Royal Mail GroupVirtual shareholder event 2020AGM Statements Transcript

Royal Mail Group
Virtual shareholder event 2020
AGM Statements Transcript

INTRODUCTION
Welcome to Royal Mail’s Annual General Meeting 2020. I’m your Interim Executive Chairman, Keith Williams. This year our AGM is being held under somewhat unusual circumstances given the ongoing Covid-19 pandemic.
The Board recognises the importance of the AGM to our shareholders. We would normally welcome the occasion as an opportunity to meet with you, present to you on the Group’s strategy and performance, and listen and respond to your questions, in person. However, following the outbreak of Covid-19, it has been necessary to make some important changes to the way in which we conduct this year’s meeting.
To ensure the safety of all our stakeholders, shareholders were not permitted to attend the AGM in person this year. We regret that this was a necessary step. But, the health and wellbeing of our shareholders, as well as employees and customers, is of paramount importance.
Earlier today we therefore held our AGM as a closed meeting. I am pleased that all resolutions put to the meeting were passed. The results of the poll are available on our website and have been released to the market.
You are now watching our virtual shareholder event, which we hope will help us meet our commitment to engaging with you as shareholders during these unprecedented times. We know how important it is to address your questions and we value the opportunity to update you on the development of the Group.
So, in this video, you will hear from me, from Stuart Simpson, interim CEO of Royal Mail, and Martin Seidenberg, CEO of GLS. We will cover the Company’s performance for 2019-20, and our progress against some of the key parts of our strategy.
Stuart and I will then answer shareholder questions of common interest, based on the questions that have been submitted by some of our shareholders, before closing the meeting. And, of course, the transcripts of our comments and the Q&A will be available on our website, alongside this video and the poll outcomes, for our shareholders to review.

AGM STATEMENT – KEITH WILLIAMS
Interim Executive Chairman, Royal Mail Group
Turning to the main business, on behalf of the Board the first thing I would like to do is to express our deepest condolences to the families of those who have lost their lives to Covid-19, and to the bereaved families of our own employees. We share your loss. And I want to pay tribute to all our people at Royal Mail and GLS who have been, and continue to be, a source of strength to communities everywhere where we operate. Our staff in the UK were rightly designated as key workers and they’ve lived up to that designation. Through the delivery of vital equipment to the NHS, testing kits to worried families and back to labs again, or the online orders that have kept consumers and businesses going, along with their written correspondence, nearly 31 million households have relied on the Royal Mail. And many in other countries have relied on GLS. Thank you, from the Board and indeed the community, to every one of our people.
I am pleased to say that we have not had to make use of the UK government’s furlough scheme, or to draw down on other government funding, as we continued to provide our key services to the nation.
However, the pressures on us at this time have required us to take other, less palatable short- term measures.
Royal Mail is one of the most widely held stocks in the FTSE, with almost a quarter of our shares held by retail investors and our staff. We recognise that many shareholders rely on the income from their shareholdings. So, the decision not to recommend a final dividend for 2019-20 was a difficult one.

