RMCtv : For reference-various annoucements/statements

[POSTMAN]

Simon Says

Message from CEO Simon Thompson: Trading update and announcement on a reduction in non-managerial operational roles

After reviewing our trading in the first half of the financial year, we have today issued an update to the market on Royal Mail's performance. We have also made a significant and difficult announcement on the need to reduce the number of roles in the business.

This is ahead of the formal Group presentation of results, which will take place on 17 November 2022.

Financial results in the first half of the year
In today’s update we have announced:
An adjusted operating loss of £219 million in the first half of our financial year. By comparison, in the same period last year we made £235 million profit.
Compared to last year, Royal Mail revenue is down 10.5% and domestic parcel volumes are down 16%.
We now estimate that our full year loss could be around £350 million (excluding voluntary redundancy charges). This may increase to around a £450 million loss if customers move more volume away for longer periods following the initial disruption of industrial action.

Given our reality, there is now an urgent need to reduce the size of our workforce in response to the impact of industrial action, to address the lack of progress on productivity under the Pathway to Change agreement and lower parcel volumes.

We have to make sure we have the right number of people for the reduced volumes passing through our network. I am very sorry to announce that we estimate that our FTE (full time equivalent) operational workforce will need to reduce by an estimated 10,000 by the end of August 2023.

Wherever possible, we will look to achieve this through natural attrition (not replacing people when they leave), and reductions in overtime and temporary staff. However, based on current estimates, c. 5,000-6,000 redundancies in frontline delivery and processing roles may be required by the end of August 2023.

We have already seen major customers move their traffic to competitors due to industrial action. It is important to understand that if industrial action takes place beyond 25 October, the loss for the full year would increase materially and may require further operational restructuring and headcount reduction beyond what we have announced today.

Who will be impacted?
At this stage, we do not have a formal redundancy proposal. This is because the precise number of roles potentially impacted will be subject to consultation. They will be determined on a unit-by-unit basis through a programme of revisions and realignments across delivery and processing, expected to be completed by the end of June 2023.

This will be subject to consultation once unit-based proposals are provided. Those processes will start over the coming months and we estimate people could start to leave the business from February. I appreciate this will be worrying news. I assure you we will do all we can to provide certainty as soon as possible and to give you the support you need. This will include a comprehensive outplacement support programme for any employees who may leave the business to help them to transition to a new career outside Royal Mail.

Will there be compulsory redundancies?
We will try to avoid compulsory redundancies and we will offer a voluntary redundancy scheme. That said, the financial position of the business means that our old voluntary redundancy policy relating to CWU OPG and administrative grades (known as MTSF) is unaffordable. As such, we will consult with CWU on any new voluntary redundancy arrangements.

We will keep you updated during those discussions and we hope to be able to share the new arrangements with you in December 2022.

Where can I find more information?
We know you will have many questions as a result of this announcement so we have set up a dedicated microsite which is available to all colleagues and accessible from any device. This includes a Q&A document, which will be updated regularly and details of how to access our wellbeing advisers and resources to help you at this time.https://www.myroyalmail.com/rm/transformationupdate

You can also email questions@royalmail.com with questions and feedback. Whilst we may not be able to answer all individual queries at this stage, we will point you towards the latest information related to your question and will use the feedback to keep our Q&A materials up to date.

What happens next?
We will try to give as much certainty on any job reductions as soon as we can, subject to consultation with the CWU. Given the acute risk that 18 further days of strike action poses, I have again urged the CWU to immediately call off their planned strikes and join us for talks at Acas. We want the CWU to work with us to try and limit the damage that strike action is having on our business to and job security. We want to find a resolution.

It is very upsetting to bring this news to you. I have met so many hundreds, if not thousands, of dedicated members of staff during my time at Royal Mail. The last thing I wanted was to be in a position where we are having to announce possible redundancies. Royal Mail is a fantastic company, and we can have a bright future. But only if we change. That is the only way we can deliver more for our customers, grow our business, and provide long-term job security.

[POSTMAN]

https://www.myroyalmail.com/sites/defau ... 141022.pdf

[POSTMAN]

CWU

The announcement from Royal Mail Group today is nothing more than their latest misjudged scare tactic.
They genuinely believe they can threaten you into submission.
Below is a statement we have issued to the media.

We CWU will meet Royal Mail Group today because we continue to act in good faith.
We will also bring you a fuller update from the unions leadership later as well.
#StandByYourPost

CWU General Secretary Dave Ward said: “The announcement is the result of gross mismanagement and a failed business agenda of ending daily deliveries, a wholesale levelling-down of the terms, pay and conditions of postal workers, and turning Royal Mail into a gig economy style parcel courier.
“What the company should be doing is abandoning its asset-stripping strategy and building the future based on utilising the competitive edge it already has in its deliveries to 32 million addresses across the country.
“The CWU is calling for an urgent meeting with the Board and will put forward an alternative business plan at that meeting.
“This announcement is holding postal workers to ransom for taking legal industrial action against a business approach that is not in the interests of workers, customers or the future of Royal Mail. This is no way to build a company.”

