WHISTL ANNUAL REPORT 2022

Annual Report 2022 WHISTL CONSOLIDATED LIMITED

Whistl Annual Report 2022

Contents

Strategic Report 4 Executive Chairman’s Statement 6 Our Business Areas 11 Financial Review 14 Our People 18 Environment, Social & Governance 29 Risk Management 32 Governance Financials 38 Directors’ Report 40 Independent Auditor’s Report 42 Financial Statements 47 Notes to the Financial Statements

67 Directors & Advisors 68 Glossary

Whistl Consolidated Limited Consolidated financial statements for the year ended 31 December 2022. Registered number: 11995959 (England and Wales)

Whistl Annual Report 2022

Strategic Report Executive Chairman’s Statement

In 2022 we remained resilient in face of the economic challenges and in 2023, we remain confident we will grow and improve the operational efficiency and overall profitability of the Group. Nick Wells Executive Chairman

Whistl Annual Report 2022

Our Mail business performed well in 2022 with new customers won and significant volume retention, despite the impact of Royal Mail industrial action.

Welcome to our annual report covering 2022. There is no doubt that many businesses have faced a tough trading environment throughout the year. The challenges we faced in 2022 were universal, including the post pandemic correction in e-commerce growth; inflationary pressure on costs; rising fuel prices; and economic uncertainty. There were continuing Covid restrictions on Chinese manufacturers, supply chain disruption across the globe and the impact of the war in Ukraine. As a company that is impacted by variations in marketing and discretionary consumer spend our 2022 turnover declined by £53.1m to £770.1m and EBITDA before exceptional items went down from £15.6m to £7.2m. This reflects mainly the impact of these economic headwinds, plus the fact that 2021 comparatives are challenging given it was an exceptional trading year. Our diversified and portfolio-based business remained resilient. The Whistl Group strategy with four complementary divisions is unchanged with the “core” businesses of DSA Mail and Doordrop delivering market share gain and the Parcels and E-commerce Fulfilment businesses looking for revenue growth. This comes from: our strong relationships with customers; our investment in our employees; and our commitment to be a sustainable operator in the communities of which we are part.

Our Mail business performed well in 2022 with new customers won and significant volume retention, despite the impact of Royal Mail industrial action. Although parcel volumes fell, reflecting the overall parcel market, we saw a move towards higher margin tracked services as the price differential with untracked continued to close. E-commerce Marketing which is exposed to consumer behaviour faced challenges as consumers reduced spend due to the perceived threat of recession and cost of living squeeze. International volumes were impacted by continuing global disruption in ports, inflated costs of containerisation and supply chain issues. In our Fulfilment division, we processed fewer items as part of the post pandemic recalibration of online consumer spend. Also, our customers had difficulty forecasting demand which impacted on our ability to manage costs and efficiency. A new management team is now in place in the Fulfilment division which will have a positive impact on the performance in that division. We continued to look for operational efficiency opportunities and invested in initiatives including a new Transport Management System and recruitment and training to reduce our reliance on agency workers. Investment in our colleagues was ongoing with training available for every employee. We launched new programmes such as the Sortation Apprenticeship, ensuring that every person’s skill and career were enhanced.

We remain committed to operate sustainably and act to reduce the adverse effects on the environment. During the year we began developing our road map to meet UK Government mandatory targets and expected best practice.

Nick Wells Executive Chairman 25 May 2023

Whistl Annual Report 2022

Strategic Report Our Business Areas

Revenue £m

Downstream Access Mail -£18.5m

£482.8m

2022

£501.3m

2021

Downstream Access Mail Our Downstream Access (DSA) business delivered a solid performance with high profile wins such as HMRC on top of our continuing successful customer retention, given the economic and inflationary circumstances. The overall addressed market letter volumes (letters and large letters) rebounded by 3.4% to 8.05 billion items in 2021-22*. DSA accounts for 66.9% of total addressed letter volumes and overall access mail volumes increased by 7.5% year-on- year* and Whistl continues to retain a leadership position in this sector. The business faced significant challenges towards the end of the year due to the Royal Mail industrial action, but we were pleased that we were able to work with our customers to mitigate any potential delays with a 100% handover mail rate to Royal Mail. During 2022 we focused on achieving greater operational efficiency which helped us to offset some of the pressures from inflated costs. We appointed a new Head of Operations for our depot estate and invested in a new Transport Management System (TMS), enabling us to optimise our fleet use across the Group. It has led to reduced fuel use, helping us meet our carbon reduction targets; better customer experience through real time information; and a reduction in potential delivery failure. In the previous year, driver shortages impacted on the whole sector but we have undertaken several initiatives to increase our full-time driver employee ratio, enabling us to reduce reliance on agency drivers.

Parcels -£29.8m

£ 137.6 m

2022

£ 167.4 m

2021

International -£3.6m

£ 28.1 m

2022

£ 31.7 m

2021

Fulfilment -£1.4m

OUR NEW PURPOSE-BUILT 78.000 SQ FT BRISTOL DEPOT IS NOW FULLY-OPERATIONAL

£ 78.9 m £ 80.3 m

2022

2021

E-commerce Marketing +£0.2m £ 42.7 m £ 42.5 m

Operationally, we have a stable and reliable network, and our new Bristol depot has enabled us to further improve efficiencies. We have introduced semi-automation through boom conveyors that have sped up the vehicle loading process. Further investment will be made in tracked automation to handle our increased volumes. Our Posthub brand had a successful year and won over 150 high-profile customers in the retail, charity and publishing sectors to plan and execute mail campaigns. Brands include WWF, Crew Clothing, JoJo Maman Bébé, Harrods, NSPCC, Barnardo’s, ProCook, Warners and Mortons. Posthub serves a gap in the market for businesses who use advertising mail but also require a more personalised service, including data processing requirements as well as delivery management.

