What we do
• Operate in the Business to Business space providing services to consumer-facing clients
• Services focus on the design, production and distribution of customer communications
• Customer communications are of a marketing, regulatory or transactional nature
• Distribution can be in paper or digital formats (email, text, mobile or social media)
• UK business with a growing international footprint
Objectives
To deliver over the next three years:
– a double digit margin on revenue (excluding pass through)
– 20% of revenues from non-UK sources
Status
• Full list, classified within support services sector
3. Communication, channelled
Phil Dean
Managing Director
Creative Services
Tony Strong
Managing Director
Group Operations
Jo Cowl
Financial Controller
Mark Stoner
Managing Director
Sourcing and Logistics
Introductions
Andy Blundell
Chief Executive
Nigel Howes
Finance Director
Dave Rushton
Group Managing Director
John Wells
Group Commercial Director
4. Communication, channelled
Agenda
9.30 – 10.00 Arrival and coffee
10.00 – 10.20 Welcome and Introductions – Andy Blundell
10.20 – 11.00 Group Overview – Dave Rushton, Nigel Howes
11.00 – 11.15 Q&A
11.15 – 11.30 Coffee
11.30 – 11.50 Design – Phil Dean
11.50 – 12.10 Produce – Tony Strong
12.10 – 12.30 Deploy – Mark Stoner
12.30 – 12.50 Q&A
12.50 – 13.00 Closing
13.00 – 14.00 Networking lunch
5. Summary
Investment case
Management
• a strong team with a record of successful delivery
Technology
• a reputation for manufacturing excellence and innovative solutions
• trusted to deliver personalised communications accurately, securely, reliably and at scale
Competitive position
• a differentiated offer
Profitable growth
• a record of achievement
• market trends that play to our strengths in the UK and internationally
• an established portfolio of blue-chip clients
• strong new business pipeline
Quality of earnings
• two thirds of revenues underpinned by multi-year framework contracts
• robust financial discipline
Dividend
• a progressive policy and an attractive yield
6. Communication, channelled
What we do
• Operate in the Business to Business space providing services to consumer-facing clients
• Services focus on the design, production and distribution of customer communications
• Customer communications are of a marketing, regulatory or transactional nature
• Distribution can be in paper or digital formats (email, text, mobile or social media)
• UK business with a growing international footprint
Objectives
To deliver over the next three years:
– a double digit margin on revenue (excluding pass through)
– 20% of revenues from non-UK sources
Status
• Full list, classified within support services sector
Business overview
Communication, channelled
7. Communication, channelled
Market Trends: Communisis is well positioned
Observation
Outsourcing of marketing services
Greater focus on ROI
Increasing value of content
Emphasis on global campaigns and consistency
of messaging
Progressive migration from traditional
print to digital formats including
personalised messaging
Implication
Opportunity for providers with broad and
deep offering
Growing demand for:
• Data services
• Personalised messages
• Transpromotional output
Demand for campaign design
• Better communication
• Clearer documents
Need for suppliers with an international capability
Overcapacity in print
Growing demand for digital capabilities
Opportunity for players with an integrated multi-channel
service offering
9. Communication, channelled
Scale
Revenues
– £200m +
– approximately half from financial services with an increased proportion
from retail, telecoms, utilities, charities and government bodies
– two thirds underpinned by multi-year framework contracts
Production capability
– 1.9m pages per day of personalised (i.e. individual) communication
– no tolerance on accuracy – every one has to be right
Group overview
Communication, channelled
10. Operations
Group overview
Communication, channelled
London
Regulatory communications
and Head Office
Leeds
Design and Direct Mail
largest facility in Europe
Liverpool
Statements – largest dedicated
producer in the UK
Manchester and Crewe
Security Products –
dominant UK provider
Newcastle
Sourcing/Logistics
Bangalore
50 software developers
based in India
– employ 1500 people
– 122 based on-site at 18 client locations
12. Communication, channelled
Clients – Blue chip portfolio including:
Group overview
Top 5 UK
headquartered banks
Top 10
Building Societies
Government bodies
Largest mobile
phone operator
Major retailers and
supermarkets
High profile charities
Leading gas and
water utilities
Global consumer
products group
Loyalty cards
17. Communication, channelled
*Based on increase in interim dividend
Dividend per share (p)
Pre-exceptional operating profit
