Good morning, everyone, and welcome to International Distributions Services half-year 2022-2023 results presentation. I'm Sabreen Khan from Investor Relations. Just before we start, I wanted to draw your attention to the usual disclaimer in our release this morning on forward-looking statements. This sets out examples of the factors that can cause actual results to differ from any forward-looking statements that we may make. A summary of the principal risks and uncertainties which could affect the Group was set out in today's release, and these will be updated in the Annual Report next year. All of these risks and uncertainties have the potential to impact the Group's business results of operations, financial conditions, and prospects adversely. Without further ado, I'll hand over to our Chair, Keith Williams. Keith, over to you. Thanks, Sabreen. Thanks for taking over from John Crosse, who unfortunately has been in hospital and is ill today. Hopefully he'll join us next time round. Good morning, everybody, and thanks for joining us. We're trying to get in obviously before the Chancellor's Autumn Statement later this morning. I'm joined as usual by Mick Jeavons, our Group CFO, Martin Seidenberg, CEO of GLS, and Simon Thompson, CEO of Royal Mail. I'll start with an overview and summary before I pass on to each of them to give you more detail. In May last year at our annual results, and again in July at the AGM, we said that the benefits from the pandemic were clearly behind us and that both our businesses were facing into headwinds, particularly from high inflation across all our markets, and that obviously includes the U.K., Europe and North America. We said that Martin at GLS was well-placed with a good business spread geographically and with good product mix. That's proved to be true, as you can see from the GLS results today. We also said that Simon at Royal Mail had a much more difficult task because of the requirement to deal not only with cost inflation in the U.K., particularly in higher labor costs, but also the urgent transformation in his business to adapt to changes in consumer demand. In a regulatory regime that has so far been unchanged, the case for regulatory change has never been more clear. We indicated that Royal Mail was accordingly at a crossroads, and that has proved to be true, as you saw last month in Royal Mail's results. It will be unprofitable without change. Simon's addressing this and will outline the immediate actions being taken to effect operational change across the U.K. Finally, we said that in the event of a significant operational change at Royal Mail is not forthcoming, the Board will consider all options to protect the value and prospects of the Group, including the separation of the two companies, and that position today is unchanged. Commenting on the results, you know, as anticipated, GLS is on track to weather the short term but also deliver over the medium term on its Accelerate target. Martin will talk to the progress on both in a moment. Our capital investment in GLS is unchanged as it focuses on its targets to become more digital and global. Since taking over at Royal Mail, Simon has invested in the capabilities to build its future success in new revenue streams, in infrastructure and automation, in new management structures, and in trying to build an improved dialogue with the trade union. These remain important investments, but we now need more immediate action. We've a strong balance sheet and brand, but urgent need for a business model that matches the needs of our customers. The current level of losses in Royal Mail is not sustainable and not primarily attributable to the impact of strikes. Indeed, the fact that our customers are to date sticking with us in difficult circumstances underline that we can succeed, but we need to change to do it. While welcoming talks with the CWU, we can no longer hold back on the changes which will secure the long-term sustainability of Royal Mail business in the interest of all its stakeholders. As you know, we gave notice on a number of agreements in September, and Simon will outline what is now happening and can no longer wait. Finally, if we look at group issues, the steps to change the name of the holding company is now complete. We still of course have two strong brands beneath the holding company. As you can see, the new structure enables stakeholders to more easily see the performance of the two businesses. The appointment of Jourik Hooghe to the Board has been a good one. He's making valuable contributions and brings experience across a number of areas and augments the Board with his international perspective. Finally, the Board has decided not to pay an interim dividend given the current level of economic uncertainty and the position in the U.K. As we've pointed out, firstly, we have a strong balance sheet. Secondly, other than through the pandemic, in recent years, the dividend has been supported much more by GLS than it has by Royal Mail. We'll review the position on dividend in the light of GLS's performance and that of the Group at the year-end. Those are my introductory comments. I'll now pass over to Mick to give you the detail of the financials. Thanks, Keith, and good morning, everybody. I'll take you through some of the details behind what has been a really quite a tough half year, and then I'll reflect on the implications for outlook and capital allocation. Of course, as Keith headlined, both of our businesses have been hit by the macroeconomic challenges of inflation and the slowdown in consumer spending. GLS has shown itself to be far better able to cope with the environment than Royal Mail. Royal Mail has been impacted very materially by the situation, its losses further exacerbated by industrial disruption and an inability to keep pace with its planned productivity program. At the same time, GLS has fared better, demonstrating real agility and resilience. I'll say more on outlook and the implications for capital allocation in a few minutes. I'll start with the IDS Group financial headlines. Revenues are down 3.9% to GBP 5.8 billion. The Group made it an adjusted operating loss of GBP 57 million in the half at a -1% margin as the losses suffered in Royal Mail hit our performance quite materially. I'll come to the very different outcomes in our two businesses in a second. As a consequence of the poor U.K. performance, we also suffered a trading cash outflow in the period of GBP 235 million on a pre-IFRS 16 basis. That now means the pre-IFRS 16 net debt position, that's excluding operating lease debt, is now GBP 150 million. Still conservative, but against an ongoing backdrop of cash outflows in the U.K. I'll say more on this when I cover capital allocation in a second. Moving to Royal Mail. Revenues of GBP 3.6 billion, that's down 10.5% year-on-year. The decline a function of lower consumer spending, reduced volumes of COVID test kits, and of course, the negative impact of industrial action. Letter volumes also return to the level of structural decline experienced pre-COVID. Operating costs increased by 0.7% in spite of the lower volumes in the network, with the operation failing to respond effectively to the lower workload going through the operation. As a result, the declining revenue pretty much dropped through to the bottom line, resulting in an adjusted operating loss of GBP 219 million for the half. The pre IFRS 16 in-year trading cash flow was GBP 330 million, impacted predominantly by the lower EBITDA, but also reflecting the fact that Royal Mail generally sees weaker working capital cash flow in that first part of the year. A few more facts and figures on revenue and volume. First, I'll cover versus prior year. I'll go on and do some comparatives with pre-COVID in 2019. Versus last year, total parcel volumes down 15% to 613 million items. Parcel revenues down 14.4% to just under GBP 2 billion. Within this, both domestic and international revenues were down 14%. COVID-19 test kits were around 2% of our volume in the half. On letters, addressed letter volumes, excluding elections, down 6% year-on-year as the long-term structural decline dynamic returned. Versus pre-COVID, so 2019, total parcel volumes were flat to 2019 in the half, though revenues were up 14.4%. The total volume position though masks the fact that domestic parcel volumes are up 11% with revenue up 22.6%. Further to that, we estimate that excluding the impacts of the industrial action in the first half, revenue's up around 28% on an underlying basis against 2019. International volumes, as we've said before, are the real negative for our parcels business in the U.K., down 42%. Revenue declines have only been partially mitigated by price and mix changes. They're down 13%. On letters, I think it's worth highlighting the addressed letter volumes, excluding elections, are down 24% over that three-year period. Around 8% per annum over the period, and that's not far off the decline rate that we were seeing as we moved into the pandemic. Revenues are down less at 13% following the pricing actions that we've taken. The year-on-year profit bridge illustrates the year-on-year changes. I've already covered the weak revenue performance. It is worth mentioning that the volume-related cost savings are higher maybe than the normal gearing we might expect from the changes that we've seen. That's because of the mix of revenue where we've seen the declines. For example, there are more directly variable costs in our international business in Parcelforce and in eCourier than there are in our main Royal Mail operation, and that's reflected in the GBP 152 million volume-related saving. To the right-hand side, there's then what I've called inflation and other, which is a bit of a mixed bag, a net of cost pressures and savings. Incremental costs such as the Employer National Insurance