2022

2021

Group -£53.1m

£ 770.1 m

2022

£ 823.2 m

2021

During 2022 we focused on achieving greater operational efficiency which helped us to offset some of the pressures from inflated costs. We appointed a new Head of Operations for our depot estate and invested in a new Transport Management System (TMS), enabling us to optimise our fleet use across the Group.

* Annual Monitoring Update for Postal Services Financial Year 2021-22

Whistl Annual Report 2022

We solidified our position in the market through an improvement in the mix and quality of parcels we process. Additional pricing and efficiency moves have enabled us to offset the lower parcel volume.

Parcels Parcel volumes in the UK declined in the year, reflecting the easing back of Covid led online focused buying. According to Ofcom,* total parcel volumes decreased by 5.7% to 3.8 billion items in 2021-22, compared with the 47% growth recorded in 2020-21. Domestic parcel volumes fell by 0.8% year-on-year to 3.4 billion items (compared to 53% rise in prior year). Next day (D+1) delivery items made up 65% of measured domestic parcel volumes during 2021-22, compared with nearly 60% the previous year.* Total parcel volumes across all UK postal operators decreased by c.6% to 3.82 billion items with domestic volumes declining slightly (by c.1%).* Against the background of a downturn in overall parcel volumes, we continued to invest in our operations with the appointment of our first Managing Director of Whistl Parcels to focus on large organisations and core strategic customers using our national network. We solidified our position in the market through an improvement in the mix and quality of parcels we process. Additional pricing and efficiency moves have enabled us to offset the lower parcel volume. We have won significant contracts in the horticulture sector with You Garden and Sarah Raven, joining other big brands including TM Morgan. Our Parcelhub brand focusses on medium-sized organisations and large SMEs with a more regionalised approach using onsite local collections and consolidated volumes. The Leicester site, opened in 2021, is performing well and we added sites in Birmingham and Leeds to the portfolio.

Whistl operates in a regulated environment with Ofcom as the Postal Sector regulator. In July 2022, Ofcom published its review of postal regulation which introduced some minor changes to the existing regulatory framework: including strengthening the monitoring of sustainability and efficiency of Royal Mail and introducing new consumer protections in parcel services. It has decided that the overall regulatory framework for postal services remains appropriate for the next five years and so Whistl is free to continue its well-established activities in a stable regulatory environment. Despite the Supreme Court ruling that Royal Mail has no grounds to appeal an Ofcom fine, which it has now paid, there has been no resolution for Whistl to the 2014 complaint that Royal Mail had abused its dominant position in connection with Whistl’s end-to-end business. Whistl continues to pursue its damages claim for this anti-competitive behaviour. Whistl ensures that it has frequent dialogue and engagement with Ofcom, Royal Mail, and the Mail Competition Forum and has quarterly engagement with the Business and Trade (BAT) Committee and the Wholesale Access Group to ensure that its own views on regulatory and market developments are heard and help shape the market.

OUR PARCELHUB BRAND WAS BOTH REFRESHED AND ROLLED OUT MORE WIDELY

The Parcelhub visual brand identity underwent a refresh in the year to coincide with the first phase in the rollout of its electric collection fleet and a more cohesive look aligned to the Whistl brand. We have developed and launched Wismo (Where is my order) software that automates the process between collection and delivery, providing automatic real time updates and reconciliation. The reduction in human interaction has enabled speedier reconciliation of customer enquiries. During the year, we became the first parcel and delivery consolidator to become integrated as an Amazon delivery carrier. It allows our customers who trade through Amazon to select us as their carrier, enabling us to support customers on one of the largest online marketplace websites. Additionally, we can now offer our customers, Yodel’s new Xpect Mini and Medium 2-hour delivery window services.

* Annual Monitoring Update for Postal Services Financial Year 2021-22

Whistl Annual Report 2022

Strategic Report Our Business Areas

International Despite the legacy issues caused by the pandemic, Brexit, the war in Ukraine and the subsequent economic pressures, we are holding our position in the international market – but 2022 remained challenging. For our customers, these factors had a huge impact on their ability to forecast volume and obtain stock to fulfil orders. Parcel imports and exports declined by over 30% year on year due to global supply chain disruption as well as increased complexity and changes to Customs Duties and import/export tariffs. International inbound volumes decreased by 32% year on year (having risen 31% in 2020-21) and international outbound volumes declined by 36% in the same period (up 3% in 2020-21).* The post Covid shift from air to sea transportation continued, but containerisation issues were significant in the year caused by reduced capacity, delays at port and strike action. In addition, we have experienced downward pressure on pricing due to increased competition.

We continued to invest in the business and launched a fast-tracked service for SMEs to the USA. The service, taking an average of 6.5 days from dispatch to delivery, enables access for SMEs to the UK – USA fast-tracked market at a cost-effective price, typically unavailable to low volume mailers. By upgrading to this service, UK SMEs can now offer their USA based customers an enhanced delivery service with improved item visibility on its delivery journey alongside the quicker delivery times. Whistl is approved by the UK Border Force and HMRC as a Customs Clearance Agent and offers air, sea and road clearance for mail and parcels entering the UK from our International Gateway near Heathrow. Through one point of contact we offer our customers a full end-to-end solution from import and clearance through to final mile destination in the UK or abroad.