Analysts’ pre-exceptional operating profit
Revenue
0 120
2009
Actual
2010
Actual
2011
Actual
2012
Analysts’
Consensus
0
+16%
+10%
+22%
H2
H1 H1 H1 H1
1.29p
2.55p
1.29p
2.88p
1.50p
4.27p
1.65p*
5.00p
7
6
5
4
3
2
1
0
2009
Actual
2010
Actual
2011
Actual
2012
Analysts’
Consensus
pence pence
60.0
50.0
40.0
30.0
20.0
10.0
0.0
£m
2
1.5
1
0.5
0
Adjusted EPS (P) (fully diluted)
EPS and Dividends
Finance overview
18. Communication, channelled
hare (p) Bank debt Average net debt Total facilities
120
2009
Actual
2010
Actual
2011
Actual
2012
Analysts’
Consensus
’
us
0
p*
0p
2
sts’
nsus
2009
Actual
2010
Actual
2011
Actual
2012
Analysts’
Consensus
pence
60.0
50.0
40.0
30.0
20.0
10.0
0.0
£m
2
1.5
1
0.5
0
£22.0£22.7
£15.8£16.8
Bank debt
Finance overview
19. Communication, channelledCommunication, channelled
2008 Triennial
valuation
Benefit of
liability
reduction
initiatives
Investment
gains net of
interest
Market
movements
and
assumption
changes
2011 Triennial
valuation
Impact of
Central Asset
Reserve
(CAR)
2011 Triennial
valuation
(adjusted for
CAR)
£40.7m
£18.6m
£5.1m
£21.3m
£38.3m
£9.8m
£28.5m
Pension deficit
Finance overview
20. Communication, channelled
2009 Actual Medium term
Communication, channelled
4.3% 10%
Better capacity
utilisation
High speed
colour digital
T300 + T400
Site consolidation
Restructuring
Orchestra Bristol
Kieon
Yomego
The Garden Marketing
Postal sortation
ebilling/statements
Transactional services
Marketing technology
Integrated service
propositions
Design services
Cost reduction Acquisition
synergies
High margin
services
Progress towards double digit margin
Finance overview
24. Communication, channelled
Customer communication strategy
• Campaign planning – print and digital
Content Management
• Design and document composition
• Software production – websites and mobile applications
• Content creation – copywriting, editorial, photo/video/computer-generated graphics
• Content communications
Insight and Measurement
• Market research
• Data analytics
• Social media
• Search/digital marketing optimisation
• Reputation and sentiment
• Response handling
Design Services and Capabilities
Communication, channelled
Design
25. Digital is the
new default
Design
Why these capabilities are important
Communication, channelled
28. The complete customer communication services provider.
Four agencies in one, with over 120 experts, from strategy and
creative to social media and data.
Design Services and Capabilities
Communication, channelled
Design
Communication
strategy
Social strategy
and measurement
Digital
production
Regulatory
communications
33. Communication, channelled
Profitable Growth
• Selecting the right
partners
• Investment in cutting
edge technology
and capabilities
• Increasing market
share – multiple output
channels
• Reducing our clients’
costs and gain sharing
the benefits
Customer Intimacy
• Cultivating and
nurturing lasting
relationships
• Identifying clients’
unique needs and
delivering solutions
• Collaborative working
• High levels of client
satisfaction
Operational Excellence
• Quality and Service
delivery
• Sustainable,
repeatable, risk free
performance
• Continuous
improvement
and innovation
• Process efficiency
and effectiveness
Employee and
Organisational
Development
• Employ, develop and
retain the best people
• High performing, team
based culture
• Focus on ownership,
accountability and
results
• Learning organisation –
feedback
Operations strategy
Produce
34. Communication, channelled
Choice of services
Produce
Design and data services
Document composition
Digital colour printing (white paper solution)
Multi-channel delivery
Postal management
Data receipt Data processing Document composition
SMS
Web
Print and enclose
email
35. Communication, channelled
Manufacturing capabilities
• Four Centres of Excellence
• Dominant position in the UK cheque market with 94% share
• The largest dedicated Transactional and Direct Marketing
sites in Europe
400,000 sq/ft
4.2m products produced and despatched every day
• Investment in leading-edge manufacturing technology with global
strategic partners HP and Pitney Bowes
• 850 highly skilled manufacturing technicians and support staff
• Operational excellence delivering the highest service and quality
performance in our sector
Produce
37. Communication, channelled
Client benefits
• Effective data management delivering aggregate
postal savings £30m pa
• Operational integrity, security, risk and reputation
management
• Outsource of non-core compentencies to industry experts
• Advise, collaborate and work in partnership with our clients to deliver highly
effective multi-channel communications
• Deliver on promises
Produce
38. Communication, channelled
Scale
• Produce 1 in 7 packs delivered in the UK
• Print 6bn pages p.a.
