07.08.2018
Deutsche Post AG DE0005552004
Deutsche Post AG: Deutsche Post DHL Group: Q2 EBIT in line with expectations
DGAP-Media / 07.08.2018 / 07:00
Deutsche Post DHL Group: Q2 EBIT in line with expectations
- Group revenue improves to more than EUR 15 billion in second quarter;
organic increase of 6.2%
- Profitability of DHL divisions considerably increased; program initiated
to improve performance at Post - eCommerce - Parcel
- Operating profit down year on year as expected, at EUR 747 million
- Adjusted 2018 targets and 2020 forecast confirmed
- CEO Frank Appel: "We are clear about our challenges and are implementing
the necessary measures"
Bonn, August 7, 2018: Deutsche Post DHL Group, the world's leading mail and
logistics company, increased its revenue by 1.4% to more than EUR 15 billion
in the second quarter of 2018. On a comparable basis, i.e. after adjusting
for currency effects and portfolio changes, revenue rose by 6.2%. This
development was primarily driven by significant gains at DHL Express and
Global Forwarding, Freight. Operating profit (EBIT) amounted to EUR 747
million, down by 11.2% against the record level of the prior-year period.
All of the DHL divisions reported EBIT increases, some significant. However,
earnings in the Post - eCommerce - Parcel division fell back as expected,
above all due to higher transport and staff costs. As reported at the
beginning of June, the Group has initiated a comprehensive program for PeP
to raise productivity and improve the division's cost situation. This led to
increased expenses and the recognition of first provisions in the second
quarter.
"The second-quarter results were in line with expectations. Our three DHL
divisions - Express, Global Forwarding, Freight and Supply Chain - performed
well. We are clear about the challenges that face us at Post - eCommerce -
Parcel and are implementing the measures for aligning the division toward
long-term profitable growth," said Frank Appel, CEO of Deutsche Post DHL
Group. "We are confident to reach our 2020 targets."
All in all, Deutsche Post DHL Group generated consolidated net profit after
non-controlling interests of EUR 516 million in the second quarter of 2018
(2017: EUR 602 million). The decline is mainly attributable to lower EBIT at
PeP. Basic earnings per share decreased accordingly to EUR 0.42 (2017: EUR
0.50).
Adjusted earnings forecast for 2018 and guidance for 2020 confirmed
Deutsche Post DHL Group still plans to increase operating profit to more
than EUR 5 billion by 2020. The PeP division is expected to contribute
around EUR 1.7 billion and the DHL divisions around EUR 3.7 billion to that
total. In view of the challenges at PeP, the Group adjusted its forecast for
the current financial year in June 2018. The company now expects to generate
EBIT of around EUR 3.2 billion for full-year 2018; the PeP division is set
to contribute around EUR 0.6 billion to that amount. Earnings in the DHL
divisions are expected to be unchanged at around EUR 3.0 billion. The
Corporate Functions result, which now also includes the activities of the
new board department Corporate Incubations, is expected to come in at EUR
-0.42 billion.
Capital expenditure and cash flow: Continued high investment for sustainable
growth
Deutsche Post DHL Group again made targeted investments during the second
quarter to further strengthen its foundation for long-term profitable
growth. The company invested a total of EUR 549 million across all four
divisions from April to June (2017: EUR 349 million). Investments focused on
initiatives including the announced renewal of the aircraft fleet used by
DHL Express, as well as the development of the domestic and international
parcel infrastructure and the expansion of production of the StreetScooter
electric vehicles. For full-year 2018, the Group projects an increase in
capital expenditure to approximately EUR 2.5 billion (2017: EUR 2.3
billion). In addition, the Group will recognize around EUR 200 million in
2018 for the debt-financed intercontinental fleet renewal at Express as
announced in May. In June, Deutsche Post DHL Group decided to purchase 14
new Boeing 777 freight aircraft.
Due to the continued high level of investment in growth areas, free cash
flow fell to EUR 288 million compared with EUR 385 million in the prior-year
quarter. Operating cash flow was up sharply to EUR 1.4 billion in the second
quarter of 2018 (2017: EUR 726 million). The increase was mainly due to the
transition to the new IFRS 16 accounting standard.
