International Distributions Services (IDS) Q3 24/25 TU earnings summary

Executive summary

• Achieved strong operational and financial performance in Q3 2024, with Royal Mail on track to return to adjusted operating profit for FY 2024-25 after two years of losses.

• Royal Mail delivered over 99% of items on time during the Christmas period, with tracked parcel volumes up 19% year-over-year.

• GLS performed in line with expectations, with export volume growth and strong results in Spain and Poland, despite challenges in Italy and Germany.

Financial highlights

• Group revenue for Q3 2024 was £3,619m, up 0.8% year-over-year; Royal Mail revenue rose 2.4% to £2,335m, and GLS revenue declined 2% to £1,284m.

• For the nine months ended December 2024, group revenue increased 5.5% to £9,972m; Royal Mail revenue grew 7.5% to £6,256m, and GLS revenue rose 2.1% to £3,716m.

• Royal Mail total parcel volumes grew 2% in Q3 and 6% for the nine-month period; addressed letter volumes declined 7% in Q3 and 6% for the nine months.

• GLS saw 1% parcel volume growth in Q3 and 3% for the nine months; revenue growth in Euros (excluding acquisitions/disposals) was 2.5% in Q3 and 4.9% for the nine months.

• US parcel business profitability improved following the disposal of the freight business.

Outlook and guidance

• Royal Mail remains on track to return to adjusted operating profit (before voluntary redundancy costs) for FY 2024-25, a key milestone in its turnaround.

• The recommended offer by EP UK Bidco Limited is expected to become unconditional in Q1 2025, subject to conditions.