FAST-TRACKED SERVICE FOR SMEs TO THE USA

THE SERVICE, TAKING AN AVERAGE OF 6.5 DAYS FROM DISPATCH TO DELIVERY

* Annual Monitoring Update for Postal Services Financial Year 2021-22

Whistl Annual Report 2022

Fulfilment Our Fulfilment performance reflected the rebalancing of the sector following the pandemic boom and the inflationary impact on consumer spending towards the end of the year. Despite this background and fluctuating customer volume affecting forecasting, partly driven by supply chain disruptions, we performed well during a busy peak with a good quality of service meeting express and next-day delivery requirements. For example, we successfully managed the trend for air fryers, an energy saving appliance as well as a healthy way to cook food, driving both B2C and B2B fulfilment activity for one of our high-profile customers. In common with other businesses in the sector, the division was impacted by an increase in cost base and availability of quality experienced staffing during the year, which has adversely impacted overall profitability. The various fulfilment acquisitions are now fully integrated into the business and, during the year, we delivered new customer solutions and system enhancements to our WMS to increase operational efficiency. Despite this background and fluctuating customer volume affecting forecasting, partly driven by supply chain disruptions, we performed well during a busy peak with a good quality of service meeting express and next day delivery requirements.

Contact centres In April we launched a new integrated telecoms system across the business, and contact centre sites can now share traffic loads more efficiently. This further enhanced the quality of service we can provide customers as well as allowing us to scale capacity by utilising additional work from home resources, if required. We joined the Call Centre Management Association (CCMA) to take advantage of their extensive resources helping us to discover new ways to improve the customer experience we deliver. The team had great success with a Gold award win for Outsourcing Partnership of the Year at the Contact Centre Awards for its work with TOCA Social. Our relationship with POPSA has further strengthened with them utilising a flexible resource of 60 call handlers, 24/7, including use of our multi-language service.

The system helps customers: • Maximise their sales opportunities • Reduce inventory holding costs • Maximise order margin • Improve real time visibility of order / stock status and returns Plans for further semi-automation are ongoing and we are reviewing options to further utilise our current and future infrastructure to enable our next phase of fulfilment growth. We have worked with many long-standing customers who have grown and evolved their product offer to ensure that we meet their current needs as well as winning new customers such as IT Luggage and Hugo & Hudson. We have consolidated warehousing locations where optimal and invested in a new property in Gateshead and new bagging machines in Rushden to facilitate increased productivity. A Commercial Board has been appointed to enhance the opportunities to cross sell fulfilment contact centres across the business whether to DSA, International or DDM customers and we have upskilled the sales team to widen their product knowledge and relevant market understanding. For context, in 2022 UK online sales fell 10.5% compared with the previous year according to business group IMRG. It is the first time that online sales have fallen on an annual basis since 2000.

GOLDEN GOAL! OUR CONTACT CENTRE

TEAM WON OUTSOURCING PARTNERSHIP OF THE YEAR TOGETHER WITH INTERACTIVE FOOTBALL CLIENT TOCA SOCIAL

Whistl Annual Report 2022

Strategic Report Our Business Areas

T H E H OME S T O R E

E-commerce Marketing In 2022, we successfully integrated Relish within the Group and saw 77% growth in Leafletdrop, processing over 100 million items since the inception of the platform. At the start of the year there was a rebound in marketing spend, pandemic reopening of the economy. This move from product to experiential consumer spending was also a factor behind the cooling of online purchases. Additionally, consumer spend restraint accelerated over the year due to higher costs as inflation hit double figures. This economic instability saw marketers reduce spend or postpone planned campaigns. particularly in travel-related promotions following the post For Relish, our online sampling business, clients were impacted by a shortage of stock arising from supply chain issues. Stock allocated for sampling or marketing activity was diverted to be sold directly to consumers. Despite the uncertain economic background and numerous challenges, we are pleased with the resilience of our E-commerce Marketing business over the year and it is well positioned to grow with an economic recovery in the UK. Spend on direct mail advertising rose in 2021-22. The Advertising Association/ World Advertising Research Centre (WARC) reported that expenditure (which includes production and elements of postage) increased by 13.7% in real terms from £0.95bn to £1.08bn. This compares to a 31.2% decrease in the previous year.

Our Leafletdrop offering continues to perform strongly as marketers become more self-reliant and with the trend of SMEs accessing self-serve marketing platforms. In 2022 we passed the landmark of processing 100 million items since the inception of the platform.

Through integration of the Relish team into the Group we have now started to realise the benefits of being able to offer new routes to market through in-parcel sampling. Several customers from across the Group have now used the Relish service. Our Leafletdrop offering continues to perform strongly as marketers become more self-reliant and with the trend of SMEs accessing self-serve marketing platforms. In 2022 we passed the landmark of processing 100 million items since the inception of the platform. The team continued its award-winning streak securing the Gold IPM COGS award for Best Service Provided in Response to Covid-19 for The Royal National Lifeboat Institution. Additionally, it won a Bronze DMA Award for e-commerce brand Oddbox, for an eco-friendly and targeted campaign to support its expansion plans into new operating areas. We are confident in the growth potential of E-commerce Marketing as the competitive landscape for advertising spend is changing. Marketers are becoming more sceptical about the efficacy of a digital only approach. Whistl’s participation in the Advertising Association’s AdNetZero project underscores our commitment to providing clients with sustainable solutions that support the climate ambitions of both UK Government and businesses.