increase, inefficiencies in the frontline operation, a write-down in depreciation, and they're only partially offset by the cost savings initiatives that we've had, such as the removal of some of the COVID costs, so things like vehicle hires and the managerial savings from the restructuring program that we did at the start of the year. I've shown to the right-hand side there, the underlying loss excluding the GBP 70 million impact that we estimate came from the industrial disruption in the half. Moving on to GLS, where top-line trading has been strong in the year with revenue in euros up just over 10% to EUR 2.6 billion. That's 6.5% excluding acquisitions. Parcel volumes are actually down 2%, though the revenue growth has been maintained through a combination of significant price increases together with strong freight revenue progression. B2C volume share was 54% in the half, and I think GLS's more balanced portfolio between B2C and B2B has undoubtedly played a role in its more resilient performance. Adjusted operating profit margin for the period was 7.4%. That's 100 basis points down, but resilient still and in line with expectations given the high levels of inflation being experienced across all the markets we are in. In GLS, I should also mention a specific item that we booked in the half. We always include an amount of amortization on acquisitions in spec items for GLS. But in the half, we've also been impacted by an exceptional charge of EUR 39 million in relation to the expected settlement of some historic VAT adjustments in our Italian business. On the profit bridge, really just to pick out here that acquisitions have contributed GBP 16 million to this year's performance to date. So excluding acquisitions, the year-on-year decline in profit is more pronounced than maybe the headline position, uh, suggests. There's some country detail in the notes to this slide, but Martin will say more on that in a few minutes. Cash flow in GLS was robust in the period, improved EBITDA, driving trading cash flow of EUR 111 million. This is down on prior year, but that principally due to timing differences on working capital and higher income tax and lease payments. Moving on to outlook, as seems to have become the norm unfortunately these days, again, we face a high degree of uncertainty in the months to come. Clearly, we've issues specific to each business, but first to cover off the common themes. Clearly, the economy is challenging with question marks, for example, over the level and duration of the inflationary pressures. In the short term, of course, for us, there's also uncertainty as to the extent to which the cost of living crisis will impact on peak season consumer spending. In Royal Mail, we're still guiding to an operating loss of GBP 350 million-GBP 450 million for the year as we move to in October. We're now actually saying that this guidance covers up to 12 days of industrial action. Previously, we'd said this would cover up to eight days. Our actions to date in containing the impact of the strikes have been more successful than we projected in October. This guidance now, we've seen eight days strike to date. This guidance would be robust for a further four days of industrial action. Obviously, in this situation, we're doing everything we can to reduce costs and to tighten cash controls. In this respect, our recovery plan founded on the reduction of 5,000 FTEs by March, targets to generate positive free cash flow next year with a return to adjusted operating profit a year later in 2024-2025. We mentioned in October that there was a risk of balance sheet impairment this half year. This has been avoided based on the recovery plan, and clearly we'll have to review that situation again at year-end according to progress that we're able to make. On GLS, the balance of the year continues to carry further risk to margin. Inflationary pressures remain high. For example, we've just seen the next step up in minimum wage in Germany. We're continuing to take steps to maintain margin where possible, including further pricing actions and cost containment measures. In spite of the pressures faced, we're maintaining our outlook guidance, high single-digit revenue growth in euro terms, with operating profit in the region of EUR 370 million-EUR 410 million. Moving on to capital allocation. Royal Mail had a trading cash outflow in the period of GBP 330 million in the period. Overall, this caused group net debt to increase to GBP 150 million at the end of September. The Board, though, believes this still represents a strong balance sheet position, but against the backdrop of losses in Royal Mail and an ongoing industrial dispute, the current uncertainty requires us to increase focus on cash management, particularly in the Royal Mail business. At the same time, to further preserve balance sheet strength, we've announced that we won't pay an interim dividend this year. We will, though, as Keith highlighted in May, look at the potential to pay a final dividend financed from GLS. For now, the Board's priority is on the short-term recovery plan in Royal Mail. As we've said before, and Keith highlighted, the Board will consider all options to protect value for shareholders. To summarize, a difficult backdrop, but our business is impacted very, very differently. Royal Mail, with its fixed cost base and in the midst of an industrial dispute, has been unable to make progress to date with its change agenda. It must make progress in the next half year, and Simon will take you through those plans shortly. GLS has shown itself to have more operational grip, to be more agile, and as a result, it's been much more resilient to the pressures we've been facing. I'll now hand over to Martin to say more on the progress being made in that business. Thank you, Mick. I would now like to give you more detailed information on our performance and progress, as well as on our strategic outlook. As Mick mentioned, we have shown resilient results despite the economic backdrop that has continued to worsen since I last spoke to you in May. The unwinding of exceptional COVID effects in Q1 of the prior financial year, and the general weakening in consumer demand due to cost of living crisis and war in Ukraine, had a negative impact on the volume development. Overall, parcel volume were down 2% on the previous year. An important factor in the last month has been inflation. Across our European markets, we saw general consumer price inflation increases of around 10% and even higher in some cases. However, this is only part of the story, with major input costs for GLS, such as fuel and energy, rising with more than 40%. Despite the overall volume picture, our cost base increased by around 12% during the period. However, our pricing initiatives have been successfully implemented, helping to drive revenue growth of 10.5% and partly mitigate the cost pressure we currently see across our markets. Our performance is also benefiting from higher freight revenue and the acquisition of Rosenau. Margin was below the prior year at a solid 7.4%. Given what we see in the wider market, I'm very pleased with these results, and once again, this demonstrates that GLS, with a flexible business model and broad customer and geographic exposure, is resilient and well-positioned to deal with the economic challenges that we've all started to experience in recent months. What have we seen in specific markets? The overall picture is actually quite consistent across all our countries. Across the Board, we experienced rising costs, but were able to respond quickly to the changing market developments. In Germany, which is one of our key markets, we delivered a solid performance given the economic backdrop. During September, general inflation reached 10.9%, but at the business level, things are even more challenging with labor shortages and increases to the minimum wage. We also see increasing competition with some players aggressively pursuing volume. However, GLS Germany is a high-quality provider which generates customer loyalty. As a result, we were able to improve our pricing position well and maintain and protect margins. France continues to progress with gradual and meaningful improvements. We have a strong management team in place that is focused on strengthening the quality, improving market recognition, and digitalization. In recent months, we had to carefully monitor the performance of our business in Central and Eastern Europe due to the geopolitical developments and proximity to Ukraine. Despite this, volume and revenue increased year-on-year. While inflation was higher than in other parts of the EU, for example, inflation in Hungary was 20.7% in September, margins in the region have only declined slightly. As you will be aware, the North American market is also impacted by the global economic challenges. Nevertheless, our Canadian operations continue to deliver excellent results. The integration of the Rosenau business acquired last year remains on track. However, the situation in the U.S. still requires improvement. Overall market conditions for all players are challenging, with softening volumes and continued cost and wage increases, as well as driver shortages. Initiatives have been launched to improve performance, including right-sizing of our network, simplifying the organizational structure, improving financial accountability, and accelerating investments in automation to offset the high cost pressure. These measures are being closely monitored, but will take time to fully implement. Before I talk in more detail about what GLS is doing to resolve the current market issues we face, I wanted to highlight why GLS is well-positioned to meet these challenges head-on and remain on a long-term profitable growth path. As I showed in the previous slide, GLS is a diverse portfolio of businesses across