But your Board felt it was right to give ourselves the financial flexibility to manage the business with confidence through the uncertainty created by the current pandemic, and for the same reason, we are not expecting to offer a dividend in 2020-21. Our ambition is to recommence dividend payments in 2021-22, supported by our international business GLS, while we seek to materially improve the performance of Royal Mail in the UK.
We thought it right also to cancel senior level bonuses in the UK for 2019-20. Management below that level, many of whom have worked tirelessly in our operations to keep services going and support our frontline staff, have received limited awards. And I am happy to say we have been able to finance a £200 bonus for frontline colleagues who have worked through the crisis since it began in March. While the current crisis has brought both additional challenges and additional costs, the market changes accelerated by it have also offered us new opportunities. And today I want to talk to you about those challenges and opportunities. Sometimes we focus too much on the former and ignore the many opportunities ahead of us – and indeed there are many.
In GLS, we have a business well positioned to achieve further success in its markets. It already had a successful B2B parcels business and is now being equally successful in B2C. Its most recent performance has been really encouraging – with revenues up around 19 per cent.
In Royal Mail, we also had tremendous opportunity in the rapidly growing customer demand for parcels – both big and small. However, we have allowed our legacy in letters to hold back operational changes which we should have made long ago to anticipate a world with fewer letters and more parcels.
That change has been accelerated and a new world is now with us. The Trading Update we have issued this morning shows that UK parcel volumes grew by 34 per cent in the first five months of the year, while letter volumes excluding elections declined by 28 per cent. These trends may slow
after the pandemic is over, but we do not expect them to reverse.
In both businesses the lift we have seen in parcels traffic has helped us improve our position above that expected before the pandemic took hold. But while this has increased profits in GLS, it has not been enough to halt the long-term decline in Royal Mail performance.
As we had predicted previously, Royal Mail in the UK will make a substantial loss this year and we will not reach profitability – let alone an acceptable level of profitability – without substantial business change. Too many parcels are still sorted by hand and we are failing to adapt our business to fewer and fewer letters – holding on to outdated working practices and a delivery structure that no longer meets customer needs.
We are at a crucial juncture for Royal Mail. But as I said we are not without opportunity. If we can adapt our business quickly enough, we will be well positioned to meet our customers’ demands for more and more items, to and from more people, delivered more frequently. If we don’t, the market will move away from us and we will be consigned to delivering a reducing volume of letters and struggling to meet demand in the growing parcels market.
Our people, our trusted brand, and our role in society all provide grounds for optimism and should provide strong foundations for a successful future. Additionally, today we have both a solid balance sheet and the operational leverage to make that change possible. But we need to move quickly, the window of opportunity is open to us now. In the past we were accustomed to moving at a snail’s pace and believed that the market would come to us. But change in the market is there for us to capture and if we don’t rise to that challenge, others will.
As you may remember, at our financial results in June, Stuart Simpson and I set out a three-step plan.
First, the immediate step-change in ways of working needed to accelerate the pace of change.

Second, the co-operative step-change needed in how we, our people and the trade unions work together to accelerate rather than slow down change.
Third, the regulatory step-change needed to ensure that our regulatory obligations allow us to meet our customers’ changing demands and deliver what they want in a financially sustainable way.
So, what have we done since June?
First, the immediate steps. We have taken action to speed up decision-making and improve our financial position. We have streamlined management processes and will reduce our costs. These changes have helped us to focus capital expenditure on delivering key projects and delivering them more quickly. Stuart will tell you more about the progress we’re making there.
Second, discussions with our unions. We have been in ongoing discussions with both Unite CMA and the CWU on the changes which are needed. We are in consultation with Unite CMA about the management restructuring, as well as discussing many other business issues with them. And in July we began a programme of talks with CWU covering five key strands.
Both Royal Mail and CWU have entered the talks with a positive and constructive approach. We have made good progress in a number of areas and we have tabled changes that we need to make. However, it is disappointing that we have not yet been able to reach agreement. We have increased the intensity of our discussions in recent weeks in recognition of the need to make progress more quickly.
To be clear we will not be successful without that change, and that change is best achieved together. For example, we want to work together on our network strategy to support our new parcel hubs and trials of separate daily parcel deliveries. We need to dispense with old, outdated ways of working, such as handwritten sign-in sheets, moving to automated clock-in, clock-out systems as used by other businesses for decades.
We need agreement so we can move quickly to get local sign-off on the removal of old letter-sorting machines, unneeded when letter volumes have halved since 2004. And we need to be able to review – and where needed revise – our processing and distribution operations, and our-postmen and women’s walks, at least once a year so that we can adapt these in line with the rapid declines in letter volumes.
These changes may seem small and obvious to the outside observer. But without them, we cannot achieve essential improvement in operational efficiency and better focus our efforts on the ever- increasing demands of our customers.
The third part of the plan is about working with the Regulator and Government on the Universal Service Obligation. As I indicated earlier, Royal Mail has an unparalleled opportunity for growth in the demand for parcels and possibilities beyond given our position in the market. And letters will always be important. But we need the flexibility to deliver what our customers want. We have surveyed the views of thousands of people and small businesses about what they want from the postal services. We have also held hundreds of sessions with colleagues up and down the country about how they think the Universal Service Obligation, or USO, may need to change for the future.
The headline insights that we have gained are clear. First, our customers want to retain the ‘one price goes anywhere’ principle of the USO. Second, they want more ways to send letters and parcels – whether it’s online postage or parcel postboxes – and more frequent and convenient parcel deliveries. We want to look again at whether there is enough customer demand for a seven-day commercial parcel service. And thirdly, although they are posting fewer letters, and expect to be receiving more parcels in future, they still want an affordable next-day letters service so that they don’t need to rely on more expensive couriers.
These findings tell us that the best way to ensure the Universal Service continues to meet our customers’ needs is to rebalance our service model more towards the growing parcels market, particularly urgent parcels, and urgent letters.