LEAFLETDROP TARGETING, PRINTING AND DISTRIBUTION OF DOORDROPS VIA OUR INTUITIVE ONLINE PLATFORM

Whistl Annual Report 2022

Strategic Report Financial Review

Group Performance Macroeconomic factors were challenging throughout 2022 with high inflationary pressures compounded by supply chain unpredictability that impacted customers, our cost base and limited our ability to maximise operational efficiency. These conditions were managed and the Group is poised to benefit from an increase in customer confidence and growth. We successfully consolidated significant investments made in 2021 and refocused the business after the volatility of Covid impacted 2020 and 2021. The Group’s financial performance and growth trajectory returned to pre-pandemic trends, with revenue of £770.1m, a 6.5% decrease compared to 2021 but a 12.4% increase compared to 2019, the last full year before the pandemic. Revenue increases compared to 2019 were focused in the growth areas of Fulfilment, Parcels, and International. Our diversification into e-commerce fulfilment and parcels has created commercial opportunities beyond the underlying market growth, through cross-selling multiple services across our customer base, as well as operational synergies.

2022 £m

2021 £m

Change £m

Consolidated profit and loss

770.1

Revenue

823.2 (53.1)

(726.2)

Costs of Sales Gross Profit

(773.7)

47.5

43.9

49.5

(5.6) (3.9) (9.5) (8.4)

(51.6)

Administrative Expenses (excluding exceptional items) Operating (loss)/profit before exceptional items

(47.7)

(7.7)

1.8

7.2

Underlying EBITDA 1

15.6

2022 £m (7.7)

2021 £m

Change £m

Reconciliation of Underlying EBITDA 1 Operating (loss)/profit before exceptional items

1.8

(9.5)

10.6

Goodwill amortisation

10.3 0.6 2.9 15.6

0.3

0.5 3.8 7.2

Amortisation of intangible assets Depreciation of tangible assets

(0.1)

0.9

Group

(8.4)

2022 £m

2021 £m

Capex Growth

1.4 2.6 4.0

11.2 2.3 13.5

Maintenance

Group

1 Underlying EBITDA represents operating profit before interest, tax and exceptional items adjusted for the depreciation and amortisation charge for the year.

Manoj Parmar Chief Financial Officer

Whistl Annual Report 2022

Strategic Report Financial Review continued

Exceptional administrative expenses Exceptional costs of £1.0m were incurred in 2022 in relation to the relocation of our Marlow Head Office into a smaller building following the changes to working patterns that have resulted from the Covid pandemic as well as aborted M&A advisory costs. Exceptional costs of £4.0m were incurred in 2021 in relation to start up losses at our new Lutterworth and Northampton Fulfilment sites as well as depot restructuring costs and aborted M&A costs. Taxation The effective rate of corporation tax was 3.3% (2021: 30.3%) which was lower than the standard UK corporation tax rate of 19.0% (2021: 19.0%). This reflects the impact of long- term capital investment programmes and timing differences, such as capital allowances and taxable losses. We generate revenue, profit, and employment, all of which deliver substantial tax revenues for the UK government in the form of VAT, Corporation Tax, and Income Tax. Our tax policy, which has been approved by the Board aligns with this strategy and ensures that we fulfil our obligations as a responsible UK taxpayer. The E-commerce Marketing division, expanded its gross profit due to the full-year impact of the acquisition of Relish Agency.

Dividend In the year the Board declared and paid priority dividends totaling £0.75m (2021: £1.5m) to holders of “A” ordinary shares. No other dividends were declared or paid in 2022 or 2021. Priority dividends are treated as a compound instrument in the financial statements with a liability recognised on the balance sheet and interest charged through the profit and loss account. Investment 2022 was a year of consolidation after the large investments made in 2021 which included the new Lutterworth and Northampton warehouses. The Fulfilment division focused on the onboarding of new customers to bring capacity added in 2021 on stream, together with managing our significant existing customer base. Maintenance capex across the group of £2.6m (2021: £2.3m) remained steady and reflects our policy to retain a well invested operational network and to drive efficiency. We implemented a new Transport Management System whose impact has immediately reduced the total distance driven, minimising transport costs. No new acquisitions were made in 2022 and all deferred consideration in relation to historic acquisitions have been settled. All investments have been funded by cash flows from ongoing operating activities and without recourse to our substantial unutilised lines of funding.