Europe and North America, and this is an important and balancing strength during these times of economic difficulties. Another very important key strength is our flexible operating model. We are asset-light, which provides a variable cost base that enables us to quickly scale up and down our operations in response to volume fluctuations. This is supported by a decentralized organization structure where local management teams are empowered to run their business as if they were their own, and therefore respond to opportunities and challenges proactively. Finally, we operate in both the B2B and B2C segment. In combination with our growing B2C business, we have retained our strong position in the B2B segment, where volumes are typically more stable. This allows us to be less impacted by the e-commerce slowdown than pure B2C e-commerce players. We will continue to build on our strength and competitive advantages to address the economic developments. So what are we doing on the short and midterm? In general, the headwinds we faced at the start of the year are building. There's not one single market where we operate that is not experiencing increasing cost inflation. In the Eurozone, the inflation was already 10.7% in October compared to 9.9% in September. I expect that the overall environment will continue to deteriorate for some time. However, GLS is a business that can, and already has, pulled on levers to mitigate these challenges. If we do so in a clear and deliberate way, we will emerge an even stronger business that can continue to exploit the long-term growth opportunities there are in this sector. In addition, cost containment initiatives have been intensified and include reductions in discretionary spending and a critical focus on headcount. We're also targeting our investments to accelerate the automation of processes and to roll out of our digital tools to optimize efficiency. Even though we've already been successful in implementing pricing measures, we will continue to review opportunities to further increase prices to mitigate cost pressure. As Mick said, we reconfirm that we will meet the financial guidance for full year with an adjusted operating profit for the year 2022-2023 of between EUR 370 million-EUR 410 million. However, looking further ahead, the outlook is less clear. In May, I stated that achieving our Accelerate targets remained achievable, provided that there's an economic rebound in the year 2023-2024. Clearly, given the deterioration in global conditions, this is no longer expected. As a result, we now expect achievement of our Accelerate financial targets to be delayed by 18-24 months. Clearly, GLS will not be entirely immune to the current economic slowdown, but the impact on our business will be temporary. We believe that the positive trajectory and the long-term potential for the business remains unchanged. As we look beyond the current market volatility, we still see opportunities to strengthen GLS' position and continue our growth agenda. We want to transform GLS to a digital, sustainable, and truly global player. To unlock this potential, we need to continue to invest for the future. As we also want to protect our financial performance, we will invest in a focused and targeted way. Our network investments will be centered around automation to improve efficiency and growth. A good example for our investment focus is parcel lockers. These provide the potential to improve customer experience and reduce final mile costs. In the last months, we have grown our locker network significantly with further expansion expected in the next months. We are also laying the foundation for further diversification across GLS to create value. This will include expanding our global presence and capturing growth in markets close to GLS' parcel core. GLS will also grow and diversify through digital transformation. We will accelerate our digital change to strengthen our position in the market, capture new revenue streams, and become a tech-enabled parcel provider. An example is our recently acquired tech startup in France, which will enable us to promote product innovation and speed up digitalization efforts. Whilst growing GLS, we're aiming to reduce our emissions to zero by the year 2045. We've continued to make good progress in developing our sustainable delivery model. Our zero and low emission fleet continues to grow steadily. We are on the right path to achieving our ambition, but of course, there's still a way to go. I'd like to summarize that GLS has delivered resilient results in the first half year, underpinned by our flexible, balanced, and diversified model. We confirm our full-year guidance with tighter economic conditions expected going forward, and we remain focused on our long-term growth ambition to become more global, digital, and diversified. Thank you very much. Now over to Simon. Good morning. We've started turning Royal Mail around, and we'll do whatever it takes. The changes we need are not optional. The losses that we have suffered to date, made worse by industrial action, are not sustainable. We have a five-point plan that will make us profitable again, and I'll take you through that today. I will also talk about how we've worked hard to minimize disruption to our customers and protect our revenue during industrial action. Looking back on this year, a lot of our key infrastructure is now coming to fruition, such as the launch of our North West Super Hub in the summer. Last week, we were hitting 70% parcels automation in our existing network. I'm feeling confident that we will be hitting that consistently by the end of the year. We now need to make the most of that infrastructure and change our ways of working to compete and win in the parcels market, a key plank of our talks with CWU, which I will come on to later. I've met thousands of our managers in the last two weeks at events at Midlands Super Hub, and I'm grateful they are on board with our transformation plan. It is our preference, it is my preference that the CWU are also alongside us. If not, the change we need will still need to be implemented. We have a five-point plan to get us back to profitability again, and we've already started to execute the following. One; we are in the process of rightsizing our business to match workload. Two; we will continue to fund our transformation by creating the financial headroom to invest. Three; we are changing our resourcing models to make our business more competitive. Four; we are making changes to our networks and how we use our assets. And five; we continue to build our management capability and effectiveness. Turning now to the actions we've already started taking to turn Royal Mail around and returning us to profitability again. Point number one, we are in the process of rightsizing our business to match workload. We have a cost issue, and that's largely as a result of our inflated labor cost, which has been the case for some time. That inflated cost base is made worse by the downturn in volume. We could not react quickly enough to the downturn and match our resources to volumes, but we have taken action. In October, we announced that we will reduce our operational headcount, 5,000 FTEs by March 2023, and 10,000 by the end of August 2023. Wherever possible, we will achieve this plan through reductions in overtime, temporary workers, and natural attrition. However, this will not be enough. Based on current estimates, 5,000-6,000 redundancies may be required. Wherever possible, any redundancy will be achieved on a voluntary basis. The preferencing process for this activity has now begun. This process will be managed on a unit-by-unit basis across all 1,200 delivery offices and our processing sites, with route revisions activity aligning resources to workload. We will implement dedicated parcel-only routes at the same time to ensure we're delivering larger and next-day parcels in the most efficient manner. This means we can get late-night e-commerce orders to our customers the next day. Point two, we will continue to fund our transformation by creating the financial headroom to invest. We have a strong balance sheet, so we can afford to keep investing in our transformation, which will allow us to compete and win in the parcels market. We are focused on strong cash management, and we've reduced our CapEx this year by GBP 100 million, from GBP 350 million-GBP 250 million. Point three, we're changing our resourcing models to make our business more competitive. We need to be more flexible and match workload and labor more effectively during the peaks and troughs of demand. In October, we removed the cap on Parcelforce Worldwide owner drivers, giving the company the ability to increase the mix of self-employed drivers. Owner drivers are more efficient, and they're open to working more flexible duty patterns. This is the model operated by most of our competitors. This month, we introduced new starter terms and conditions, which has started to give us the operational flexibility we need for our customers while still providing the best terms and conditions in town. Our new starter terms and conditions are based on working five days out of seven, which means we can now cover our growing Sunday business with the core team. Our retail customers pay the same price for a parcel delivered on a Sunday or as any other day of the week. Our costs need to reflect this. Our absence rate is still too high. This reduces our productivity, and it means that those that do come to work have more to do. To address this, we have developed a new attendance policy which will go live in quarter one next year. It's focused on those that have regular absence and will not impact those that have occasional absence. Point four, we're making changes to our networks and how we use our assets. Last year, we developed scan-in scan-out technology