Disclosure of inside information pursuant to Article 17 MAR

Deutsche Post AG raises guidance for 2020 based on preliminary Q3 2020 results.

Based on preliminary group results for the month of September and hence Q3 2020, management today has assessed the outlook for the remainder of the year.

The overall positive development of the group's businesses going out of Q2 has continued well through the third quarter. In September, typically an important month after summer, we have seen trading holding up very well and for Q3 2020 the EBIT performance is forming out as follows:

Preliminary group EBIT reached around EUR 1.37 billion in Q3 2020 (Q3 2019: EUR 942 million). This includes the effect of the one-time bonus of EUR 300 to each of the more than 500,000 employees of the group (c. EUR -170 million) as well as the one-time payment to P&P employees as part of the just concluded wage agreement in Germany (c. EUR -45 million).

Operating profit in Post & Parcel Germany was around EUR 320 million (Q3 2019: EUR 304 million) including the effects of the one-off payments of a total EUR 95 million.
The Express division managed to increase its EBIT in the third quarter to around EUR 750 million compared to previous year's Q3 of EUR 454 million. Operating profit in Global Forwarding, Freight stood at around EUR 155 million, clearly above previous year's Q3 with EUR 124 million.
EBIT at Supply Chain recovered and was at around EUR 110 million in the third quarter 2020 (Q3 2019: EUR 162 million). DHL eCommerce Solutions has seen a further acceleration of EBIT driven by strong B2C volumes in its markets and recorded a Q3 2020 EBIT of around EUR 75 million, clearly ahead of previous year's EBIT (Q3 2019: EUR 6 million). Corporate Functions recorded a result of around EUR -40 million, including a positive revaluation at StreetScooter of c. EUR 40 million. This is due to a better than expected development of the final production.

The overall positive business development is underpinned by an ongoing strong development of cash flow; free cash flow has significantly increased in the third quarter to more than EUR 1.0 billion (Q3 2019: EUR 507 million), resulting in a positive free cash flow of more than EUR 1.2 billion for the first nine month of 2020.

In light of the ongoing earnings momentum, management has decided to adjust the outlook for the full year 2020 as follows:

The reported group-EBIT is expected between EUR 4.1 billion and EUR 4.4 billion (previously EUR 3.5 billion - 3.8 billion). In anticipation of a very strong peak season - in particular for the e-commerce driven businesses - our strong focus in the fourth quarter will be on securing all resources needed to maintain a high quality service level. Achieving the upper end of the guidance will depend on whether the volume development in Q4 will allow for an efficient utilization of the networks.

The group continues to expect an EBIT of around EUR 1.5 billion for Post & Parcel Germany.
For its DHL divisions Deutsche Post DHL Group forecasts an EBIT between EUR 3.3 billion and EUR 3.6 billion (previously EUR 2.8 billion - 3.1 billion). Operating profit in Corporate Functions including StreetScooter related effects of EUR 350 million is now expected at around EUR -700 million (previously €-750 million). This includes negative effects of EUR 350 million as part of the already communicated and still valid cost of around EUR 400 million for the re-alignment of the StreetScooter activities. The remaining amount of around EUR 50 million will now be booked in 2021.

Gross capex (excluding leases) for the full year 2020 is still expected to be in total at around € 2.9 billion, free cash flow is now expected to be more than EUR 1.8 billion (previously around EUR 1,4bn). This includes all mentioned one-off effects and the already previously expected around EUR 300 million for the 777 renewal program in the Express intercontinental fleet.

The comprehensive disclosure for Q3 and the first 9 months of 2020 will be released on November 10th as planned.

Financial indicators:

Explanations on these financial indicators are available in the 2019 Deutsche Post DHL Group Annual Report (see page 14f) which is published on the company's website at the link below:

https://www.dpdhl.com/content/dam/dpdhl/en/media-center/investors/documents/annual-reports/DPDHL-2019-Annual-Report.pdf
 

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