We have been able to offer integrated warehouse fulfilment and parcel solutions to e-commerce customers, leveraging Whistl’s expertise in these areas. The underlying EBITDA 1 of £7.2m was down on the record result achieved in 2021 but remains robust and has allowed us to maintain deep liquidity and balance sheet strength, providing a strong foundation for future growth and investment in new opportunities. Gross profit of £43.9m in 2022 was 11.3% lower than in 2021, but 15.9% higher than in 2019, the last full year before the Covid pandemic. In the first half of the year, the Fulfilment division faced adjustments in the labour market, with inflationary pressure on wages and staff availability intersecting with changes in customer demand patterns and supply chain issues which impacted the import of products into the UK. These factors together with the lack of predictability of demand and the ensuing operational inefficiency, partly contributed to the overall reduction in Group profitability in 2022. Within the Parcels, International, and Mail network, gross profit margins remained robust, and there was no repeat of the 2021 economy wide HGV driver shortage. We implemented measures to keep costs under control, despite record fuel and energy price increases caused by the war in Ukraine. The E-commerce Marketing division, expanded its gross profit due to the full-year impact of the acquisition of Relish Agency. However, the division experienced headwinds in the second half of the year, as worries of a recession in the economy reduced customer marketing budgets. Administration expenses excluding exceptional costs increased by £3.9m to £51.6m in 2022 (2021: £47.7m). After adjusting for the full year impact of acquisitions the increase was £2.8m (6%) and was driven by increased investment in IT systems and growth in staff costs as well as inflationary pressure on insurance premiums and other administrative costs. We will continue to exercise tough control on costs and investigate opportunities for efficiency and value.

2022 £m

2021 £m

Change £m

Financial Position

69.9 23.2

Goodwill

80.5 (10.6) 24.0 (0.8)

Fixed assets

0.5

Stocks

0.5

94.9 32.5

Debtors

85.0 40.8

9.9

Cash at bank and in hand

(8.3)

(165.6)

Creditors: amounts falling due within one year Creditors: amounts falling due after one year

(169.2)

3.6

(8.9) (1.3)

(5.1)

(3.8) (0.1)

Provisions for liabilities

(1.2)

Net assets

45.2

55.3 (10.1)

1 Underlying EBITDA represents operating profit before interest, tax and exceptional items adjusted for the depreciation and amortisation charge for the year.

Whistl Annual Report 2022

2022 £m

2021 £m

Change £m

Cash Flow

Underlying EBITDA 1

7.2

15.6 (8.4)

Change in net working capital

(8.0) (0.8) (1.0) (1.8) (0.2) (4.0) (0.1) (1.2) (7.3) (1.0)

0.8

(8.8)

Cash Flow from Operating activities before exceptional items

16.4 (17.2)

Exceptional Costs

(4.0)

3.0

Net Cash Flow from Operating activities

12.4 (14.2)

Tax (paid)/received

(0.1)

Net Investment in fixed assets Acquisitions (net of cash acquired)

(13.6) (5.7) (2.5) (9.5)

9.6 5.6

Other (including payment of deferred consideration)

1.3

Operating Free Cash Flow

2.2

Net interest paid Loan repayments

(1.0)

- -

(17.8)

17.8

Repayment of obligations under finance leases Movement in cash (decrease)/ increase

(0.1)

0.1

(8.3) (28.4)

20.1

Opening Cash Closing Cash

40.8 69.2 (28.4)

32.5 40.8

(8.3)

Financial Position & Liquidity Cash reduced by £8.3m to £32.5m due to the remaining unwinding of the Government Covid-19 VAT Payment Deferral Scheme, other movements in net working capital, investments in fixed assets as well as settlement of all remaining liabilities in relation to historic acquisitions. These outflows were partially offset by cash inflows from underlying trading. Net assets and shareholder’s equity reduced by £10.1m due mainly to the non-cash amortisation of goodwill of £10.6m. Whistl’s policy is to amortise goodwill over 10 years and is in accordance with the FRS102 accounting standard. In addition to cash at hand, Whistl’s liquidity is further supported by our fully committed irrevocable £75m funding line provided by HSBC which is divided into a credit and working capital facility and a supplier guarantee facility. Whistl’s policy is to maintain a high level of liquidity headroom which together with our strong balance sheet, cashflow and credit rating gives us financial flexibility to invest and grow. The net book value of tangible fixed assets and software reduced to £23.2m (2021: £24.0m) due to depreciation charges and disposals exceeding capex investment. Debtors increased by £9.9m (11.6%) to £94.9m (2021: £85.0m) despite the fall in full year revenue from £823.2m to £770.1m due to monthly phasing of

trading activity, a change in product mix as well as an average increase in debtor days. Debtor days in the Downstream Access and Parcels division increased from 27.9 days to 28.8 days between 2021 and 2022. Creditors due in less than one year decreased by £3.6m to £165.6m (2021: £169.2m). The remaining unwinding of Whistl’s participation in the Coronavirus VAT Payment Deferral Scheme partially offset a £2.0m increase in trade creditors, accruals and deferred income which increased in line with trade debtors and accrued income due to the monthly phasing of trading activity and a change in product mix. Creditors due in more than one year increased by £3.8m to £8.9m (2021: £5.1m) due to rent free period accruals on warehouses and hubs. Provision for liabilities of £1.3m (2021: £1.2m) relate to onerous leases for unutilised office accommodation. Cash flow Cash Flow from Operating activities before exceptional items was (£0.8m) in 2022 (2021: £16.4m). The decline was caused by a £8.4m reduction in EBITDA 1 and £8.8m increase in Net Working Capital. Net Working Capital cash outflow included an increase in Trade Debtors of £7.2m, partially offset by an increase of Trade Creditors of £2.3m.