PeP: Strong revenue growth continues, with measures initiated to improve
profitability
The Post - eCommerce - Parcel division posted revenues of EUR 4.4 billion in
the second quarter of 2018, up 3.4% on the prior-year figure. Organic
revenue growth was 4.1%. The division's positive performance was primarily
attributable to revenue growth in the eCommerce - Parcel business unit.
Revenue rose by 9.3% at Parcel Germany, 13.3% at Parcel Europe and 7.6% at
eCommerce. This trend is another reflection of the Group's strong
positioning as a market and innovation leader in the dynamically growing
e-commerce market.
In the Post business unit, revenue decreased by 1.2% year on year to EUR 2.3
billion. The decline was mainly due to the ongoing structural volume
declines in the mail business.
Operating profit came to EUR 108 million in the PeP division in the second
quarter, compared with EUR 260 million in the previous year. Higher
transport and staff costs continued above all to drive the decline. To
address this trend and safeguard the EBIT growth forecast for the coming
years, the Group decided on a series of measures in June. The steps adopted
are specifically intended to improve productivity, reduce indirect costs and
drive active yield management in the Post and Parcel business. As part of
these initiatives, the company has also introduced an early retirement
program focusing on civil servants working in overhead areas. The Group has
earmarked restructuring costs of EUR 500 million for 2018, primarily for
this program. Of that figure, EUR 51 million were accounted for in the
second quarter. Deutsche Post DHL Group has moreover already invested EUR 10
million of the announced operating expenses figure of EUR 150 million to
improve productivity.
Frank Appel: "The booming e-commerce business remains the primary growth
driver for our German and international parcel businesses - here we continue
to see tremendous potential for profitable future growth. In the last years,
we have worked hard to expand our leading position in the competitive German
parcel market. In the next market development phase, we will focus more
closely on our prices and costs in both the Post and Parcel businesses in
order to translate the volume development into steadily rising earnings."
Express: Success story continues with record margin
In the second quarter, the Express division again continued the very good
revenue and earnings performance sustained over several years. Revenue rose
by 7.9% on the prior year to EUR 4.0 billion, on an organic basis revenue
climbed by even 12.1%. The upward trend was once again driven by solid
growth in the international time-definite (TDI) delivery business, where
daily volumes rose by 8.4% compared with the prior-year period.
The sustained growth in volumes will enable the division to utilize its
unique global express network even more efficiently. The division succeeded
in growing operating profit by 10.2% to EUR 517 million on the back of
strict yield management and continuous improvements in the network. The
operating margin improved to a record level of 12.8% (2017: 12.5%).
Global Forwarding, Freight: Further significant profitability improvement
The Global Forwarding, Freight division maintained the positive trend of
previous quarters during the second quarter of 2018. Divisional revenue was
up by 2.5% to EUR 3.7 billion, despite having taken a more selective
approach with regard to the profitability of certain contracts. Adjusted for
negative currency effects, revenue improved by an even more substantial
6.0%.
At the same time, the division was better able to pass on higher freight
market rates to its customers than in the first quarter. The measures
introduced to improve cost efficiency are also proving effective. As a
result, operating profit at Global Forwarding, Freight rose significantly by
56.7% to EUR 105 million.
Supply Chain: EBIT margin within the corridor targeted for 2020
Revenue in the Supply Chain division came in at EUR 3.2 billion in the
second quarter (2017: EUR 3.5 billion). The decline in revenue resulted from
negative currency effects, and portfolio effects in particular resulting
from the sale of UK subsidiary Williams Lea Tag in the fourth quarter of
2017. After adjusting for those factors, the division's revenue increased by
2.7%. With regards to new business generation, DHL Supply Chain concluded
additional contracts in a total volume of EUR 283 million with both new and
existing customers during the second quarter.
Operating profit improved by 3.2% to EUR 128 million. At 4.0%, the EBIT
margin for the second quarter was within the target corridor. The goal of
the optimization program is to increase the operating margin of 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: organic revenue growth of 6.3%
Group revenue for the first half of 2018 remained at the prior-year level,
coming in at EUR 29.8 billion (2017: EUR 29.7 billion). Adjusted for
currency losses, the sale of Williams Lea Tag and slight portfolio effects,
revenue was up by 6.3%. All four divisions contributed to the growth in
organic revenue. Operating profit was down 4.3% to EUR 1.7 billion, due
above all to higher costs and operational investments at Post - eCommerce -
Parcel. Consolidated net profit after non-controlling interests dropped 9.6%
to EUR 1.1 billion in the first six months (2017: EUR 1.2 billion). The
financial result was negatively impacted by higher interest for lease
liabilities. Basic earnings per share decreased accordingly, falling from
EUR 1.02 in the previous year to EUR 0.91.