But to be clear, this does not mean following other countries, such as New Zealand or Italy that have reduced letters delivery to three days a week in some areas, for example. We will keep delivering letters to every part of the UK, for one price. And we would like to deliver the items that customers want more often, not less.
But to do that we need a regulatory system fit for the future rather than the past. In the last five years the profits of the Reported Business of Royal Mail – the regulated entity – have fallen by around 95 per cent.
It will be materially loss-making this financial year. The upcoming Ofcom review of both user needs and its wider postal regulatory framework will be vital in securing a platform which permits both the investment required to deliver the USO demanded by the public, and for that service to be delivered sustainably.
It does not make sense for us to be obliged to allocate our resources to delivering what our customers don’t value highly, rather than what they do. So, we are currently exploring what a rebalanced Universal Service might look like.
Over the coming weeks we will be meeting with more customers and other stakeholders to explore these issues in more detail. We will factor the findings into our thinking and share them with Ofcom and the Government in the Autumn. Any substantive change is a matter for the Regulator, Government and ultimately Parliament – but we need to make sure this process is considered swiftly given the rapidly changing customer needs and the financial sustainability of the Universal Service.
One thing is very clear – we remain committed to the universal, affordable, ‘one price goes anywhere’ nature of the USO. Our unique responsibility began in 1840 when the world’s first adhesive postage stamp, the Penny Black, was used as payment to create a uniform postage service. Times may have changed a lot, but there remains a vitally important role for the Royal Mail in UK society. The recent Covid-19 crisis has underlined this. We need to work with our Government, Regulator, unions and people to
ensure a financially sustainable Royal Mail can meet changing customer demands through the 21st century.
Finally, I would like to touch on changes to the Board over the past year. In May, we announced that the Board and Rico Back had agreed he would step down as Group CEO and from the Board with immediate effect. On behalf of the Board, I would like to again thank Rico for his contribution, and in particular recognising the importance of parcels to our future business.
Stuart Simpson has been appointed interim CEO of Royal Mail. Stuart has spent over a decade at Royal Mail, including three years as Chief Finance Officer and a Board member. I have taken on the role as Executive Chair on an interim basis, for a short time only, until a permanent appointment is made. A comprehensive internal and external search for a permanent CEO of Royal Mail is currently underway.
Since the last AGM I am also pleased to welcome Baroness Sarah Hogg as Senior Independent Director, and Lynne Peacock to the Board during the year. The breadth of experience of our Board members has already benefitted the Company during a busy time and I thank them for their continued work at this demanding and crucial time in the company’s history.
So finally, just to summarise, Covid-19 has accelerated the market trends we were already experiencing. We have seen three or four years of change in parcel and letter volumes in a matter of months. Our plan in the UK is to improve efficiency in letters and transform our parcels operation. And we need to move forward as quickly as we can.
We’ve taken immediate steps to stabilise business performance and set the Group back on a path towards profitability, while in GLS we already have a clear opportunity for profitable growth.
Meanwhile, I would like to reiterate my profound thanks to everyone at Royal Mail. The dedication, fortitude, and, most of all, commitment of our people to delivering a little cheer alongside the

daily post has reminded the public of the crucial human role we play in a digital world.
I’m now going to hand over to Stuart.

