15.05.2014
Deutsche Post AG DE0005552004
DGAP-News: Deutsche Post DHL boosts revenues and earnings in the first quarter of 2014
DGAP-News: Deutsche Post AG / Key word(s): Quarter Results
Deutsche Post DHL boosts revenues and earnings in the first quarter of
2014
15.05.2014 / 07:00
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Deutsche Post DHL boosts revenues and earnings in the first quarter of 2014
- Group revenues climbed to EUR 13.6 billion
- EBIT increased to EUR 726 million in the first quarter
- Full-year guidance for 2014 confirmed: EBIT expected to reach between
EUR 2.9 billion and EUR 3.1 billion
- CEO Frank Appel: "A good start in the new year"
Bonn, May 15, 2014: Deutsche Post DHL, the world's leading postal and
logistics group, continued to boost revenues and earnings in the first
quarter of 2014. At nearly EUR 13.6 billion, revenues generated in the
first three months of the current year rose more than 1 percent above the
previous year's level. Adjusted for negative exchange-rate effects and
other inorganic factors, the revenue increase would have been more than 5
percent. This growth is an expression of the strong position held by the
Group and its divisions in the world's growth markets. As a result of this
position, adjusted revenues climbed in all four divisions. The company also
continued to improve operating earnings: In the first quarter of 2014,
consolidated EBIT increased by more than 2 percent to EUR 726 million. The
company's consolidated net profit also rose during the first quarter of the
year and totaled EUR 502 million, a slight increase over the previous
year's level.
"We performed well in the first quarter," said Frank Appel, the CEO of
Deutsche Post DHL. "Despite negative exchange-rate effects and the
continued sluggish global economy, we once again generated profitable
growth. We got off to a good start in 2014, in line with our expectations
and market circumstances. Because we strive for and achieve continuous
improvement, we have been able to consistently deliver what we have
promised to our customers and investors even when facing sub-optimal
business conditions."
Outlook: Earnings guidance confirmed
For the full year 2014, the Group expects only slight improvement in the
global economic environment. Nonetheless, the company still believes that
its positive earnings trend will continue and that Group EBIT will rise to
between EUR 2.9 billion and EUR 3.1 billion in 2014. While the newly
created Post - eCommerce - Parcel division (PeP, formerly MAIL) is
anticipated to contribute about EUR 1.2 billion to this total, the DHL
divisions should continue to grow earnings and generate an EBIT of between
EUR 2.1 billion and EUR 2.3 billion for the year. In addition, the Group
plans to reduce Corporate Center/Other expenses to below EUR 400 million in
2014. Furthermore, the company expects to again generate sufficient free
cash flow to cover this year's dividend for financial year 2013.
The Group also expects that earnings will continue to grow beyond the
current year. For the period 2013 to 2020, the Group expects earnings
growth of more than 8 percent per year on average based on the 2013 EBIT of
EUR 2.86 billion. The 2015 EBIT target of between EUR 3.35 billion and EUR
3.55 billion remains unchanged. The DHL divisions are expected to continue
to be the main contributor to the Group's revenue and profitability growth,
with an annual average EBIT growth of approximately 10 percent per year
over the period. At the same time the PeP division is forecast to increase
operating earnings by an average of around 3 percent each year.
Furthermore, the Group expects to reduce Corporate Center/Other expenses to
below 0.5 percent of Group revenues until 2020.
First quarter 2014: Profitability improved
Revenues generated in the first quarter of 2014 totaled EUR 13.6 billion
compared with EUR 13.4 billion in the previous year. Adjusted for
exchange-rate and other inorganic effects, revenues rose by more than EUR
700 million. The Group's EBIT, which was also significantly impacted by
negative exchange-rate effects, rose by more than EUR 15 million to EUR 726
million (2013: EUR 710 million). The EXPRESS division was the main driver
of the Group's improved profitability as it produced a considerable
double-digit percentage gain in operating earnings. The company's financial
result fell from minus EUR 43 million in the first quarter of 2013 to minus
EUR 79 million this year. The previous year's figure included interest
income from the reversal of a tax provision. Fueled by the Group's growing
operating earnings power and lower tax expenses, net profit for the first
quarter increased slightly to EUR 502 million (2013: EUR 498 million). This
corresponds to an increase in basic earnings per share from EUR 0.41 last
year to EUR 0.42 in the first quarter of 2014.