in our processing sites, and we've now just completed the deployment of scan-in and scan-out technology across our delivery network. The handwritten attendance sheets have now gone. We are rolling out dedicated parcel routes across our delivery network. Around 60 hubs have already been deployed, with the remaining 290 to be completed by year-end. This means we can get late-night e-commerce orders to our customers the next day. We are also now exploring the utilization of a number of Parcelforce Worldwide locations as parcel hubs for both Royal Mail and Parcelforce Worldwide parcels. Our North Super Hub opened in June 2022 on time. We are now moving larger parcel volume from our mail centers to this new Super Hub. Midlands Super Hub is on track to open in summer 2023, and as it comes on stream again, we will move parcel traffic from our mail centers to the Super Hub. Our Super Hubs are better for quality, cost, and allow us to accept parcels from our e-retailers late in the day. Because this is what the consumer wants, late night orders delivered the next day. Point five, we continue to build our management capability and effectiveness. Our managers are on board with our change agenda. In the next few days, most of our 7,500 managers will have attended our Beyond event at the Royal Mail Academy, which is located at our Midlands Super Hub. A half-day event that has allowed them to see where we are going, and importantly, understand the role they play in reinventing Royal Mail for the next generations. I must say, the feedback has been very positive and it's been great to meet everyone. We are also pleased to confirm that after three weeks of productive discussions and a ballot, the pay offer we negotiated with Unite CMA has been accepted by their members. We agreed a pay offer worth 5.5% plus GBP 1,000 one-off cash payment for our managers, which is to be backdated to September 1st, 2022. Our managers have been through enormous change. Delivering for the Future was our biggest change to the delivery operational structure in over 30 years. We've reduced leadership layers from 8-5 and reduced team sizes. Decision-making is now moving closer to the customer, ensuring we deliver the service the customer wants. We are already seeing operational benefits. Even against a background of industrial action, our frontline trust scores have gone up. Our frontline managers teams are saying they are more involved in change that impacts them. Our managers are keeping their promises, and teamwork continues to improve. Our managers are ready to lead the reinvention of Royal Mail. Our five-point plan is only a start. We will give you a more detailed explanation of our additional plans at the full-year results next year, but for now, please let me provide a quick overview. Reviewing our mail center footprint. As the Super Hubs come on stream, and based on early estimates of parcel volumes, we expect that the number of mail centers we will require in the future will likely reduce. More efficient utilization of the Royal Mail and Parcelforce 's worldwide networks. Too often, Parcelforce and Royal Mail go over the same ground every day. It's time to have a detailed look at this reality and ask ourselves, "Is this good for our customers? Does this make financial sense?" Review of our customer service points. Customers want first-time delivery. To enable this, we've introduced a range of new delivery options, including free redelivery, the option to leave a parcel in a safe place, and in-flight redirection to a different day through the app. With customer footfall down around 50% at our 1,200 customer service points compared to pre-pandemic levels, and as our first-time delivery percentage continues to increase, it's time to conduct a review to determine the role of customer service points. New and faster trials. A new trials framework has been developed to speed up the introduction of new technology and ways of working, and as an example, we are commencing a small-scale trial on new indoor delivery office sorting methods to reduce the amount of time spent resorting mail. We will soon be assessing what changes have the greatest impact on quality and productivity. Fleet financing and maintenance. We have introduced alternative lease and maintenance options for our fleet in the current year to provide a capital-light and lower cost of ownership option for the rollout of new electric vehicles. There are also elements of structural change that are not wholly in our control, but are just as important, such as the Universal Service. I want to be very clear, we are committed to the one price goes anywhere Universal Service, but you just can't get away from the fact that letter volumes have declined by more than 60% since their peak. Our own regulators res-research shows that a five-day, Monday to Friday, letter service would meet the needs of 97% of customers. To ensure the sustainability of the Universal Service, we need urgent reform. So we have approached government to seek an early move to five-day letter deliveries. Coming back to today, I want to talk about our experience during industrial action, as I know it's front of mind for many people. Due to our significant investments made in maintaining service, months of contingency planning, and the tireless communication between our commercial team and our customers. The negative impact of strike action has been contained. I would also like to take this opportunity to thank our non-operational managers who left their day jobs behind to help us deliver our customers' parcels. Thank you. As the chart shows, our recovery from industrial action has been strong, and we've improved as we learned with each strike day. When our service is back up and running, our retailer customers are happy to use us again. I would also like to take this opportunity to thank them for their support. Thank you. We've also made sure that any priority items, such as test kits and NHS letters, are delivered as soon as possible, and we understand how important these items are for our customers. Now I'd like to cover off our industrial relations. Earlier in the year, we tabled what we believed was a fair pay offer to the CWU. It was worth up to 5.5% for CWU grade colleagues. It reflected the inflationary pressures in the market, the changes we need to win in the market, and a GBP 1 million a day loss. We have always said, "The more change, the more pay." Over a six-month period, we attempted to talk about the change we need. As you know, no agreement was reached, and CWU balloted its members twice on pay and change. On October 25th, and after a month of waiting, we were pleased to enter into talks with the CWU at ACAS. Those talks are ongoing. Please bear this in mind in Q&A because we do not negotiate in public. We have now made an improved offer worth 9% over two years, comprising a 7% salary increase, 5.5% this financial year, made up of 2% that's already paid, and a further 3.5% salary increase from the date the deal is agreed. 1.5% for next financial year, effective from April 2023, plus a lump sum payment of 2% of this year's pay, paid upon the successful implementation of a local revision or other local change. The offer is conditional on reaching agreement on key change items, including implementation of seasonal hours, flexible resourcing model and delivery, later start times in delivery, reforming attendance and sick pay policies, a taper in the benefits for ill health retirement, and the buyout of legacy allowances. We must modernize our ways of working so we can compete and win in the parcels market whilst also delivering letters to a quality standard our customers expect. On September 22nd, we served notice on a number of historic agreements. Now that the notice period has elapsed, we are implementing changes that previously we were unable to do. We now have new starter terms and conditions, which gives us the operational flexibility we need for our customers, while still providing the best terms and conditions in town. We have also removed the cap on owner-drivers in Parcelforce Worldwide. We will also move to a more modern industrial relations framework with the CWU, which will allow Royal Mail to be more agile and move at the pace of the hyper-competitive parcels market. To conclude, we have started turning Royal Mail around, and we will do whatever it takes. The changes we need are not optional. They are also very urgent. The losses that we have suffered to date, made worse by industrial action, are not sustainable. We need to adjust to economic headwinds and give our customers what they want. That way we will compete and win in the market and provide our team the long-term job security that they deserve. We want to bring our people along with us. We've made an improved offer, the most we can afford. Further industrial action that damages our business will mean our offer will no longer be affordable. We are implementing immediate steps to stabilize our business and rightsize the cost base to reflect the new realities of a likely protracted economic downturn. These immediate actions will start making a difference in the short term, including 5,000 FTE reduction by March 2023. A sad reality, but very necessary to match our costs and workload. There's the structural changes to improve and better leverage our network, including in delivery. We believe these measures will get Royal Mail to cash flow positive in the next financial year, 2023-2024, and a return to operating profit in financial year 2024-2025. Royal Mail is a great business. We can win, I'm certain of that, and I've always been certain of that, but only if we change. We have already started to change, and we will do whatever it takes to turn Royal Mail around. Thank you. Great. Thank you, Simon. We'll now move into the Q&A. I think Maria is our operator for