03.08.2016
Deutsche Post AG DE0005552004
Deutsche Post AG: Deutsche Post DHL Group continues strong earnings trend in the second quarter
DGAP-Media / 03.08.2016 / 07:00
Deutsche Post DHL Group continues strong earnings trend in the second
quarter
- Group EBIT increases by 40.0% to EUR 752 million
- Guidance for full-year 2016 confirmed: operating profit forecast to
rise to between EUR 3.4 billion and EUR 3.7 billion
- CEO Frank Appel: "Having posted the strongest second quarter in our
company's history, we are well on track towards achieving our targets."
Bonn, August 3, 2016: Deutsche Post DHL Group, the world's leading mail and
logistics company, increased operating profit significantly in the second
quarter of 2016. Group EBIT climbed to EUR 752 million, or a 40.0% increase
over the prior-year period (2015: EUR 537 million). With this, the company
recorded its best ever second quarter, as the strong earnings momentum of
the preceding two quarters continued. Group revenue decreased by 3.5% to
EUR 14.2 billion between April and June 2016 (2015: EUR 14.7 billion). In
addition to negative currency effects and lower fuel surcharges, the
decline primarily reflects a change in the recognition of revenue generated
from a key customer contract in the Supply Chain division, which started in
the fourth quarter of 2015. Adjusted for the above effects, Group revenue
rose by 4.1% year on year.
"Our successful business performance and the strong increase in operating
profit we achieved in the second quarter demonstrate that we took the right
decisions and made the right investments in 2015, a year of transition, to
set the stage for improving our profitability this year and in the years to
come. Having posted the strongest second quarter in our history, we remain
well on track towards achieving our targets. Our Post - eCommerce - Parcel
division in particular contributed to the positive trend. PeP management is
continuously expanding the division's market-leading position through
future-oriented investments and trend-setting innovations," stated Frank
Appel, CEO of Deutsche Post DHL Group.
Outlook: Earnings forecast for 2016 and long-term objectives confirmed
Although global economic growth remains only moderate, the strategic
initiatives implemented in all four divisions are expected to significantly
increase EBIT performance for full-year 2016. Deutsche Post DHL Group
therefore re-confirms its full-year 2016 forecast for Group EBIT to be
between EUR 3.4 billion and EUR 3.7 billion.
The Group is also maintaining its targets beyond 2016: Deutsche Post DHL
Group continues to forecast an average increase in operating profit of more
than 8% annually during the period from 2013 to 2020 (CAGR).
Q2 2016: Profitability increases significantly
Although the moderate revenue development continues, both the Post -
eCommerce - Parcel (PeP) division and the DHL divisions contributed to the
substantial 40.0% increase in second-quarter Group EBIT to EUR 752 million
(2015: EUR 537 million). Operating profit at PeP improved to EUR 247
million (2015: EUR 75 million). The DHL divisions reported a combined
increase in EBIT of 10.5% to EUR 591 million (2015: EUR 535 million).
Express saw another strong EBIT increase of 11.7% to EUR 420 million.
Global Forwarding, Freight maintained the positive trend of the preceding
quarters with an EBIT increase of nearly 75%, from EUR 40 million to EUR 69
million. Operating profit at Supply Chain declined due to restructuring
costs with a decrease from EUR 119 million to EUR 102 million.
Thanks to the increase in operating profit and lower financing costs,
consolidated net profit improved by 66.0% to EUR 541 million in the second
quarter of 2016 (2015: EUR 326 million). Basic earnings per share saw a
similar increase, from EUR 0.27 in the previous year to EUR 0.45 in 2016.
Capital expenditure: Foundation for growth reinforced
Group capital expenditures rose by 8.3% to EUR 456 million in the second
quarter of 2016 (2015: EUR 421 million). Investments continued to focus on
positioning the Group for future profitable growth in all four divisions.
For example, Deutsche Post DHL Group made further progress in extending its
national and international parcel infrastructure and invested in the
production of its electric vehicles StreetScooter in addition to expanding
global and regional hubs in the Express division as well as modernizing and
expanding the aircraft fleet.
Cash flow: Strong performance impacted by pension provisions
The change in both operating cash flow and free cash flow in the second
quarter reflects the further funding of pension obligations, which led to a
cash outflow of EUR 1 billion in April 2016. The cash inflow from the
placement of two bonds is recognized under cash flow from financing
activities.
The cash outflow from pension funding led to a decrease in operating cash
flow to EUR -161 million in the second quarter (2015: EUR +266 million),
while free cash flow declined to EUR -600 million (2015: EUR +67
million). When this effect is excluded, the Group's cash flow performance
was very strong in the second quarter: On an adjusted basis, operating cash
flow was EUR 573 million higher than in the prior-year period at EUR 839
million, while adjusted free cash flow rose by EUR 333 million to EUR 400
million. The improvement reflects not just the significant improvement in
operating net profit, but also good performance in working capital
management.