The change in Net Working Capital also included £3.3m cash outflow due to repayments under the HMRC Covid VAT Deferral Payment Scheme (2021: £22.7m) which were included within Taxation and Social Security liabilities on the balance sheet. All remaining deferred VAT was paid to HMRC at the start of 2022 in accordance with the scheme rules. The net decrease in cash of £8.3m was after deducting £1.0m in relation to exceptional costs, £4.0m in relation to purchase of fixed assets and £1.1m in relation to deferred considerations on historic acquisitions. Credit and working capital management The Board of Management closely monitors credit and liquidity risks and is continually looking for improvements to working capital management. Days of trading in accounts receivable and accrued income, a key measure of debtor performance in Downstream Access and Parcels, increased from 27.9 to 28.8 days between 2021 and 2022. Key performance indicators The Directors are reliant on specific key performance indicators such as, statistics related to market share, sales growth, and profitability to provide important guidance as to likely activity and performance within the business. The key performance indicators are described within this Strategic Report.

1 Underlying EBITDA represents operating profit before interest, tax and exceptional items adjusted for the depreciation and amortisation charge for the year.

Whistl Annual Report 2022

Strategic Report Our People

Following the disruption to working practices because of the pandemic and the labour shortages in 2021, particularly in the logistics sector, we are pleased that the labour market has now stabilised. We put in place a number of initiatives to attract new talent including a dedicated Head of Recruitment to ensure we have an efficient recruitment process; the Whistl Driving Academy to train drivers for our fleet; alongside enhanced salaries reflecting the market trends. The increase in the ratio of permanent employees and investment in existing employees has delivered benefits to the business. For example, 93% of drivers are now directly employed and 84% of the hours worked in our DSA business are now by permanent employees. In our Fulfilment operations, we still require the ability to scale up with additional resource to deal with peak working, but we are looking to smooth this out through more efficient processes and automation. Whistl is a people business, and we believe it is crucial to invest in our employees to ensure that we provide the best possible service to our customers. We are passionate about helping develop the careers of our employees, investing time and money.

LEAP, our internal career development and leadership programme, provides a formal development framework and individual plan for everyone. Some of these programmes are now delivered by a third party partner as they have been evolved into formal apprenticeship programmes. We believe Apprenticeships play a key role in the development of entry level employees making sure the skills they develop are recognised in a formal accreditation. In 2022, 15 employees based at Whistl depots in Bolton, Bedford and Bristol embarked on the new Level 2 Sortation Hub Apprenticeship that was developed in association with the Institute of Couriers. Whistl was one of the ‘employer trailblazers’ that helped develop the standards for the new apprenticeship which was approved this year. Funding for the apprenticeship comes from the Apprenticeship Levy with any remaining funds donated as pledges to support small organisations in the early years or caring professions. Employee engagement and two-way communication is encouraged across the business. During 2022 we increased the visibility of the Executive Board across all the sites with bi-annual face to face team briefings with dedicated Board sponsors at each site. This was in addition to the regular CEO updates broadcast across the business.

93% OF OUR DRIVERS ARE DIRECTLY EMPLOYED

Whistl is a people business, and we believe it is crucial to invest in our employees to ensure that we provide the best possible service to our customers.

Whistl Annual Report 2022

In 2022 we again achieved the Investors in People ‘We invest in people’, standard accreditation which lasts three years and now incorporates all our acquisitions. Our Be You initiative is to encourage everyone across the business to be themself at work and to make the most of their talents. This is a statement about how we want people to feel about working at Whistl. In addition to developing this, the EDI forum also has the following commitments now underway:

Employee Forum During 2022 we listened to our employees through feedback to their representatives combined with comments received from our engagement survey. As a result, a key focus was making sure that the new Marlow Head Office offered the facilities requested by employees such as an onsite canteen and more social spaces. Investors in People (IIP) In 2022 we again achieved the Investors in People ‘We invest in people’, standard accreditation which lasts three years and now incorporates all our acquisitions. The accreditation means that, across Whistl, the principles and practices around supporting people are in place and understood by everyone. Also, that there is wide understanding of how to use them to make work better.

• Training on EDI for Line Managers

‘ASK ALISTAIR’ GIVES EMPLOYEES ACCESS TO THE COO VIA E-MAIL OR THE INTRANET

• EDI section in the employee newsletter, The Whistler, which is distributed monthly to all sites

• EDI Allies to partner with sites

We measure our employee engagement through MySay, our annual employee survey, run by an independent company. In 2023 we had a 73% response rate and our engagement rate continues to be strong at 67%, exceeding the industry benchmark.

• Review new job descriptions from an EDI perspective • Review management capability framework from a wellbeing and EDI perspective

• Dedicated EDI page on the intranet

In response to the feedback in 2022, we:

• Publication of Inclusion Calendar

• Designed a mandatory People Manager training workshop to be delivered in 2023 with excellent sign up and attendance rates so far across all business areas • Introduced the Whistl Hardship fund to help support employees with the current cost of living crisis • Created an ‘Ask Alistair’ inbox for employees to send through their questions directly to the COO • Created four Focus Groups based on the priority areas identified from the survey which were facilitated by BoM and Executive Board members listening to feedback from representatives from across all business areas. Topics covered Leadership, Equality, Diversity and Inclusion, Reward & Recognition and ‘Listening to our under 35’s.’

Equality Diversity and Inclusion (EDI)

• Share gender pronoun options – these can be used at bottom of email signature or intranet profile. In the 2022 MySay survey employees were overall happy with Whistl in terms of EDI: 81% of responders said they can be themselves at work 74% said people at Whistl respect individual differences (e.g., cultures, working styles, backgrounds, ideas) 72% said we actively encourage equality, diversity and inclusion throughout the company.