today. Maria, I'll hand over to you, and we'll start the Q&A on the line if we could, please. Thank you. The Q&A session is now open to telephone participants. There are currently no questions on the line. Please push star followed by one on your handset to ask a question. If you change your mind and wish to remove your question, please press star followed by two. When preparing to ask your question, please ensure that your phone is unmuted locally. To confirm that's star followed by one to ask a question. The first question is from the line of Alex Irving with Bernstein. Please go ahead. Hi. Welcome. First, could you please confirm the level of cash resources in each of Royal Mail and GLS at the end of the half year and the minimum level of liquidity you would see is required because those businesses are not looking to do this. Second, at the beginning of COVID, you highlighted there were net debt to EBITDA and EBITDA interest cover covenants on your debt. Are these still in place, please? If so, do you perceive any risk arising from these? Third, if Royal Mail itself becomes in need of additional liquidity beyond sort of organic cash flows, could you please confirm whether borrowing would be or whether this would be realized from borrowing or asset sales at the operating company level and not at the Group level? Thank you. Thanks, Alex. I think your questions were breaking up a little bit, but I think they were all related to liquidity and cash resources and net debt. I'll ask Mick to talk you through the response. Hi, Alex. Yeah. Look, we don't actually give details of the cash positions in Royal Mail and GLS, and maybe I'll think about that as we move forward into May. They do both maintain their own balance sheets and manage their own reserves appropriately. We actually raise finance currently at the Group level. Facilities like the RCF, the bonds are raised at the Group level rather than in the Royal Mail business or in GLS. In terms of the minimum liquidity that require, I think that, you know, clearly we have seasonal and in months working capital swings. If I go back some years, which is last time, I think maybe in Royal Mail 10 years ago when we were suffering, we used to think about GBP 200 million of liquidity in Royal Mail being kind of a low point where we would want to be taking actions and watching the day-by-day, week-by-week working capital movements. That's probably not a bad guide for today as well. In terms of the covenants, yeah, we still have the covenants in place around the RCF. What I would say is that the recovery plan and the outlook guidance that we have outlined today is, you know, not in breach of covenants, but, you know, we're comfortable that the RCF facility would be in play, but nor indeed do we need to utilize that RCF given the guidance that we've put out today. In terms of additional liquidity needs, I think what I would say is, in the Royal Mail business in particular, there are many levers that the Royal Mail business can pull. I mean, Simon outlined that we've reduced our outlook for capital expenditure in the year from GBP 350 million-GBP 250 million. That is still maintaining the transformation investment that we need. We're still continuing with the investment in the new Super Hub in the Midlands, for example, within that reduced investment envelope. There is further we can go on cost containment in Royal Mail to help the liquidity position if we want to do that. Of course, you know, we want to get on with modernization and transformation at the same time. We are balancing how we're responding at the moment on cash, getting a really firm grip on the tiller, and making sure that we stay within our ratios and with our constraints. Of course, if things change, we'll have to take appropriate action in that respect. At the moment as well, I think it's important to say that GLS has been, you know, left untouched and unscathed by what's going on to get on with its investment plans and its investment in growth. That's really, really important to the Board that there's no cross-contamination of the issues that we're facing in Royal Mail to prevent us being seen as a good and responsible owner for GLS, allowing it to reach its potential. That also is inherent in the guidance and position that we're outlining today. You mentioned additional liquidity in Royal Mail as well. Look, of course, it has a strong balance sheet, Royal Mail. It's got a large asset base and options available to raise money, further money if required. You know, we'll continue to monitor where we're at. At the moment, that's not a feature of the outlook for this year. Thank you very much. The next question is from the line of Sam Bland with JP Morgan. Please go ahead. Yeah, Sam. Do you want to move on to the next one and we'll take Sam if he gets back on? Can we try the next line? Hello? Mr. Bland, can you hear us? Yeah, I can hear you. Thank you. Can you hear me? Yes, we can hear you. Go ahead. Okay. All right. I'll just repeat. I think the first three days had a GBP 70 million impact. Now we have eight days at GBP 100 million. It looks like the extra five days are a GBP 30 million impact, so GBP 6 million a day versus the initial three being about GBP 23 million a day. I'm not sure that the math is right there. The second question is on GLS guidance. Just a little bit. Slower profit growth year-on-year, or are you thinking that there could be a year-on-year decline in profitability at some point and then growing from that lower base? Thank you. Thanks, Sam. Mick will talk to strikes and number of days and impact in a second. If we just turn to Martin first, I think your question was relating to this year's profit and where he is on Accelerate, I think is what I picked up. Yeah. Hi, Sam. As you've seen from our confirmation of the guidance, the first half of the year was impacted by a lower volume, but we were able to compensate with quite good pricing measures. Moving into the second half of the year, we do confirm our full year guidance, but given the current macroeconomic environment and the likelihood of economic either recession or at least stagnation, we expect that the volumes will be impacted a bit stronger. I think the second half in terms of our margin will be a bit lower than the first half. That then obviously will lead us into the year after. Since it's such a volatile environment currently, I think it is rather impossible to give a further outlook beyond this fiscal year. I think what is a common sense is that the full next calendar year will somewhat be impacted by the economic situation and the inflation that we're seeing around the countries. Beyond that, I'm rather careful of giving any further outlook because I think it's just not possible. Okay. On strikes, Mick? Hi, Sam. Yeah, look, as I know everyone would love to be able to convert the impact of strikes into its, you know, X million per day. We do kind of try and talk about it a little bit like that sometimes. It's actually a bit more complicated, you know. Customer behavior and reaction to the threat of strike can cause a change in behavior and potential loss of revenue. As the industrial dispute built in H1, even ahead of strikes, some customers would have diverted traffic away from us and maybe to other providers. That GBP 70 million impact in the first half wasn't just on the day strike impacts, it was kind of in the period up to the end of September. It's also important to note that it's a combination of revenue that maybe moves away from Royal Mail, but also we invest really quite heavily in contingency planning, in additional drivers, in agency labor to allow us to provide service both on, you know, the buildup to strike, but also in recovery after industrial action. That's, you know, offset against the pay abatements on the day when we don't pay posties on the day if they take industrial action. There's a number of moving parts that contribute to the GBP 70 in the first half. I think the GBP 30 for the five days of industrial action in October was from our perspective a real positive. I think, you know, we had anticipated when we gave the guidance in October that the strikes would have impacted us more severely. I think, you know, it's in some ways a testament to the investments that we have made to try and protect customer service and the efforts of our account teams in closely managing expectations and promises to customers that to date have allowed us to contain the impact of the industrial action to a lesser amount than we might have originally feared. When we gave the outlook guidance today, I'm sure you've noted, Sam, we're now saying that the guidance covers us for 12 days of industrial action. The eight that have already been taken and potentially a further four that we've already been notified of. Of course, we will see what happens in the talks with CWU over the next week or so ahead of those days of industrial action. There's a number of offsetting parts. You know, it's been a positive response from customers and the business actually, to the industrial action taken during October. Sam, yeah, Mick's answered that fully. Just to make one clear point that he said is that, yep, we've had eight days of strikes. We've been notified of four more, November 24th and 25th and November 30th and December 1st. That came in yesterday. Clearly that just doesn't take anything away from the actions that need to be taken in the business. You know, Simon's still gonna continue with the actions that are needed to turn around Royal Mail around. Great. Thanks. I think we can go to the next question now, please. Mr. Bland, are you done with your question? Thanks, Sam. The next question is from the line of Muneeba Kayani with Bank of America. Please go ahead. Good morning, thanks for taking my questions. On GLS cash and capital allocation, you talked about the growth