CEO Business Review
OUR MARKETS
Downstream Access Mail Bulk mail is our core business area, which comprises a portfolio of collection and sortation services, with onward delivery via Royal Mail (known as Downstream Access or DSA) and DSA accounts for 58% of the total letters market. Whistl’s share of the Downstream Access Mail volumes in 2016 was over 50% and we remain the key competitor to Royal Mail Retail. The ability to deliver real value continues to be important in a highly competitive market. By focusing on excellent account management and consistent quality of service, we have retained all key strategic customers in 2016, alongside delivering significant new client wins. Although overall mail volumes in the UK remain under pressure, Downstream Access Mail volumes have remained remarkably stable since 2011. There are, however, still an annual five billion items which do not go through Downstream Access which presents an opportunity for Whistl. The main market factors that influence the growth or decline of mail volumes include: e-substitution (which is the main driver for decline of transactional mail volumes, such as invoices and statements); GDP growth (traditionally a driver for advertising mail growth); and Royal Mail price rises. Doordrop Media Doordrop Media focuses on targeting, distribution and sampling services and we continue to be market leader in this sector. It remains an important marketing medium, particularly for the financial sector, charities, retailers and ecommerce companies. Doordrop Media remains one of the most effective customer acquisition channels for marketeers. Our Doordrop Media business has outperformed the market and increased its share of Royal Mail distribution volumes from 24.6% to 30.7% and it also saw an increase in revenue of 19.7% compared with 2015 revenues.
Parcels Within the Parcels market we continue to extend our service offering and this now includes next day tracked, business to business and 48-hour services. The UK parcel sector remains the main driver of growth in the delivery market with continued volume growth in 2016. Whistl’s Parcels business saw an 8.6% volume growth compared to 2015. Books were a key sector for new business growth and three of our top five new accounts are book wholesalers. Parcels remain a key part of our growth strategy in the UK and international markets and, with an excellent run rate of new business wins at the back end of 2016, we expect strong double digit growth in 2017. International The volume of the international outbound Parcels market as a whole grew by 4.0% in the last year, however Whistl saw a 30.2% growth in international business during 2016 versus 2015. As part of our international strategy to grow inbound and outbound mail and Parcels activities, we broadened our carrier network from one key supplier to multiple partners. In 2016 we converted one of our largest financial services customers to use our international services.
Strategic Report | Whistl Annual Report 2016
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