In 2021 we launched an employee-led Equality, Diversity and Inclusion (EDI) Charter and set up a regular forum for 20 volunteer EDI Allies across the business to meet, share ideas and put in place strategies to deliver our commitment within the Charter.

The forum developed our EDI initiative statement

BE YOU

THIS IS A PLACE WHERE YOU CAN BE YOU AND MAKE THE MOST OF YOUR TALENTS

BEING YOU ENABLES US ALL TO BE BETTER

BEING YOU IS WHAT MAKES US A GREAT TEAM

BE YOU

Whistl Annual Report 2022

Strategic Report Our People continued

We also support the external initiatives Valuable 500, Race at Work Charter and Disability Confident and we are working towards the pledges and principles relating to these initiatives. In addition, EDI training continues to be mandatory for all people managers.

Key initiatives were:

• April – Be You campaign launched

• June – International Day Against Homophobia, Transphobia, and Biphobia • July – Awareness of the Valuable 500 and Disability Confident

• September – We want to hear from you

• November – World Menopause Day

Mental health and well being We are committed to the care and wellbeing of our employees, and this is underpinned by our ‘My Wellbeing’ initiative which covers a wide range of resources available to all employees.

Additional Benefits We use You at Work/Plus You to provide employees with preferential shopping and membership discounts across a wide range of goods and services across the UK. In the last 12 months we have also introduced Critical Illness cover and a Health Care plan that is available to all our employees. We thank our employees for staying with us by presenting an ‘Anniversary Card’ from Alistair Cochrane, Chief Operating Officer, along with a monetary ‘thank you’ to each individual at the 5, 10, 20 and 30 year service milestones. Gender Pay Gap Reporting From April 2018, companies with 250 or more employees are required to publish defined statistics on Gender Pay information. The Whistl Group is reporting in accordance with the requirements of the mandatory Regulations under The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, for the following four reporting business entities for the April 2022 reference period: Whistl UK Ltd (DSA & SSC), Whistl Fulfilment (Gateshead) Ltd., Whistl Fulfilment (Rushden) Ltd and Whistl Fulfilment (South West) Ltd.

We have trained Mental Health First Aiders across the business, and in conjunction with external organisations, we can help reduce the stigma of Mental Health by encouraging open and safe conversations.

Key milestones in the year

Flexible Working We recognise the need for all

Feb

Spot the Signs Do you know someone who may be struggling Tips for a better night sleep Stress Awareness Month Mental Health Awareness Week Pride Month Check Yourself (Cancer Awareness Month) Promotion of Physical Activity Suicide Prevention Month Financial Wellbeing and Mental Health First Aider

employees to be able to request flexible working if required, and we comply with all legislation in regard to the Children and Families Act 2014. Reward principles One of our key reward principles is to ensure pay is fair, equitable and competitive regardless of gender and bonuses are linked to company performance. Trade Union Representation and National Living Wage To ensure our workforce is fairly treated and represented, we have engaged with the trade union, Community, since January 2012. We continue to pay all employees above the National Living Wage.

March

April

May

June July

August

September

October

Promotion Movember

November

Whistl Annual Report 2022

WOMEN’S HOURLY RATE IS

Pay Gap The gender pay gap snapshot for each of our reporting entities:

Reporting company

Mean

Median

Whistl UK Ltd

0.3% Lower 11.7% Lower 19.2% Lower 3.1% Higher

4.9% Lower 8.4% Lower 18.7% Lower 1.4% Higher

Whistl Fulfilment (Gateshead) Ltd Whistl Fulfilment (Rushden) Ltd Whistl Fulfilment (South West) Ltd

Upper Quartile

Upper Middle Quartile Lower Middle Quartile

Lower Quartile

Reporting company

Females

Males

Females

Males

Females

Males

Females

Males

Whistl UK Ltd

29% 71% 27% 73% 30% 70% 31% 69% 26% 74% 48% 52% 62% 38% 41% 59% 27% 73% 30% 70% 73% 27% 72% 28% 47% 53% 42% 58% 34% 66% 46% 54%

Whistl Fulfilment (Gateshead) Ltd Whistl Fulfilment (Rushden) Ltd Whistl Fulfilment (South West) Ltd

WOMEN’S BONUS PAY IS

Bonus Gap Please see below the gender pay gap snapshot for each of our reporting entities: Bonus gap notes. • Whistl UK Ltd – the bonus gap and proportion figures are consistent with the prior reporting period. • Whistl Fulfilment (Gateshead) Ltd – the average figure is significantly influenced by sales commission earned, therefore for this reporting period we believe median is a more accurate reflection of the situation. With regard to the lower percentage of females receiving bonus, this is largely due to no bonus scheme being in place for our contact centre for the year and in the relevant bonus population the contact centre population is in the majority female; a bonus scheme was put in place for this population for Q4 2022 and this will flow through in next year’s reporting data. • Whistl Fulfilment (Rushden) Ltd – the average figure is higher than last year’s reporting figure and this change is influenced by the senior managers referenced in the pay gap notes receiving a group profit share bonus for FY2021 paid in March 2022. • Whistl Fulfilment (South West) Ltd – the average bonus gap figure is lower than the prior year’s report but the median has increased for this reporting period.