opportunities at GLS. Can you help us understand how you're thinking about capital allocation and why you would use that cash for dividends? Is my first question. Secondly, if I could go back, Simon, to the slide on the new CWU offer and the 3.5% funded by change. This is firstly related to change. Is that still related to change? Can you help clarify that? Just following up on the earlier question on strike impact. What is your guidance assume for the planned four days of strikes? Thank you. I'll start by giving you something on the dividend and then turn it to Martin for the growth. I and Simon can cover the offer, but it is linked to change. I don't know if you want to say anything on that, Simon. It is linked to change, the 2%. Yeah. Well, actually, Keith, maybe I'll cover it off now. Okay. Sorry, derailed it a little bit. Yeah. Yes, the 3.5% is linked to change. The payment will be effective from the point that the change has been agreed. Keith, hopefully that covers that off. Now your question on GLS was capital allocation. You know, what Mick made clear is that GLS is not constrained. GLS is investing in two areas, and Martin can cover it. One is digital improvement and acceleration, and the other is geographical footprint. Neither of those is constrained by the Group at the moment. In terms of the dividend, if you actually analyze it, except for the COVID period, the dividend that is being paid by Group is being increasingly over the years funded by GLS and not by Royal Mail. Indeed, you know, if you look at one of the reasons we've looked at the change in the name of the holding company and the two brands underneath, in part, it was driven around that transparency. I think a number of commentators hadn't quite understood that actually the dividend was increasingly coming from GLS's cash inflows over time anyway. Clearly, as you can see this year, Royal Mail is gonna have a negative cash flow, a significant negative cash outflow, but GLS will be positive, which is why, as a Board, we're saying we'll look at the dividend at the year-end. Martin, do you wanna cover anything on growth, and then Mick? Yeah, certainly. Look, GLS is a winning business model, and it shows especially in these days. We will continue to invest. We have never stopped investing and we are very strongly supported by our mother company. No restrictions there. We indeed foresee in order to achieve also our Accelerate targets to invest heavily in digitalization, which we're doing, one, through own developments, very customer-oriented applications, but also through investments in digital companies. The other thing is, as Keith mentioned, our business model works in almost any geography. We are seeking to expand further our footprint. On top of that, also to have a more balanced portfolio, it is likely that we will continue looking to invest into areas that are adjacent to our core parcel business model. I think that mixture is where we are focusing our investments on. Of course, next to investing in our, let's say, core business to increase the footprint with new hubs and new automation, new sortation. That mixture is what makes GLS stand out. I think, going forward, we have lots of ideas, and I can't see us being constrained in our investment opportunities, and we will move ahead. Mick, do you want to comment on strikes? Well, look, I mean, clearly the four days of industrial action that we're now notified of at the end of this month in early December are clearly, you know, certainly the second two days falling into Black Friday, Cyber Monday weekend. You know, we're really starting to play with fire at that time of year in terms of the potential impact on revenue and our customers. You know, it's absolutely critical really that the union sees sense and seeks to avert impacting our customers like that, because, you know, if they're afraid of a race to the bottom, then that really is the startings of that sort of trajectory. We need to serve our customers at this time of year. The company's, you know, in a level of distress financially. We've announced a loss of GBP 219 million, further losses expected for the second half-year. I think it's really important now that That we start to get on with the change program, working together against, you know, a backdrop of a difficult economy that's hard for our customers and our people. I think, you know, from my perspective, we need to move forward. We need to get through the talks, and we need to service our customers through their busiest and our busiest trading period. Okay. Thanks, Mick. Next question. Muneeba, are you done with your questions? Thank you. Thanks, Muneeba. The next question is from the line of Sathish Sivakumar with Citi. Please go ahead. Yeah, thanks for the presentation. I've got three questions here. Firstly, on the attrition rate at the Royal Mail U.K., right? Just can you share some color on it actually? As we're going through this industrial action and so on, what has been the impact on the attrition rate and also on the long-term sick leave? Obviously, we have seen the peak of it last year, but I just wanted to get a sense where we are right now. The second one is around the Parcelforce. Looks like you made a progress on restructuring the through-sourcing model. Would you actually consider reorganizing some of the operational activities that are carried out through Royal Mail into Parcelforce? Is there any overlap actually that you could just move some of those activities on in newly restructured or at least some? You're making some progress there, right? The third one into the peak season. Historically, you hired about 20,000 FTE. What is your thoughts about 20,000 agencies or temp workers? What is your thought into this year? Related to that, obviously, with the industrial actions coming in, especially during the peak period, what has been your discussion with your key customers? Okay. Thanks, Sathish. Let me just say something on attrition and then I'll pass it over to Mick or Simon. I'm progressing in Parcelforce. You're right. Simon can cover that again in a second. In terms of attrition, you need to think about it is that we are 1,200 delivery offices. Yeah. There is some recruitment going on because you don't get a direct match of people leaving the business to people joining the business. Overall, we are seeing attrition. I think it's running about 250 people a week. About 250 a week, Keith. About 250 a week. Yeah. You are seeing some recruitment at the same time. What you can link that to, the current need for workers during peak. Obviously, we're in the middle of peak or getting into the middle of peak. What is different this year to previous years is we're coming into peak with a much higher base headcount to begin with. Yeah. You know, whereas last year in COVID, I think we recruited something like 25,000 people for peak. You know, that's just not happening this year because of what's happening in the business generally. Mick, do you wanna say anything on long-term? I don't think we've put a number out actually, but, you know, it's running a couple of percentage points above what would be a kind of pre-pandemic norm still. You know, there's still advances to be made in absence management. I think, you know, Simon outlined as part of what we plan to move forward with in the future is a change to our attendance policy, which will look to tighten up people who are more frequently absent maybe than the norm. Yeah. I think each 1% of sickness is about what? GBP 40 million. It's about GBP 25 million. About GBP 25 million of cost, yeah. Parcelforce? What was the specific question, Keith? I didn't quite catch it. I think it was a question on the integration of Parcelforce Royal Mail. Yeah. As I mentioned, is that we currently go over the ground twice in many cases. You know, Royal Mail vehicles and a Parcelforce vehicle will go over to exactly the same place. The question we've got is, why is it, you know, is that good for customers? Is it good for cost? We don't think that it's good for either of those things. As we roll out our dedicated parcel depots, the round about 350, we've done 60 already. The question that we're asking ourselves is, can the Parcelforce depots we have around about 50 or 60 of them actually become those dedicated parcel hubs for both Royal Mail and Parcelforce parcels? That's the deep study that we're in at this particular point in time. We'll be able to update in due course. The other thing that we've done as well is we have opened up the owner-driver cap as well, which is also now done. As I said in my presentation, that owner-drivers are good for productivity, but they are also more open to working different duty patterns that also reflects the changes that our retail customers want. Great. Yeah. Last thing, just going back to peak is, look, we have the people already there for peak. As you saw in the presentation, what you're seeing in the first quarter of next year, this between January and March, fourth quarter of our year, is a reduction of 5,000 FTE or thereabout against last year's number. It's a like-for-like number, and that is reflecting really the volumes changes in the business. That 5,000 FTE is like coming off from your voluntary attrition, or is it going to be on top of the attrition? It's a mix, yeah. Some of it's voluntary, some of it's attrition, and obviously attrition is cheaper than voluntary redundancy. Yeah. What Simon, I think, gave you on the 10,000. 800 that were gonna come out over the 12 months to August, I think he gave you the number that we expected by way of voluntary redundancy. Yeah. It's 5,000-6,000. 