AGM STATEMENT – STUART SIMPSON
Interim CEO, Royal Mail
Thanks Keith.
I’d like to echo those thanks, by saying it really has been remarkable what everyone at Royal Mail has done, how people have come together, the frontline, the managers, the unions, to keep the country moving and connected in this extraordinary time.
Just to reiterate, we are a people business, both in terms of the numbers that we employ but also the service that we provide. The Covid-19 challenge that the country has faced has shown the value of Royal Mail, to the communities, to the businesses, to the people who we’ve kept connected at this time. And the enthusiasm and energy from everyone in Royal Mail to do that, whether it’s frontline, or back office, to make changes in how we work, has been tremendous.
The changes that we managed to put in place in an incredibly short period of time, because we all came together and worked on it, was amazing. At its peak, we had around 20 per cent of staff off sick, yet we still kept delivering for the country. That speaks a huge amount to the commitment and motivation of our managers and our frontline and unions to engage positively when there is a challenge. Harnessing that enthusiasm and energy is something we must continue to do.
I’m going to talk to you today about our financial performance and give you a bit more detail on the progress we have made in our transformation. I will also touch on a number of key issues for the business that I know a lot of our shareholders really care about, such as the work we are doing to reduce our environmental impact, and what we are doing to become a more diverse and inclusive employer.
As Keith mentioned, we’ve seen incredible growth in parcels. This is testament to the great service we provide, the innovations we are launching and the trust that our customers place in us which is even more important in times like this.
In our Trading Update issued this morning, we announced that in the first five months of this year at Royal Mail, we’ve seen elevated parcel volumes with growth of 34 per cent. That’s 177 million more parcels than last year, and revenue growth of 33 per cent. In parcels – this growth has been seen in almost every sector we support but most profoundly in e-commerce as people shopped much more online. A trend that we expect to continue.
But there is no question there’s been a huge acceleration in the decline of addressed letters, from around 8 per cent to 28 per cent in the first five months of the current year. In the first five months of this year we saw around 1.1 billion fewer addressed letters sent than the same period last year. That is a staggering reduction.
Total letter revenue is down around 21.5 per cent in the first five months. So overall in the UK we’re now seeing revenue from parcels growth offsetting the decline from letters, and year on year revenue in Royal Mail is £139 million higher in the first five months.
You may remember that we set out two scenarios for 2020-21 in our Annual Report. Whilst to date Royal Mail revenue is currently better than shown in Scenario 1, costs are currently higher than expected and are likely to remain challenging for the rest of the year. The estimated costs of Covid- 19, in terms of absence, social distancing, PPE, overtime all of which was done to keep people safe as we can, were £75 million in the first five months. And, additional parcel volumes also bring additional costs.
There are still significant ongoing challenges including the impact of the recession, a potential second wave of Covid-19, changes to international postal rates and the potential frictional impact on cross border trade from Brexit.