Capital expenditures: Foundation of growth reinforced once again
The Group's capital expenditures totaled EUR 176 million in the first
quarter of 2014 (2013: EUR 215 million). In the DHL divisions - which
remained the focal point of the Group's capital expenditures - the platform
for further profitable growth in the logistics business was reinforced by
investments in network expansion, air-fleet maintenance, state-of-the-art
warehouses and the new Global Forwarding IT infrastructure. In the PeP
division, significant investments were made in the expansion of the parcel
infrastructure.
Cash flow: Typical seasonal performance
At minus EUR 349 million (2013: minus EUR 136 million), free cash flow
reflected typical seasonal factors in the first quarter of 2014: At the
beginning of each year, the annual payment for civil service pensions that
the company makes to the German Federal Post and Telecommunications Agency
impacts the company's cash flow development. This year, the payment totaled
EUR 535 million. The decline in free cash flow from the previous year's
level was mainly due to timing effects as some of the investments recorded
at the end of last year only resulted in a cash outflow in the first
quarter of 2014. The Group's net debt totaled EUR 1.9 billion at the end of
the quarter. This represented a typically seasonal rise of EUR 417 million
compared with the end of 2013. Thanks to the company's ability to generate
cash in the past 12 months, the Group's net debt was reduced by about EUR
350 million compared to the level at the end of the first quarter of 2013.
Post - eCommerce - Parcel division: Continued strong growth in the German
parcel business
During the first quarter of 2014, revenues in the Post - eCommerce - Parcel
division rose by 3.6 percent to EUR 4 billion (2013: EUR 3.8 billion).
After parts of the domestic parcel business outside Germany were
transferred to the Post - eCommerce - Parcel division at the beginning of
the year, figures for the current as well as the previous year were
adjusted. The revenue growth generated in the first quarter of 2014
resulted in part from a slight increase in working days, higher postal
rates introduced at the beginning of the year and additional volume related
to the switch to SEPA. However, the main driver of growth remained the
ongoing strong volume and revenue improvements produced by the German
parcel business. Here, the company continued to profit from its strong
market position and its innovative eCommerce-related delivery services.
Operating earnings generated by the PeP division in the first quarter
totaled EUR 398 million, roughly the same level as during the previous
year's quarter (2013: EUR 397 million). The rise in revenues was offset by
higher material and labor costs and increased spending on the expansion of
the parcel infrastructure.
EXPRESS division: International express business grows strongly
The EXPRESS division continued to generate significant gains in revenues
and earnings. Reported revenues climbed in the first three months of the
year from EUR 2.8 billion in 2013 to EUR 2.9 billion this year. Adjusted
for inorganic factors and substantial negative exchange-rate effects,
revenues increased by more than 8 percent. Once again, strong growth in the
division's international time-definite shipments was the main factor
fueling this revenue improvement. This positive trend is the result of the
significant gains achieved in all regions. In particular, the double-digit
percentage volume increases in the Asia Pacific and Middle East and Africa
regions underscored DHL EXPRESS' exceptional market position in emerging
markets. In the first quarter of 2014, the division's EBIT climbed by more
than 14 percent to EUR 275 million (2013: EUR 241 million). In addition to
increased revenues, efficiency gains in aviation and ground operations
played a significant role in the profitability improvement. This increase
was also reflected in the higher operating margin, which rose by 100 basis
points to 9.6 percent.
GLOBAL FORWARDING, FREIGHT division: Growth in ocean freight
In a business environment that remains challenging, revenues generated by
the GLOBAL FORWARDING, FREIGHT division fell in the first quarter of 2014
by 2.2 percent to EUR 3.5 billion (2013: EUR 3.6 billion). Adjusted for
negative exchange-rate effects, however, revenues rose by 2.5 percent.