10,000 FTEs between now and August 2023, of which we estimate that 5,000-6,000 may be required through redundancy. Yeah. Thank you. Great. Think we can go to the next question, please. The next question is from the line of Alexia Dogani with Barclays. Please go ahead. Yeah, good morning. I had three questions as well. Maybe on Royal Mail. Just firstly, clearly, Simon, last year you were painting a much more constructive picture with the unions, and we are now in one of the most extreme disputes we have seen in recent years with mounting losses. You know, you could easily say the plan A is not working. I guess, what is plan B? How can you be confident of stemming these losses given the backdrop? That's one. Secondly, I think you've put in a statement that you expect Royal Mail to return to operating profit in FY 2025, not next financial year. How should we think about the evolution of losses into next year, and what does your plan assume currently? Is it a halving of the losses? Is it getting close to break even? Any color on that would be very helpful given the situation at the moment. Finally, just a clarification, maybe Mick can help on. In the statement, you say that in October, you were loss-making, excluding the strike action of around GBP 80 million. That's clearly an improvement from the GBP 1 million loss per day to roughly GBP 500,000. Well, how much is that due to underlying and compared to just seasonality? Because clearly calendar Q4 is a higher revenue quarter. Thanks. Simon, do you want to go? Yes, I'll take the union question. What I would say, and I covered it in the presentation today, is that we had our largest change that we had in our operational delivery management population that we've had for 30 years. You know, we've worked with Unite CMA in a very constructive way, where we've actually made that change, we've embedded that change. We've had both the cost benefits and also the operational benefits as well, and we've also agreed just the other week, you know, a pay deal as well that went to a ballot and had a positive outcome. And I think, you know, when I look at that, our managers are ready to lead the reinvention of Royal Mail, and I think that's really, really positive and I think it's a great example to all on how it is that you can work together to get the change we need so the business can be successful. On the CWU, the reality was is we tried for six months, and we weren't successful in getting meaningful engagement on the change. But I am pleased, and I've said it very, very clearly today, and I've said it many, many times, is that our preference and our preference is that we can have the CWU alongside us during this change. And you know, and the talks are currently ongoing. It took a while for us to start those talks with ACAS, but they have been going on intensively. They went on over last weekend. I wouldn't like to prejudice that situation by any form of further update today, but let's see what comes in the coming days. The key point is the change we need is the change we need. What is required to turn Royal Mail around, we will do that. Keith? Okay. Alexia and Mick will talk to current operating and next year. Yeah. Hi, Alexia. Yeah, look, in terms of next year, look, according to the recovery plan and the 5,000 FTEs and 10,000 by August of next year, and given the outlook guidance that we've given, next year is on a trajectory back towards break-even. We've said that next year we'll look to target positive free cash flow. Inherent within that obviously is a degree of uncertainty around the economy, which is why I've chosen free cash flow rather than trading cash flow as the reference point. Because I think we would look to seek to make the U.K. business at least cash generative next year. If required to be supplemented by an asset sale or two on the property side, for example, that's how we would look to accommodate achieving that target given the uncertain backdrop. In terms of October trading, you're trying to get really precise in one month of data. Look, for starters, our impact of industrial action is an estimate in its own right, you know. Maybe it's give or take 10%-15% in its own right. Taking a read across to the losses having been contained to under GBP 1 million a day, yeah, that is a function of the arithmetic. I think splitting hairs. I think October is normally a stronger trading period than maybe the periods across the summer. You know, I think we've got a lot to do to stem the tide of those losses in the balance of the year rather than to look at one month. Thank you. If I can follow up. In terms of the losses next year, I appreciate the comment of, you know, towards breakeven, and I appreciate the free cash flow comment as well. I guess, is next year therefore the last kind of resort year that will make you say, "Okay, we need to change tack because we've now had two years of significant losses"? Are you giving yourself, I don't know, 6-12 months more? That's kind of what I'm asking. Well, I think the immediate thing is to look to next May when we talk again, because, you know, the focus at the minute is on the next six months and making progress in the next six months. When we get to the full year results, we'll obviously update you on what we see for the following year. Yeah. It's too early to say. Mick will start to fill in those gaps as we see what's happening in the next six months. I mean, the trajectory, the cost trajectory out of this year is absolutely critical. You know, the economy to some degree where, you know, we can't control. Obviously, you know, if there is a more protracted impact from industrial action, again, you know, we'll have to accommodate that as well, but in any outlook guidance. I think from my perspective, this turnaround has got to be seen as within our control to be delivered through cost containment and improved efficiency. All right. Understood. Thank you very much. Thanks. Thanks, Alexia. I think we can go to the next question then, please. The next question is from the line of Cristian Nedelcu with UBS. Please go ahead. Hi. Thank you very much for taking my questions. Maybe the first one in the U.K., you talked about the action plan, the new terms for the new hires, the change in absence and so on. Would you offer us a first view at the ballpark cost savings that you anticipate here? Could you tell us if within the guidance of an operating loss for next year, you already include the benefits coming from all these measures that you started implementing? The second one on GLS. We have your revenue guidance for the full year, which is very helpful. Can you comment a bit for the second half on your expectations on volumes versus expectations on pricing? Just to get a bit of a better feel on your thoughts there. The last one, maybe specifically on GLS Germany. I mean, we had this minimum wage increase of almost 25%, and I believe your labor force is somewhere around 60%-70% of your cost. Could you elaborate a little bit what you're doing there in terms of pricing and if you believe you can fully offset this minimum wage increase through pricing or other cost measures? Thank you. Yeah, hi, Cristian. We're not providing detailed guidance as to the specific benefits of each of the initiatives that we outlined at the moment. We'll look maybe as to what detail we'll add as we move forward into next year. The benefits of the initiatives that have been outlined, some of which impact next year, some of which may be or into the following year, are absolutely included in the guidance that we've offered. In terms of GLS volumes, we're not guiding to volume. I think Martin's always been clear, the economy's uncertain. We'll continue to respond and react as inflation and the economy and demand moves over the course of the period. I think to date, we've been successful in responding with pricing and efficiency initiatives to maintain margin. That strategy that's been, you know, pretty successful in the first half will continue into half two. I don't know if there's anything to add, Martin, on that. No, I think that is spot on, Mick. Indeed, we will see that volumes will not be stronger than in the first half. That is clear. We will be impacted. As I mentioned earlier, we have a pretty resilient business model. Especially in Germany, we have also a good mix between B2B and B2C volumes. They react differently to the economic situation and in terms of also volume decline are different. That puts us in a good position in terms of to balance the effects. On the other hand, we have seen quite a healthy price increase already in Germany. We intend to, and we have to continue with, reviewing our pricing position as well in Germany to mitigate those costs. So far, we have been quite successful because in Germany we are absolutely seen as a high-quality provider and that helps us of course to be successful in getting our cost increases under control and to mitigate them as much as we can. Understood. Thank you very much. Thanks, Cristian. We can go to the next question then, please. The next question is from the line of Gerald Khoo with Liberum. Please go ahead. Morning, everyone. Two questions, if I can, both on the U.K. In Royal Mail, just looking at the slide you put up showing volumes and revenues, it seems like it's a relatively narrow gap between the two. Could you sort of talk a bit about sort of what's happening on price mix? Why you don't seem to be getting the same uplift as GLS is achieving? Secondly, on the USO and the proposed switch to five days, can you sort of elaborate on what sort of savings you would expect from that? What are the sources of those savings, and what's the timeline in terms of government agreement and any legislation, please? I'll cover the last aspect and then turn to Mick maybe to answer the revenue and volume. We're not giving the financial impact of the USO because, you know, it's dependent on what actually comes out, and it's not built into our models, yeah, at the moment anyway. If I talk you through progress on the USO quickly, this isn't a new issue. We