- Ende -
Note to editors: An interview with CFO Melanie Kreis is available at
www.dpdhl.com. The Investor Webcast will be streamed from 2 p.m. on our
website.
Media contact
Deutsche Post DHL Group
Media Relations
Christina Neuffer
Phone.: +49 228 182-9944 [IMAGE]
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 connects people and markets and is an enabler of global trade. It
aspires to be the first choice for customers, employees and investors
worldwide. The Group contributes to the world through responsible business
practice, corporate citizenship and environmental activities. By the year
2050, Deutsche Post DHL Group aims to achieve zero emissions logistics.
Deutsche Post DHL Group is home to two strong brands: Deutsche Post is
Europe's leading postal service provider. DHL offers a comprehensive range
of international express, freight transport, and supply chain management
services, as well as e-commerce logistics solutions. Deutsche Post DHL Group
employs approximately 520,000 people in over 220 countries and territories
worldwide. The Group generated revenues of more than 60 billion Euros in
2017.
Die Post für Deutschland. The logistics company for the world.
Group financial highlights for the second quarter of 2018
in EUR millions Q2 Q2 Change
2017 2018 in %
Revenue 14,813 15,026 1.4
- of which international 10,484 10,541 0.5
Profit from operating activities (EBIT) 841 747 -11.2
Consolidated net profit1) 602 516 -14.3
Basic earnings per share (in EUR) 0.50 0.42 -16.0
Diluted earnings per share (in EUR) 0.49 0.41 -16.3
Divisional revenues in the second quarter of 2018
in EUR millions Q2 Share of total Q2 Share of Change
2017 revenues in % 2018 total in %
revenues in
%
Post - 4,267 28.8 4,410 29.3 3.4
eCommerce -
Parcel
Express 3,750 25.3 4,046 26.9 7.9
Global 3,612 24.4 3,702 24.6 2.5
Forwarding,
Freight
Supply Chain 3,515 23.7 3,212 21.4 -8.6
Corporate -331 n.a. -344 n.a. -3.9
Functions/Conso-
lidation
Group 14,813 100.0 15,026 100.0 1.4
Divisional EBIT in the second quarter of 2018
in EUR millions Q2 Q2 Change
2017 2018 in %
Post - eCommerce - Parcel 260 108 -58.5
DHL 661 750 13.5
- Express 469 517 10.2
- Global Forwarding, Freight 67 105 56.7
- Supply Chain 124 128 3.2
Corporate Functions/Consolidation -79 -111 -40.5
Group 841 747 -11.2
1) After non-controlling interests
Group financial highlights for the first half of 2018
in EUR millions H1 H1 Change
2017 2018 in %
Revenue 29,696 29,775 0.3
- of which international 20,793 20,592 -1.0
Profit from operating activities (EBIT) 1,726 1,652 -4.3
Consolidated net profit1) 1,235 1,116 -9.6
Basic earnings per share (in EUR) 1.02 0.91 -10.8
Diluted earnings per share (in EUR) 1.00 0.89 -11.0
Divisional revenues in the first half of 2018
in EUR millions H1 Share of total H1 Share of Change
2017 revenues in % 2018 total in %
revenues in
%
Post - 8,812 29.7 9,022 30.3 2.4
eCommerce -
Parcel
Express 7,345 24.7 7,818 26.3 6.4
Global 7,158 24.1 7,293 24.5 1.9
Forwarding,
Freight
Supply Chain 7,038 23.7 6,336 21.3 -10.0
Corporate -657 n.a. -694 n.a. -5.6
Functions/Conso-
lidation
Group 29,696 100.0 29,775 100.0 0.3
Divisional EBIT in the first half of 2018
in EUR millions H1 H1 Change
2017 2018 in %
Post - eCommerce - Parcel 685 499 -27.2
DHL 1,195 1,336 11.8
- Express 865 978 13.1
- Global Forwarding, Freight 107 175 63.6
- Supply Chain 223 183 -17.9
Corporate Functions/Consolidation -154 -183 -18.8
Group 1,726 1,652 -4.3
1) After non-controlling interests
End of Media Release
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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
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