• Group networked infrastructure allows sites to act as disaster recovery
locations for each other
Data driven print items:
– End of 2011 – 600m of printed pages were data driven and personalised
– End of 2012 – 1.8bn of printed pages were data driven and personalised
– 85% of all company communication today still relies on print
– 15% of UK corporate spend is attributable to publishing, including
customer statements and direct mail
– 75% of statement mail is in bank, credit card, utilities, telecom and
insurance
Produce
40. Communication, channelled
4
I’d like more detail
What am I paying for?
Total kWh used 10526.14
Total gas kWh used 9795.14
Total electricity kWh used 731.00
What’s a kilowatt hour?
A kilowatt hour gives you:
orA cooked breakfast
for a family of four
Food kept fresh
and frozen for a day
Your electricity use in detail
meter: Z99E21886
Daytime
23 November 2011 meter read 46264
15 February 2012 meter read 46606
Actual kWh used 342
Cost of first 201 kWh used at 27.14p £54.55
Cost of next 141 kWh used at 14.43p £20.35
Daytime electricity used £74.90
Nighttime
23 November 2011 meter read 17778
15 February 2012 meter read 18167
Actual kWh used 389
At a cost of 6.59p
Nighttime electricity used £25.64
Total electricity used £100.53
Dual fuel discount -£3.73
VAT at 5% £4.84
Total electricity including VAT £101.64
Total energy used = £477.97
Your gas use compared
to last winter (kWh)
0 3000 6000 9000 12000 kWh
23 Nov 2010 - 07 Feb 2011
23 Nov 2011 - 12 Feb 2012
Your electricity use compared
to last winter (kWh)
0 200 400 600 800 kWh
23 Nov 2010 - 07 Feb 2011
23 Nov 2011 - 12 Feb 2012
How does this compare to last year?
Your gas use in detail
meter: G4A50008210901
23 November 2011 estimated meter read 26453
15 February 2012 estimated meter read 27327
Estimated units used 874
Gas units converted into kWh 9795.14
Cost of first 604 kWh used at 4.63p £27.99
Cost of next 9191 kWh used at 3.59p £330.42
Total gas used £358.41
VAT at 5% £17.92
Total gas including VAT £376.33
From 15 Feb 2011 to 14 Feb 2012, you used 29826 kWh of gas.
If you use the same rate over the next 12 months, we estimate your
cost will be £1041 (Based on the following breakdown)
15 Feb 2012 - 14 Feb 2013
Period
Fixed
Your tariff
£1041
Cost
£1041
Projected cost of gas over the next 12 months
From 15 Feb 2011 to 14 Feb 2012, you used 2017 kWh of electricity.
If you use the same rate over the next 12 months, we estimate your
cost will be £233 (Based on the following breakdown)
Projected cost of electricity over the next 12 months
15 Feb 2012 - 14 Feb 2013
Period
15 Feb 2012 - 14 Feb 2013
Fixed
Your tariff
Duel Fuel discount
£248
Cost
- £15
£233
Gas is a natural product. One unit does not always produce
exactly the same amount of energy. In order to price energy
from gas consistently, we convert your units used into
kilowatt hours of energy, using the following formula:
1. metric units used 874
2. x calorific value 39.4529
3. x volume correction 1.02264
4. ÷ metric conversion ÷ 3.6
5. = kWh 9795.14
Bill redesign
Produce
7
More ways to pay
5 Easy ways to save…
Save with Direct Debit
Switch to Direct Debit to receive around
£67 discount a year off your energy bill
Save by going online
Save up to £170 a year by managing
your account online and switching to
Online Energy
Collect Nectar Points
On all of our products services
Can I save some
money?
Where can I make some savings?
Are you getting the best deal?