Looking ahead, letters will still be an incredibly important part of our business in the future. So, we have launched a range of initiatives to stimulate the market, and we’ll do everything we can to get those letters back into our network.
However, we do have to face the fact this is going to be a different business going forward. We’ve effectively got three or four years’ worth of change that we talked about landing right now, and we need to face into that, and make the changes that are absolutely vital to address those challenges and put us on path to being a sustainable business for the long-term.
However, the window of opportunity is rapidly running out. The profitability of the Reported Business in the UK has declined by around 95 per cent over the last five years. It is expected to be loss-making in 2020-21. That position is clearly unsustainable and needs urgent action.
As Keith has pointed out, the strategy we laid out before is broadly correct. We need to automate the parcels upstream. Sorting over a billion parcels manually is just not a way to be efficient or make a profit and has been a real challenge for us during these last few months. And then we also need to change delivery to meet the evolving customer and consumer needs.
We have made progress over the past year on our transformation. We’ve successfully launched a series of major new services and customer innovations that our customers love. That pace of change continues to accelerate. From estimated delivery times, new digital channels like the Royal Mail App, a unique nationwide network of parcel postboxes, inflight redirections, priority postboxes to help in the swift movement of Covid-19 tests and a host of other changes.
In terms of the network design, we landed the 20th automated parcel sorting machine in May. The percentage of parcels sorted by machines in our Mail Centres at least once was 33 per cent at year end, which is close to three times the average number sorted during 2018-19. We will continue to increase installation of parcel sorting machines into all of our remaining Mail Centres over the next
three years. This automation is enhancing both the quality of service we provide and the efficiency of our operation.
In June, we said were about a year behind in the delivery of our automated parcel hubs. It took us too long to sign with a supplier of the automation system. But we have now stepped up the pace in the delivery of our transformation. I am pleased to say that we have now signed the contract with the supplier for our new state-of-the-art parcel sorting machine in the North West hub, in Warrington, which we expect to go live in 2022. We have also secured planning permission for our new hub in the Midlands and construction work is about to start.
The continued structural decline in letters is also driving the removal of automated letter sorting machines
in our operation, with 109 machines removed or decommissioned in under 18 months – around about 14 per cent of the total.
And in January 2020, we launched a van-based trial to test a separate daily delivery of larger parcels and Next Day items. The trials began in Swindon and were expanded to include Crewe and Manchester South West. Once these ongoing trials are complete, we will work though the outcomes with our people and our unions.
As Keith said, at our results we said we needed to take some immediate actions to deal with the impact of Covid-19.
To drive a cultural change, to improve accountability and responsibility we took the difficult decision reduce our management population. As part of this, around half of Royal Mail’s senior leaders and most senior managers are expected to leave the Company. In total, we expect to reduce the number of management roles in the UK by around 2,000 this financial year, delivering a saving of £130 million next year. This change is about making us a leaner, more commercially focused organisation. But that does not detract from the fact that many hard working, highly valued colleagues are leaving our business. We are committed to conducting the consultation