Reporting company

Mean

Median

Whistl UK Ltd

11.1% Higher 74.8% Higher 61.5% Lower 14.3% Lower

0% Lower 0% Lower 0% Lower 13% Lower

Whistl Fulfilment (Gateshead) Ltd Whistl Fulfilment (Rushden) Ltd Whistl Fulfilment (South West) Ltd

PROPORTION OF RELEVANT FEMALES AND MALES RECEIVING A BONUS

Reporting company

Females

Males

Whistl UK Ltd

86% 27% 52% 79%

84% 53% 49% 71%

Whistl Fulfilment (Gateshead) Ltd Whistl Fulfilment (Rushden) Ltd Whistl Fulfilment (South West) Ltd

Pay Quartiles The gender pay metric is influenced by the proportion of men and women in each pay quartile. The table above shows the percentage of men and women in each quarter of our pay profile by reporting company. Pay gap notes. • Whistl UK Ltd – the average pay gap has improved v 2021 and the median is slightly higher v last year, with both remaining under c5%. • Whistl Fulfilment (Gateshead) Ltd – both the average and median gaps have increased for this reporting period. The gap is influenced by a relatively flat organisation structure with more senior roles being held by males with long length of service. • Whistl Fulfilment (Rushden) Ltd – both the average and median gaps have increased for this reporting period. The gaps are due to a high proportion of women in frontline operational roles as seen in the lower middle and lower pay quartiles and 72% of our part-time employees in Rushden are female. We also have a small proportion of males in managerial roles who are employed by the entity but whose remit extends to other Fulfilment sites, locations, or regions. • Whistl Fulfilment (South West) Ltd – the pay gap is reversed in this reporting period with the female average and median hourly rate slightly higher than the male rates, but with the gender variance under c5%.

Whistl Annual Report 2022

Strategic Report Environment, Social and Governance (ESG)

1. Environment, Social and Governance (ESG) ESG strategy As part of our ESG strategy, we have conducted a double materiality assessment. This was an inclusive process involving engagement with our colleagues and with external stakeholders, including our customers, suppliers and carriers through interviews and surveys on 16 ESG topics. We have completed a business impact analysis and maturity assessment against the ESG topics which has given Whistl better insight to the issues that are most material to our stakeholders. We aim to have a completed ESG strategy, including KPIs and targets in 2023. Our ESG initiatives programme Whistl has an extensive ESG initiatives programme across procurement, fleet and facilities: Ethical and sustainable uniforms This year the focus has been on ethical and sustainable operational and driver uniforms as well as sourcing eco friendly consumables across the Whistl Group. At the end of 2022 Workwear Express became our new uniform supplier, adding recycled and sustainable fabric options to our uniform portfolio whilst continually seeking any new eco materials. Our ordering method allows on-demand requests and therefore lessens waste. In addition we have implemented a recycling process for old uniforms, to recycle and repurpose garments and save them from ending up in landfill. Our vehicles We have updated our commercial car fleet policy with a green fleet choice of electric or ultra-low emission. We have rolled out 13 electric vans across the network with a view to increasing this number in 2023 and beyond. In collaboration with our suppliers, our small van and HGV drivers have received extensive fuel efficiency driver training.

There is an imperative that all businesses, across all industries globally need to act now to reduce the adverse effects on the environment. During the year we took significant steps forward in this area. In line with our aim to be a sustainable business, not only financially but also within the environment and communities in which we operate, we appointed an ESG Lead within the business to drive forward our current activities and develop our road map to meet UK Government mandatory targets and expected best practice. Engagement with key stakeholders including clients, employees, local communities, environmental groups, regulators, business partners, suppliers, and our shareholders all form part of our ESG strategy. We are ambitious and committed to fight climate change and in 2022 we launched an ESG programme and partnered with Simply Sustainable, an award-winning sustainability and ESG consultant, to accelerate focus in the following areas:

Whistl initially deployed 9 Maxus eDeliver electric vehicles covering customers in the Bristol area with four vehicles and five for its Parcelhub brand. During the year we consolidated all the transport fleet across the Group under a new transport management system to better utilise the fleet, maximising loads and reducing mileage. We commenced a £12m investment fleet expansion and renewal programme with Euro VI compliant: I7 Peugeot Boxer 435 Vans; 26 18t and 17 26t rigid trucks; and 126 Renault T-Range Tractor Units. The strategy also covers both rollout of electric vehicle charging infrastructure across Whistl’s current 22 sites and the procurement of electric fleet. Group waste management Our partnership with Zest Recycle has seen 13 sites rolled out with a new waste management system that has seen 84% of recycled material. Following the results of the successful partnership between Whistl and Zest Recycle, we were shortlisted for a 2022 Award for Excellence in Recycling and Waste Management. In addition, we gained a Bronze award in the International Green Apple Awards and were nominated for the National Recycling Awards for Campaign of the Year. Supply chain At Whistl, we want to work with suppliers who share our values and help us deliver on our promises and commitments. We believe this is best achieved through the sharing of practice and information. In 2022 our Suppliers’ Day Conference focused on ESG and we launched our new supplier charter setting out how we expect suppliers to behave so that together we can achieve higher ESG standards in our supply chain. New products To help our customers achieve their net zero targets we have developed a Sustainable Mail guide for customers on how to achieve an eco-friendly mailing product covering the mail material and its recyclability.

ELECTRIC COLLECTION PARCELHUB IS TRIALLING EVs ACROSS THE EAST MIDLANDS

Whistl Annual Report 2022

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