actually raised it first off in 2019 before the pandemic. Clearly the pandemic sort of changed things temporarily. The USO is built around two things. It's built around meeting consumer demands, and it's built around the financial stability of the provider, Royal Mail. On the first, as Simon put in his commentary, is that, you know, 97% of users accept that a change in the USO to a five-day proposition would not adversely impact customers. We have ideas in train on how we would satisfy customers on the sixth day, Saturday, and on the seventh day as well. I think the consumer demand test is sort of satisfied through what Ofcom has been saying. The financial stability question is the one that I think is increasingly being recognized by both Ofcom and by government. What, as we said this morning, if you look at that, is over the last 10 years, is we've only met the regulatory hurdle of a 5%-10% EBIT in 2 of those 10 years. You can see the amount of change that we are putting through this business, but we are fighting against a decline of 60% in letters, yeah. You know, it is in the interests of all stakeholders, government, Royal Mail, unions, everyone, to get the right USO for the future, and that's the approach to government and the talks we're having with government. I don't think you are gonna talk about the financial changes, Mick. No, not on USO. Volumes and revenues? Yeah. We always get into the debate on the price mix change on the volumes and revenues, and that's because we don't provide the detail behind what is, you know, quite a wide portfolio of services that we offer both within the parcels and letters and international space. Maybe just a few comments, I think. On the letters side, we obviously have put in quite significant price rises on business mail. We're really reasonably pleased with how that's gone. We will be putting in more price rises this month on business mail, an 18% price rise, in fact, going in this month, which is a couple of months earlier than we would normally do, which is, I guess, energized, if you like, to be accelerated because of how pleased we've been from how the earlier price rise landed and stuck. I think there's obviously a dilution though on total revenue. I think we've said on the year-on-year volume slide, you know, advertising letter revenues were broadly flat. They're a relatively low AUR service, and one in which we try to contain price rises because advertising letters are in competition with other advertising media. We have lower price rises in a letter service that has performed better than maybe the norm. There's a kind of balancing offset in terms of how the price mix comes through when you look at the total. Similarly, on parcels, you know, we've had lower volumes of test kits this year. They were higher AUR at last year. That's introduced a dilution year-on-year. Also some of those were kind of premium services. eCourier, our courier service, did quite a lot of business on test kits. Again, you know, higher AUR volumes that have dropped out year-on-year. Underlying that, actually the price increases that we've introduced on things like fuel surcharges on parcels and so on, they have been reasonably successful in sticking and managing the year-on-year flow of revenue. I do understand that we don't get all of those dynamics from the chart that we put out, but you know, that we're not intending to change that anytime soon, I'm afraid. Okay. Again, can I just push you on the USO change you requested? What's the timeline on that? Well, Gerald, if you look at it, any change needs secondary legislation. Yeah. It's by statutory instrument, and clearly that is in the hands of government to put forward in the legislative, you know, in normal legislative timetables, yeah. I can't determine what that would be. Obviously the, you know, the sooner we get that, the sooner we'll get the financial stability that we need and is required under the Postal Services Act. I mean, once the changes are made, what's the sort of lag between you implementing the changes? Oh, there's no lag. We've actually in the past implemented this change under emergency legislation, yeah. During COVID, there was a temporary period where actually the five-day service was implemented. It's not an implementation problem from our side. It's really a regulatory change. Yeah. Okay, thank you very much. You probably get 80% of the benefit the following week and the rest to be managed in. Yeah. It's a regulatory change, not a Royal Mail implementation change. Okay, thanks. That's really helpful. Thanks, Gerald. I think we can go to the next question then, please. The next question is from the line of Andy Chu with Deutsche Bank. Please go ahead. Thank you. Good morning. Three questions if I may, please, two on Royal Mail. Could you just let us know what sort of projects you're cutting with your reduction of GBP 100 million of CapEx? Looking forward, what should we be penciling in for next year and the year after, please, for CapEx? Secondly, I think there was an announcement yesterday from the Post Office picking Evri as their sort of first door-to-door deliverer. Can you just remind us what sort of volume are you thinking in terms of volume losses under your new sort of 10-year deal? Just a simple one on GLS. What was the organic decline in operating profit in the first half year-over-year, please? Thank you. Do you wanna take, Mick, then Simon? Yeah. Look, we're not giving huge detail on the projects that we've cut. What we've done is maybe focus on those programs that are obviously around legal and compliance because we're not trying to diminish what we invest in those areas. We want to prioritize the key transformational investment that we've got going on at the moment, which is getting our Midlands hub up and running in the summer. Beyond that, we've absolutely focused on those initiatives that pay back sooner rather than later. That's how we've approached it. In terms of outlook for next year, I think all I would say, we're not giving a number today, but we haven't just, you know, snowplowed this year's cuts forward into next year. A large part of the reduction has been, you know, a red pen and a line drawn under the program rather than as just pushing things backwards and, you know. I'm not about to surprise you with a balloon step up next year as a result of the deferrals and reductions. Yeah. I think it's fair to say that GBP 250 million is the normal run rate at Royal Mail. It's been accelerated over the last few years. Yeah. There have been some things trimmed, though. Yeah. I think GBP 250 is more of a kind of BAU run rate t hat we should be expecting. Obviously within that, this year, we're accommodating some transformational investments. It's probably on the BAU side a bit lower than the norm. Yeah. Thanks, Mick. Simon? Yes. On the Post Office and Evri, you know, the first thing I would say is that actually our relationship with the Post Office is good. You know, we continue to work well together. I think it's important to emphasize what we're focused on. You know, what we're focused on is increasing the amount of business that we get direct to Royal Mail. You know, our online direct non-account volumes. Direct is now, you know, getting closer to 40%, a significant uplift on what we had pre-pandemic, and a lot of that driven by some real great success in terms of a better wrap, a more simplified product offering, and also Parcel Collect. That's very much what we're focused on. Thanks. Simon, you wanted to? Yeah. As we disclosed in the RNS, in GLS, the reported revenue decline is -3% and the organic is -13%. Thanks. Okay. Okay. Thanks, Andy. I think we can now go to our last question from Achal. Yeah. Hi. Good morning, gentlemen. Thanks for taking my questions. First of all, on your contracts with your retailers, with the strikes going on and with the risk of further strikes, what kind of discussions do you have with your customers? Do you see a risk of a permanent loss of business anywhere? That is my first question. Thanks, Achal. Simon? Yes. I mean, I think we've always been very clear that strike action damages the business and that, you know, in a hyper-competitive parcels market, you know, it's one press of the button to move volume from us to the competitors. What strike action actually does is weakens us and makes the competitors stronger. However, what I would say, and I covered it off today, and I think thanks to a really strong Net Promoter Score on the doorstep, you know, we remained number one on that. What our retailers are doing is bringing the volumes back to us as best that they can, which is why it is that the strike action we covered off today is having less impact than perhaps what we'd originally thought. As Mick covered off as well earlier on, the investments that we've made, you know, to make sure that on a strike day, that we can recover quickly and also deliver on that day, I think all of these things are helping. I think it's also important to emphasize what it is that our customers are asking us for, and what they're asking us for is turning the great GBP 900 million worth of infrastructure investments into what it is that their customers want, which is midnight orders delivered the next day, you know, with great quality at a cost that helps them be competitive, and also with low CO2. I think the big message that I hear from the retailers is, "Please deliver your change because that's the change we need for our business as well as yours." I hope that helps today. Thanks, Achal. Okay, that's great. I think that's all we have time for today. Thank you everyone very much for joining us this morning. As always, I'm here with the rest of the Investor Relations team if you have any further follow-up questions. Otherwise, do have a very good morning, and that's goodbye from us. Thank you very much.