[POSTMAN]

https://www.internationaldistributionss ... d-outlook/

Royal Mail trading update and revised outlook

International Distributions Services plc is today publishing a trading update and full year estimate for the performance of its UK business, Royal Mail. Trading in GLS has been in line with expectations.

Key points:
• Royal Mail H1 2022-23 adjusted operating loss of £219 million (2021-22: £235 million profit), including around £70 million of direct negative impacts from 3 days of industrial action;
• Royal Mail trading cash outflow in H1 of £274 million1 (2021-22: £114 million inflow). On a pre-IFRS16 basis it was a £330 million1 outflow (2021-22: £64 million inflow);
• We will be starting the process of consulting on rightsizing the business in response to the impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes: Short-term cost efficiencies being achieved through an estimated reduction of around 5,000 full time equivalent operational roles (FTEs) by March 20232 and c.10,000 by end of August 20232 (on a rolling 12 month basis); Based on current estimates, c.5,000-6,000 redundancies may be required by end of August 2023.
• Royal Mail full year estimate: expected full year adjusted operating loss of around £350 million, including the direct, immediate impact of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs. This may increase to around a £450 million loss if customers move volume away for longer periods following the initial disruption;
• Communication Workers Union (CWU) has threatened, but not yet formally notified Royal Mail, of a further 16 days of strikes in November and December. If these take place, the loss for the full year would increase materially and may necessitate further operational restructuring and headcount reduction;
• The ongoing uncertainty means that the Board is unable to give a clear outlook for the full year. Additionally, this situation may lead to an impairment of the carrying value of the Royal Mail business when H1 results are published on 17 November;
• Royal Mail urges CWU to immediately call off planned strike action and embrace our offer of Acas talks to urgently find a resolution to the current dispute.

The position of Royal Mail has deteriorated due to a combination of the impact of the industrial dispute, an inability to deliver the joint productivity improvements agreed with CWU under the Pathway to Change agreement, and ongoing macro-economic headwinds. Although action was taken in H1 to lower labour costs, the business was unable to reduce costs quickly enough in line with deteriorating parcel volumes.

Despite the current financial position, to date CWU has already taken 6 days of industrial action and formally notified Royal Mail of a further 2 days of damaging industrial action on 20 and 25 October, which are expected to go ahead.

Royal Mail expects to incur a full year adjusted operating loss of around £350 million, including the direct impact of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs. This may increase to around a £450 million loss if customers move volume away for longer periods following the initial disruption.

In response, we will be starting the process of consulting on rightsizing the business. Short term cost efficiencies are being achieved through an estimated reduction of around 5,000 FTEs by March 20232 (on a rolling 12 month basis), to better match our costs to current parcel and letter volumes. Our operational FTE workforce will need to reduce by an estimated c.10,000 by the end of August 20232 (on a rolling 12 month basis).

The CWU has threatened, but not yet notified Royal Mail, of a further 16 days of strikes in November and December. Additional days of industrial action beyond 25 October would increase the loss for the full year materially and may necessitate further operational restructuring and headcount reduction.

Wherever possible, we will look to achieve FTE rightsizing through reductions in overtime, temporary staff and natural attrition. However, based on current estimates, c.5,000-6,000 redundancies (frontline roles in delivery and processing) may regrettably be required by the end of August 2023.

We will do all we can to avoid compulsory redundancies, including offering a voluntary redundancy scheme. The financial position of the business means that our legacy voluntary redundancy policy, which offered up to two years’ pay, is now unaffordable. We will consult with CWU on any new voluntary redundancy arrangements.

There is an increased risk of impairment of the carrying value of the Royal Mail cash generating unit (CGU)3, which was £1,366 million at 27 March 2022. Any impairment charge would be classified as a non-cash specific item. An update on the outcome of the impairment review will be provided as part of our H1 results announcement on 17 November 2022.

These results further highlight the need for significant and urgent change at Royal Mail with a further rightsizing of the business and modernisation of working practices. We will continue to take forward a range of initiatives to improve efficiency over the medium term to secure the long-term prospects for the company. We will also continue to push for talks with CWU at Acas, which need to be time bound as the damage from further strikes will only necessitate further changes in the business, beyond those already announced.

Notwithstanding challenging trading conditions across its markets, the performance of GLS remains on track to meet full year expectations of an adjusted operating profit between €370 - €410 million. The business continues to benefit from its resilient business model based on high quality services, wide geographical spread, balanced mix of B2B and B2C revenues and ability to manage costs and pricing.

The Board has always maintained that there should be no cross subsidy in the Group and recognises the need to address improvements in Royal Mail's performance quickly. In the event that significant change within Royal Mail is not achieved, all options remain open to protect the value and prospects of the Group, including separation of the two companies.

A further update on performance will be provided in our half year results announcement on 17 November 2022.

[POSTMAN]

Clean link...
https://www.internationaldistributionss ... 0-2022.pdf

ids-trading-update-14-10-2022.pdf