 Pre-tax
profit (m) 15.1 12.7 18.9 Earnings per share
(p) 20.0 16.9 18.3 Dividends per share
(p) 16.0 15.1 6.0
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Slide 12 - Turnover
Turnover Growth
Parcel revenues per day - H1 4.5 Parcel
revenues per day - H2 9.5 Parcel revenues per
day 7.0 One less day/other -0.5 6.5
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Slide 13 Parcel Revenue
Parcel Revenue per Working Day
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Slide 14 Parcel Revenue
Parcel Revenue per Working Day
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Slide 15 Profit Margins
Gross Profit Margins
2002 2001 H1 23.8 22.5 H2 24.2 23.8 24.0 23
.2
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Slide 16 - Expenses
Administrative Expenses
2002 2001 m .m Bad debts (inc
Tiny) 0.8 1.3 -38.5 IT-related 4.2 3.8 10.5 All
others 12.0 11.2 7.1 17.0 16.3 4.3
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Slide 17 - IT
IT
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Slide 18 Cash Flow Statement
Summarised Cash Flow Statement
2002 2001 m .m Pre-tax profit 15.1 12.7 Depre
ciation 3.6 3.6 Working capital 1.0 1.7 Franchise
financing (3.4) (0.2) Capital expenditure (3.3) (4
.1) Tax (4.3) (5.0) Dividends (8.2) (8.0) Movement
in net cash 0.5 0.7
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Slide 19 Balance Sheet
Summarised Balance Sheet
2002 2001 m .m Fixed assets 29.6 29.7 Current
assets 32.6 29.9 Creditors lt1 year (17.8) (17.4)
Long-term liabilities (1.0) (1.0) Net
assets 43.4 41.3 Net cash 6.7 6.2 Post-tax
ROCE 24.9 21.8
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Slide 20 - Strategy
Strategy

• The provision of time-definite delivery services
• UK business-to-business parcels (Express)
• UK business-to-consumer parcels (HomeServe)
• International parcels and mail (International)
• UK same day business couriers (UK Today)
• UK business mail (UK Mail)
• Shared activities centrally managed (Network
  Services)

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Slide 21 - Express
Express

• Remain a premium rather than a volume player
• Carl Hutber, ex National Sales Manager, appointed
  MD
• 72 hour service is being upgraded to Parcel Post
• UK Pallet Express launched in December to be
  developed further
• Focus on yield management
• Customer service improvements - Discovery

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Slide 22 - Homeserve
HomeServe

• Specialist sales approach
• Bill Chacksfield, ex TNT/White Arrow MD,
  appointed MD
• Sales teams to be rolled out
• Dedicated/alternative delivery rounds
• Collectpoint

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Slide 23 - International
International

• FedEx
• 5 Year UK Global Service Participant contract
  commenced 3 September
• Chosen for service enhancements (not cost
  reductions),IT solutions and contract fit
  (premium provider)
• Huge project management effort prior to start
• Operating to very high performance levels
• 10 of annualised turnover
• Positive effects on profits, standards and
  reputation

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Slide 24 - International
International

• Cross-selling from Express
• Brian Jenkins, ex Target Sales Director,
  appointed MD
• Existing products re-vamped training rolled out
• Continental Europe
• Rest of World via FedEx
• New products to be introduced

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Slide 25 UK Today
UK Today

• Previously Courier Direct
• Martyn Wilson, ex TNT National Ops Manager,
  appointed MD
• UK Today launched August 2001
• Stand-alone model trialled in 2001(out of 6
  depots at 31 March 2002, 18 now)
• Aggressive roll-out planned (52 by March 2004)
• Value Added Services once national network
  established

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Slide 26 UK Mail
UK Mail

• Business Class - two day service
• One year interim licence granted in November 2001
• Positive PostComm report of 31 January 2002
• On 11 April 2002, UK Mail asked Postcomm to
  determine Consignias tariffs
• Bill Cockburn (Chief Executive of the Post Office
  1992-95)
• appointed Deputy Chairman of Business Post and
  advising UK Mail
• Guy Buswell, a main Board Director, to become MD
  from 1 July
• Collaboration with Pitney Bowes

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Slide 27 Network Services
Network Services

• Provide high quality collection and delivery
  services
• Steve Chatwin, ex National Operations Manager
• Look for efficiencies to drive down unit costs
• Leverage the strengths of franchising

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Slide 28 - Franchising
Franchising

• High quality local service and entrepreneurial
  spirit
• 2001/02 a difficult year for franchisees
• FedEx contract required a step change in their
  business
• Business Post support through financing
• Additional remuneration from 1 April 2002

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Slide 29 Current Trading
Current Trading

• In the 7 weeks to 18 May 2002, turnover was up
  11
• Service performance levels remain high
• Costs tightly managed

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Slide 30 - Prospects
Prospects

• 2002/03 a year of investment for the future
• 2003/04 and 2004/05 investment expected to have
  a material beneficial effect

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