Post - eCommerce - Parcel: Strong growth continues in the parcel business
Revenue in the Post - eCommerce - Parcel division increased by 7.8% to EUR
4.0 billion in the second quarter (2015: EUR 3.7 billion). In addition to
the postage stamp price increase implemented at the beginning of the year,
the division's positive performance was driven above all by volume and
revenue increases in the eCommerce - Parcel business unit. In addition, the
second quarter of 2016 included three more working days than the prior-year
period. The second quarter of 2015 was also impacted by the postal strike
in Germany.
Revenue in the eCommerce - Parcel business unit increased by 14.2% to EUR
1.7 billion. The increase was based on revenue gains of 15.3% for Parcel
Germany, 18.1% for Parcel Europe and 8.5% for eCommerce. The upward trend
shows how Deutsche Post DHL Group continues to benefit from positioning
itself successfully as a market and innovation leader in the high-growth e-
commerce segment. The company is expanding on its position by offering
services such as time-window delivery, which was recently expanded and is
now available throughout Germany.
Revenue in the Post business unit rose by 3.6% to EUR 2.33 billion (2015:
EUR 2.25 billion). This performance reflects the positive effect of the
additional working days and the increase in letter postage prices at the
beginning of the year, which more than offset the structural decline in
volumes in the Mail Communication and Dialogue Marketing segments.
In terms of operating profit, the PeP division registered its best second
quarter since 2008. EBIT climbed to EUR 247 million, up from EUR 75 million
in the prior-year period when operating profit had been reduced by around
EUR 100 million due to the postal strike in Germany. After adjusting for
this effect, EBIT improved by 41% compared with the second quarter of 2015.
This figure reflects not only the effect of the additional working days,
but also - and especially - the positive effects of revenue growth, which
was attributable to the increase in postage prices and sustainable growth
at eCommerce - Parcel.
The PeP-division entered the liberalized long-distance bus market in
October 2013. Within a short period of time it was able to become the
quality leader in the market with its Postbus service. However, the Postbus
service has not met the company's financial expectations sufficiently.
Therefore, the company has decided to withdraw from the market and has
agreed to a sale of its Postbus business to FlixMobility GmbH.
Following the positive ruling of the General Court of the European Union
(EGC) on a European Commission state aid decision from 2012, the Group
reclassified a total of EUR 378 million that had been paid into an escrow
account to current financial assets at the end of the second quarter. This
contributed to a decline in net debt to EUR 3.5 billion. The repayment,
which already took place, does not impact Group earnings.
Express: Success story continues with a new record margin
In the second quarter, the Express division again continued its very
positive revenue and earnings performance. Revenue rose by 2.0% to EUR 3.52
billion (2015: EUR 3.46 billion). Adjusted for negative currency effects
and lower fuel surcharges, the increase was 7.2%. This strong performance
was once again driven by solid growth in the international time-definite
(TDI) shipments business, where daily volumes rose by 8.2% in the second
quarter compared with the prior-year period. At the same time, Express
focused on disciplined yield management.
Divisional EBIT rose by 11.7% to EUR 420 million between April and June
2016 (2015: EUR 376 million), with negative currency effects preventing an
even greater increase. The operating margin further improved to an all-time
high of 11.9% (2015: 10.9%). This excellent margin performance was also
supported by the low reported revenue growth.
Global Forwarding, Freight: Additional improvement in operating profit
Revenue in the Global Forwarding, Freight division decreased by 9.3% to EUR
3.4 billion in the second quarter of 2016 (2015: EUR 3.8 billion). Adjusted
for negative currency effects and lower fuel surcharges, revenue declined
by 3.1%. Apart from the still weak market environment, the main reason for
the revenue decline was the division's selective market strategy.
Operating profit improved by 72.5% in the second quarter to EUR 69 million.
With this development, EBIT rose strongly for the third consecutive
quarter. The increase would have been even greater without the non-
recurring effects in the prior year quarter, including gains of EUR 99
million generated from the sale of shares in logistics firm Sinotrans. The
earnings trend shows that the measures initiated last year to sustainably
improve profitability at Global Forwarding, Freight are achieving positive
results.
Supply Chain: New business continues to perform well
Revenue in the Supply Chain division decreased by 12.5% to EUR 3.5 billion
in the second quarter (2015: EUR 4.0 billion). Adjusted for negative
currency effects, revenue declined by 8.1%. After additionally adjusting
for lower fuel surcharges and the effect of the change in revenue
recognition due to revised terms in the UK NHS contract, as announced in
2015, revenue increased by 4.4% over the previous year. Supply Chain
continued to generate additional new business. In the second quarter, the
division concluded additional contracts worth around EUR 296 million with
both new and existing customers.
Divisional EBIT declined by 14.3% to EUR 102 million in the period from
April to June (2015: EUR 119 million). The decrease was due to scheduled
restructuring costs of EUR 16 million as part of the division's
optimization program. The goal is to increase the margin in the Supply
Chain division to between 4% and 5% by 2020 by increasing standardization,
improving efficiency and better leveraging economies of scale in the global
business.
