International Distributions Services plc

(Incorporated in England and Wales)

Company Number: 8680755

LSE Share Code: IDS

ISIN: GB00BDVZYZ77

LEI: 213800TCZZU84G8Z2M70

11 July 2023

INTERNATIONAL DISTRIBUTIONS SERVICES WELCOMES CWU BALLOT RESULT

International Distributions Services plc (IDS) is pleased that members of the Communication Workers Union (CWU) have voted in favour of the Royal Mail/CWU Business Recovery, Transformation and Growth Agreement. 75.84% of eligible CWU members participating in the ballot voted in favour of the agreement.

The agreement provides Royal Mail a platform for the next phase of stabilising the business whilst continuing to drive efficiencies and change. The operational changes in the agreement are designed to be good for customers, increasing our ability to improve services and quality; good for employees, retaining job security and giving people a pay rise; good for the environment, reducing the company's reliance on domestic air, further reducing carbon emissions; and good for shareholders, supporting the long-term sustainability of the business.

The three-year pay deal agreed provides certainty for employees and ensures Royal Mail remains the industry leader on pay, terms and conditions.

As announced on 21 April, the key initiatives in the agreement are:

·    Later start times: From March 2024, start times in delivery will be moved back to help Royal Mail respond to the market demand for more next day parcels, reduce our impact on the environment through the removal of 18 flights a day, improve quality of service and create greater capacity to grow. A programme of work on the pipeline will seek to limit changes to start and finish times in delivery by 60 minutes, with the option to move times up to 90 minutes if needed. The last letter delivery time will move to 4.30pm at this time.

·    Seasonal working patterns: From Autumn 2023 we will deploy new seasonal working patterns. Delivery postmen and women will work 39 hours per week in the peak Christmas season, 35 hours per week in the quieter summer season, and 37 hours for the remainder of the year to better reflect the seasonal variations in letter and parcel volumes.

·    Optimised single parcel network for larger parcels: Currently there is duplication across the Royal Mail and Parcelforce Worldwide networks, with both companies carrying the same format of parcels and visiting the same customers on the same day. The creation of an optimised single parcel network between Royal Mail and Parcelforce Worldwide will maximise synergies between the two brands and improve competitiveness in the delivery of larger parcels.

·    More efficient indoor mail preparation: Currently postmen and women spend up two hours a day re-sorting mail before their delivery round. Under this agreement we will reduce the amount of time spent sorting by 20-35 minutes, so that more time can be spent delivering to our customers.

·    Sunday working: New employee contracts will include a requirement for regular Sunday working, enabling Royal Mail to grow its seven day parcels business and adapt to changing customer demands.

·    The agreement includes a commitment to no compulsory redundancies for the life of the agreement. There will be a joint review of this position in April 2025 to consider whether circumstances allow for the company to extend this commitment.

·    The agreement also covers changes to sick pay, attendance standards and ill health retirement.

Pay offer and profit share scheme

The agreement includes a 10% salary increase and a one-off lump sum of £500 for CWU grade employees in Royal Mail and Parcelforce. This is broken down as follows:

·    The previously consolidated 2% pay rise that applied from 1 April 2022

·    A consolidated 6% pay rise applying from 1 April 2023

·    A one-off non-consolidated lump sum payment of £500 (broadly equivalent to 2% of pay and pro-rated for part-time employees)

·    A consolidated 2% pay rise applying from 1 April 2024.

In addition to the pay increases, agreement has been reached on a profit share scheme over the life of this agreement. Subject to Royal Mail returning an adjusted operating profit in any financial year up to and including 2024/2025, 20% of adjusted operating profit will be distributed as a one-off payment to employees (pro-rata for part-time employees), paid after publication of the company's audited accounts.

The agreement can be found at: www.internationaldistributionsservices.com/en/people/business-recovery-transformation-and-growth-agreement/

We are now working with the CWU to deliver the transformation activity in the agreement and implement the changes agreed.

ENDS

Enquiries:

Investor Relations

John Crosse

Email: [email protected]

Media Relations 

Jenny Hall

Phone: 07776 993 036

Email: [email protected]

Royal Mail press office: [email protected]

Company Secretary

Mark Amsden

Email: [email protected]