We want to make it easier for you to choose
the best possible tariff. The options below show
average annual costs for a medium band
usage household and compares your current
tariff to the other tariffs we offer
Standard tariff
• Fixed tariff
• Until September 30th
Annual cost: £xxx
• £35 to switch or exit
You’ll need your customer number:
85 88 08 31 28 35
PayPoint
Take this bill and pay by cash
Bank or by post
Make cheques payable to
‘British Gas Trading Ltd’
write your customer number
on the back. Take this
completed payment slip
with your cheque to the
bank, or send to:
British Gas,Payment Area 55
Camberley, GU95 1 AB
Credit or Debit card
Online or by phone: call us
on 0800 107 0224
Internet or phone banking
Pay directly to us, our
account number is
71584685 and sort code
40-05-30
SMS
Call us to register for this
handy service
Post office
Take your bill, payment card,
and payment slip and make
your cheque payable to ‘Post
Office Ltd’
Allow 3 working days for
payment to clear the
bank/Post Office and 5 if
you pay by post
Please don’t send cash
in the post
Online
britishgas.co.uk/paymybill
Call
0800 048 0202
Direct Debit
It’s easy, convient and saves
you money. Plus collect 800
Nectar points for each
account you switch
Your current tariff Your tariff switch options:
Standard tariff
• Standard variable
• Until 30 June 14
Annual cost: £xxx
No exit fee
Online tariff
• Standard variable
• Until 30 June 14
Annual cost: £xxx
No exit fee
6
Where does your money go? Your payment covers much more than just the
wholesale cost of gas and electricity. Here’s a
breakdown of where your money currently goes*
*Example based on industry average consumption of 16,500 kWh of gas per year and 3,300 kWh of electricity, taking average regional prices. Breakdown figures are indicative as at
September 2011 and are based on actual costs from January to September 2011 and forecast costs for October to December 2011. Profit figure based on average profits for gas and
electricity supply after tax from 2006 to 2010
EXTERNAL
COSTS
OUR COSTS
Bought from wholesale market
Gas
Government obligations taxes
Including Green Levies Social Support
Delivery to your home
Regulated by Ofgem
Operating costs
Profits
56%
21%
10%
8%
5%
38%
26%
19%
12%
5%
Electricity
2
Your winter
payment is
What do I owe?
£477.97
Gas total: £376.33
Electricity total: £101.64
= 10526.14 kWh
Your estimated energy
use this winter is
You’re on our Fixed Price Promise tariff
which ends on the 30th September Your bill in more detail
See step 4
3
How can I get in touch?How do I pay?
Your payment
is due by
Save with Direct Debit
Switch to Direct Debit to receive
around £67 discount a year
off your energy bill
28th
March
Where can I get more help?
See step 8
Speak to one of our team
0800 048 0202
Mon-Fri 8am - 8pm / Saturday 8am - 6pm
britishgas.co.uk/securebills
Your estimated meter readings
Gas
Electricity-Daytime
Electricity-Nighttime
2 7 3 2 7
4 6 6 0 6
1 8 1 6 7
I want to change how to pay
See step 5
1
Ms Sample
Sample Road
Sample
ABC 123
Your customer number:
85 88 08 31 28 35
15th February 2012 23rd November - 15th February
Bill date: Bill period:
Your winter gas
electricity bill
44. Communication, channelled
Retail 7
Bank 4
Retail 6
Bank 6
Retail 1
Bank 2
Bank 5
Retail 2
Retail 4
Retail 3
Bank 3
Retail 8
Bank 1
Retail 5
Germany
Italy
FMCG
CUSTOMER
France
FMCG
CUSTOMER
FMCG
CUSTOMER
Onsite teams – 122 employees across 18 sites
Deploy
45. Communication, channelled
Supply chain management
Scale
• 45,000 tonnes paper – £40m through mills
and merchants
• 850m envelopes – £11m
• £41m on outsourced product
• £30m on post with Royal Mail
• £3m on data – lifestyle and specialist
Deploy
46. Communication, channelled
Technology services
• Customer communications management
• Facilitates process streamlining
• Real-time quotes driving choice and cost efficiencies
• Brand management and consistency
MANTLCustomer enabling technology
50. Communication, channelled
A case in point
Deploy
“Communisis has integrated the value
chain and is enabling significant cost
savings and cost avoidance to be
achieved within this contract”
Head of Procurement, Barclays
51. Communication, channelled
A case in point
Deploy
• Communisis provided a fully holistic approach to integrating and
co-ordinating the separate business functions
• Transforming the way documents are created
• Providing a truly integrated print logistics solution to manage stock levels
and distribution schedules seamlessly into the complex branch network
• Eroding boundaries between the Bank’s business units
• Consolidating the supply
chain and aligning it
to the Bank’s
corporate objectives
53. Communication, channelled
Summary
Investment case
Management
• a strong team with a record of successful delivery
Technology
• a reputation for manufacturing excellence and innovative solutions
• trusted to deliver personalised communications accurately, securely, reliably and at scale
Competitive position
• a differentiated offer
Profitable growth
• a record of achievement
• market trends that play to our strengths in the UK and internationally
• an established portfolio of blue-chip clients
• strong new business pipeline
Quality of earnings
• two thirds of revenues underpinned by multi -year framework contracts
• robust financial discipline
Dividend
• a progressive policy and an attractive yield