Volumes and revenues in the air-freight business remained at the previous
year's level primarily because of weak demand from some major customers in
the Technology and Engineering & Manufacturing sectors. At the same time,
volumes and revenues in ocean freight climbed thanks to new business wins
at the beginning of the year. Nonetheless, the division's first-quarter
EBIT fell from EUR 87 million last year to EUR 48 million in 2014. The main
cause of this decline was the planned rise in expenses for the division's
new IT infrastructure and general margin pressure.
SUPPLY CHAIN division: Higher revenues
At DHL SUPPLY CHAIN, revenues rose slightly in the first quarter of 2014 to
EUR 3.5 billion (2013: EUR 3.5 billion). Adjusted for negative
exchange-rate effects and last year's disposal of subsidiaries that were
not part of the company's core business, revenues climbed by nearly 7
percent or more than EUR 200 million in the first quarter. This growth was
fueled by strong gains in emerging markets as well as in the Life Sciences
& Healthcare and Automotive sectors. The volume of new contracts concluded
with new and existing customers totaled EUR 175 million in the first
quarter, a level that was below the previous year's first quarter total.
This decline, however, resulted largely from the exceptionally high number
of contracts signed at the end of 2013. The annualized contract renewal
rate remained high and underscored the SUPPLY CHAIN division's ongoing
strong operational performance. At EUR 84 million, the division's EBIT in
the first quarter of 2014 stood on roughly the same level as in the prior
year's quarter (2013: EUR 83 million). Operating earnings were negatively
impacted by Europe's sluggish market conditions and start-up costs for new
business.
- End -
Group financial highlights for the first quarter of 20141)
First quarter First quarter Change in million euros 2013 2014 in % Revenues 13,403 13,569 1.2% - of which international 9,158 9,205 0.5% Profit from operating 710 726 2.3% activities (EBIT) Consolidated net profit 2) 498 502 0.8% Basic earnings per share (in 0.41 0.42 2.4% euros) Diluted earnings per share (in 0.40 0.40 0.0% euros)Divisional revenues in the first quarter of 20141) Share of Share of First total First total Change in million euros quarter 2013 revenues quarter 2014 revenues in % Post - eCommerce 3,815 28.5% 3,953 29.1% 3.6% - Parcel EXPRESS 2,813 21.0% 2,879 21.2% 2.3% GLOBAL 3,610 26.9% 3,529 26.0% -2.2% FORWARDING, FREIGHT SUPPLY CHAIN 3,472 25.9% 3,506 25.8% 1.0% Corporate Center -307 n/a -298 n/a 2.9% / Oher and consolidation Consolidated 13,403 100% 13,569 100% 1.2% revenuesDivisional EBIT in the first quarter of 20141) Change in million euros First quarter 2013 First quarter 2014 in % Post - eCommerce - Parcel 397 398 0.3% DHL 412 408 -1.0% - EXPRESS 241 275 14.1% - GLOBAL FORWARDING, FREIGHT 87 48 -44.8% - SUPPLY CHAIN 83 84 1.2% Corporate Center / Other and -98 -79 19.4% consolidation Consolidated EBIT 710 726 2.3%1) Prior-year amounts adjusted. 2) After non-controlling interests. End of Corporate News --------------------------------------------------------------------- 15.05.2014 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Deutsche Post AG Charles-de-Gaulle-Straße 20 53113 Bonn Germany Phone: +49 (0)228 182 - 63 100 Fax: +49 (0)228 182 - 63 199 E-mail: [email protected] Internet: www.dp-dhl.de ISIN: DE0005552004 WKN: 555200 Indices: DAX Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime Standard), Hamburg, Hannover, München, Stuttgart; Terminbörse EUREX End of News DGAP News-Service --------------------------------------------------------------------- 268533 15.05.2014
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