First half: Operating profit up sharply
Group revenue fell by 4.8% to EUR 28.1 billion in the first half of 2016
(2015: EUR 29.5 billion). Excluding the aforementioned negative factors,
Group revenue increased by 2.7% versus the prior-year period. Operating
profit of Deutsche Post DHL Group climbed by 29.3% to EUR 1.6 billion in
the first six months (2015: EUR 1.3 billion). As with revenue, the effects
described for second-quarter operating profit also impacted the first-half
figures. Consolidated net profit rose by 43.7% to EUR 1.2 billion in the
first six months of 2016 (2015: EUR 821 million). Basic earnings per share
increased to EUR 0.98 in line with the increase in profit.
- End -
Note to editors: An interview with CFO Larry Rosen can be found at
www.dpdhl.de. The Group's investor conference call will be webcast
beginning at 2 p.m. (CET).
Media contact
Deutsche Post DHL Group
Media Relations
Dan McGrath/Christina Neuffer
Phone: +49 228 182-9944
E-mail: [email protected]
On the Internet: www.dpdhl.com/press
Follow us: www.twitter.com/DeutschePostDHL
Deutsche Post DHL Group is the world's leading mail and logistics company.
The Group is focused on being the first choice for customers, employees and
investors in its core business activities worldwide. It makes a positive
contribution to the world by connecting people and enabling global trade
while being committed to responsible business practices and corporate
citizenship.
Deutsche Post DHL Group operates under two brands: Deutsche Post is
Europe's leading postal service provider. DHL is uniquely positioned in the
world's growth markets, with a comprehensive range of international
express, freight transportation, e-commerce and supply chain management
services.
Deutsche Post DHL Group employs approximately 500,000 employees in over 220
countries and territories worldwide. The Group generated revenues of more
than 59 billion Euros in 2015.
Die Post für Deutschland. The logistics company for the world.
Group financial highlights for the second quarter of 2016
in million Euros 2nd quarter 2nd quarter Change 2015 2016 in % Revenues 14,700 14,190 -3.5 - of which international 10,649 9,883 -7.2 Profit from operating 537 752 40.0 activities (EBIT) Consolidated net profit1) 326 541 66.0 Basic earnings per share 0.27 0.45 66.7 (in euros) Diluted earnings per 0.26 0.43 65.4 share (in euros)Divisional revenues in the second quarter of 2016 in million Euros 2nd Share of 2nd Share of Change quarter total quarter total in % 2015 revenues 2016 revenues Post - eCommerce 3,712 25.3% 4,000 28.2% 7.8 - Parcel Express 3,455 23.5% 3,523 24.8% 2.0 Global 3,778 25.7% 3,425 24.1% -9.3 Forwarding, Freight Supply Chain 4,045 27.5% 3,541 25.0% -12.5 Corporate -290 k.A. -299 k.A. -3.1 Center / Other and consolidation Group 14,700 100% 14,190 100% -3.5Divisional EBIT in the second quarter of 2016 in million Euros 2nd quarter 2nd quarter Change 2015 2016 in % Post - eCommerce - Parcel 75 247 >100 DHL 535 591 10.5 - Express 376 420 11.7 - Global Forwarding, 40 69 72.5 Freight - Supply Chain 119 102 -14.3 Corporate Center / Other -73 -86 -17.8 and consolidation Group 537 752 40.01) After non-controlling interests. Group financial highlights in the first half of 2016 in million Euros 1st half of 1st half of Change 2015 2016 in % Revenues 29,467 28,062 -4.8 - of which international 20,969 19,275 -8.1 Profit from operating 1,257 1,625 29.3 activities (EBIT) Consolidated net profit1) 821 1,180 43.7 Basic earnings per share 0.68 0.98 44.1 (in euros) Diluted earnings per 0.65 0.94 44.6 share (in euros)Divisional revenues in the first half of 2016 in million Euros 1st half Share of 1st half Share of Change of total of total in % 2015 revenues 2016 revenues Post - eCommerce 7,813 26.5 8,201 29.2 5.0 - Parcel Express 6,695 22.7 6,774 24.1 1.2 Global 7,567 25.7 6,752 24.1 -10.8 Forwarding, Freight Supply Chain 7,987 27.1 6,934 24.7 -13.2 Corporate -595 k.A. -599 k.A. -0.7 Center / Other and consolidation Group 29,467 100% 28,062 100% -4.8Divisional EBIT in the first half of 2016 in million Euros 1st half of 1st half of Change 2015 2016 in % Post - eCommerce - Parcel 474 659 39.0 DHL 937 1,125 20.1 - Express 708 777 9.7 - Global Forwarding, 57 120 >100 Freight - Supply Chain 172 229 33.1 Corporate Center / Other -154 -160 -3.9 and consolidation Group 1,257 1,625 29.31) After non-controlling interests. End of Media Release --------------------------------------------------------------------------- Issuer: Deutsche Post AG Key word(s): Enterprise 03.08.2016 Dissemination of a Press Release, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at 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.dpdhl.com ISIN: DE0005552004 WKN: 555200 Indices: DAX Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Hanover, Munich, Stuttgart; Regulated Unofficial Market in Tradegate Exchange End of News DGAP Media --------------------------------------------------------------------------- 488783 03.08.2016
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