process carefully and sensitively, working closely with our people and their representatives.
The next example of immediate change is a real push on our non-people spend. A good example is better fill rates on lorries. What I mean by that is making sure every lorry is full before we move it, improving the revenue density per vehicle. We will aim to keep our non-people costs, excluding depreciation, in 2021-22 in line with the level of last year, 2019-20.
On capex, we’ve already identified £250 million that can be saved over the next two years. Following a review, we’ve identified projects that are no longer necessary, projects that can be delayed, and efficiencies across a number of projects that means we can still deliver what we need, but for a lower cost.
Covid-19 has not created our financial challenges. It’s not created the business challenges that we are facing into. But it has accelerated them, but these are not new things to us. We knew we had to automate parcels. We knew we had to revise delivery. The fact is, it’s come at us much quicker, roughly a three or four years of acceleration. We need to move faster. We can and we will do so.
We do not believe that these measures will be enough, in themselves, to ensure a sustainable future. That is why it is vitally important to work with our unions and our people to achieve long term change in our business, and to work with the Regulator, Government, our customers and other stakeholders on the forthcoming reviews of user needs and the future postal regulatory framework.
I would also like to use this opportunity to talk about some of the changes we are making to make our company more diverse and inclusive, and to play our part in delivering a cleaner future.
Currently around 14 per cent of UK employees identify themselves as being from a black, Asian or minority ethnic background, which is broadly representative of the UK population. But we recognise we need to ensure that this diversity is spread across the whole of the Royal Mail, particularly at senior manager level.
One of my first actions when appointed to this role was to make sure that our Executive Board address all issues of diversity directly through the Executive Board. The team will take an active role in how we deliver the diversity and inclusion agenda across our organisation. We are proud to be inaugural signatories of the BITC Race at Work Charter and are running a series of mentoring and career progression initiatives designed to support our BAME colleagues in their career progression. This year we also held a series of focus groups to understand the challenges for our BAME colleagues in our senior levels. We are using the feedback to help design Inclusive Leadership workshops, and to establish new ethnic diversity targets towards 2024. This is something I am personally very focussed on.
This year I was really proud that Royal Mail has been included as a Times Top 50 Employer for Women for the seventh consecutive year. Overall, women now make up 19 per cent of our UK workforce. This proportion increases to 32 per cent among senior managers, 38 per cent at UK Executive Board level and 50 per cent at main Board level. This is something that I am keen that we build on in the future – we have lots of incredibly talented women throughout our organisation and it is important that we continue to support their development in Royal Mail.
I also want to touch on our commitment to delivering a cleaner future. Environmental considerations are a fundamental part of the way we operate. Royal Mail is unique in that a large proportion of our ‘final mile’ deliveries are undertaken on foot, rather than using vehicles. With the UK’s largest ‘Feet on the Street’ network of around 90,000 posties, Royal Mail plays a key role in keeping carbon emissions low.
This year, we developed a new, more stretching environmental strategy, which includes a target to become a net zero carbon emission business in the UK by 2050. This will be supported by a range of initiatives, including continuing to increase the number of electric and alternative fuel vehicles in our fleet. During the year, we added an additional 193 electric vehicles to our UK fleet, and continue to trial other alternative fuel types such as Bio-

CNG which emit significantly less CO2 than their diesel equivalents. We recognise that these are big ambitions. We look forward to working with all of our stakeholders – including our shareholders and investors – to help make them a reality.
So, in conclusion, again, I’d like to thank all the people within the business for the remarkable job they have been doing over the past few months. I’ve felt incredibly proud and humbled being out in delivery offices and Mail Centres around the country recently. If we harness that enthusiasm and continue to focus on great customer service, day in day out, we can and will make a huge difference.
Our existing plan to transform from a UK-focused letters business that delivers parcels, to a parcels- led network that also delivers letters, is the right one. But our business faces significant financial pressures. We have a plan to ensure Royal Mail remains a key part of our economy, and a good employer, and the UK’s delivery partner of choice. But delivering it requires a step change in the number of major initiatives we can successfully deliver in a short period of time.
The past few months have shown us the incredible things we can achieve, against the odds, if we work together. The challenges we face are significant, but I believe if we can harness that same spirit and optimism,
we can get there.
I’ll now hand over to Martin, who will provide an update on GLS.

AGM STATEMENT – MARTIN SEIDENBERG
CEO, GLS Group
Thank You Stuart.
Hello, my name is Martin Seidenberg and I am the CEO of General Logistics Systems, GLS. At GLS we operate an international parcel delivery network, covering all major European countries. In the last few years, we have expanded our reach and are now also operating in a number of states in the US and in the Eastern part of Canada.
GLS is a portfolio of local businesses that are connected to one international parcel network. This means that if you ship a parcel from Berlin to Lisbon for example, the parcel will not leave the GLS network as GLS can fully cover the entire operational process. This is a unique differentiator in the market, and it allows us to deliver excellent quality.
GLS has been part of the Group for over 20 years now and has been an important growth engine. I’m proud of what we have accomplished so far. 2019-20 was our best year and we are eager to continue this positive trajectory. Today I would like to update you on the challenges of Covid-19, our financial performance and key developments.
How did we do in recent months during the peak of the Covid-19 pandemic?
During Covid-19, GLS people delivered remarkable results. GLS has continued to connect our customers, businesses and communities during this extraordinary time. The effort and commitment to ensure that parcels were delivered all over Europe, in the US and Canada was very impressive. I am very proud of our people for the way they have kept the businesses running and delivered an excellent quality for our customers.
We have remained operational throughout the Covid-19 pandemic in all of our markets and thus supported the community by allowing them to receive their parcels and goods. Since the start of the pandemic, our first priority has been to protect our people.
We have invested in Personal Protective Equipment like facemasks, hand sanitizers and implemented social distancing in our facilities. And we will continue to do so. Delivering a parcel whilst being socially distanced was challenging and so we quickly redesigned our processes to protect our people and customers.
Covid-19 did not only change the delivery process, we have also seen a step change in our markets. The most important developments are:

Firstly, the significant volume increases seen during and after the lock down period.
Secondly, a shift to home deliveries and less so to businesses, which were closed during Covid-19. The proportion of home deliveries has increased, and this increase was much higher than we have seen in previous years.
Thirdly, we also noticed that recipients’ requirements changed together with the shift towards home deliveries. Parcel recipients appreciate transparency and flexibility around delivery, such as tracking transparency, estimated delivery times and easy ways to leave parcels in a safe place.
Additionally, as several countries were simultaneously in shutdown, people started ordering more items across borders. And, our own GLS European network, was able to deliver those parcels across Europe. So, we have also seen a significant increase in international volumes.
Due to the quick response of local management and our flexible structure, GLS was able to reshape its business to take account of these new developments in a short period of time. We have quickly increased our capacity and adjusted our network and processes accordingly.
What was the financial performance of the last months?
The good operational performance of GLS is reflected in our financial performance. In the first five months of this business year, GLS managed to further improve its results compared to the last year.
Volumes are up on last year which has resulted in a positive revenue development. As I said before, growth is coming principally from shipments to home and international addresses. Revenues have increased significantly in GLS companies which already had a relatively high focus on home deliveries
pre-Covid-19, for example GLS Spain and GLS Europe East.
As a result of the revenue growth in the GLS Group, profits are above the prior year. These results were also positively impacted by a better performance of last year’s underperforming countries, like France, Spain and US.
It can be said that going forward GLS is emerging stronger from the coronavirus crisis and we are very proud of that – but we are aware that some of the current developments may be temporary. But we are cautiously optimistic that the growth in volumes and revenues visible to date is sustainable over the longer term, and that GLS can participate in the expected growth in home and international deliveries in orthcoming years.
A weak economic outlook could harm the positive development of our business, that’s for sure. We are already anticipating a slow-down in volume growth in the second half of this year due to a deterioration in the global economic environment, the extent of which is largely predicated on the resilience of our key markets’ economies.
GLS will have to remain flexible to respond to local market changes swiftly, and we will. Our strategy is evolving. The experience gained during the Covid-19 crisis has cemented our belief that GLS can service growth markets, whilst at the same time protecting or improving margins.
Going forward, and considering our strong market positioning, we aim to differentiate based on our strengths: a strong domestic and international network, expertise in business and home deliveries and our high quality. We will tailor our investments to further strengthen our competitive advantage and capture growth opportunities.
Right now, GLS is preparing for the Christmas peak. It is expected that volumes will be high, and operations will be challenged. We will remain focussed on the high quality of our network to provide our services to our customers as promised. That is what counts for our customers. So, in conclusion, GLS is performing well and we are taking the right measures to continue this positive trajectory. My expectations are high for the future, I have a fantastic management team

and we are highly motivated to continue on the growth path that we have embarked on.
Thank You very much.

CONCLUSION
Thank you, Stuart and Martin for those helpful updates. Thank you to all of our shareholders who submitted questions to the Board in advance of today’s meeting.
As always, your continued interest in, and support for, this Company is very much valued by your Board. Thank you everyone for joining. May I take this opportunity, on behalf of the Board, to send you all our best wishes. We look forward to meeting you again, in person, soon.
Thank You.

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