05.08.2014
Deutsche Post AG DE0005552004
DGAP-News: Deutsche Post DHL boosts revenues and earnings in Q2
DGAP-News: Deutsche Post AG / Key word(s): Quarter Results/Half Year
Results
Deutsche Post DHL boosts revenues and earnings in Q2
05.08.2014 / 07:00
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Deutsche Post DHL boosts revenues and earnings in Q2
- EBIT up strongly to EUR 654 million in the second quarter
- Full-year guidance for 2014 confirmed; EBIT outlook for 2015 modified
- Specific earnings targets for 2016 introduced for the first time: EBIT
expected to reach EUR 3.4 billion to EUR 3.7 billion
- CEO Frank Appel: "We remain focussed on long-term success"
Bonn, August 5, 2014: Deutsche Post DHL, the world's leading postal and
logistics group, boosted revenues in the second quarter of 2014 and
generated a strong increase in profitability. Between April and June,
revenues totaled EUR 13.7 billion, nearly 1 percent above the previous
year's level. Adjusted for negative exchange-rate effects and other
inorganic factors, revenues rose more than 4 percent, fueled by organic
increases in revenue in all four of the company's divisions. This result
reflects the strong position maintained by the Group and its divisions in
rapidly growing market segments and regions. The Group's operating earnings
rose by nearly 6 percent to EUR 654 million in the second quarter. Adjusted
for various non-recurring factors in the previous year's figure, EBIT
climbed by nearly 11 percent. Consolidated net profit also rose sharply,
increasing by more than 9 percent to EUR 461 million.
"The company's successful performance in the second quarter is a further
demonstration of our Group's fundamental strength," said Frank Appel, the
CEO of Deutsche Post DHL. "We have both a high-potential business base and
the ability to generate reliable gains in revenues and earnings even under
challenging business conditions. With our double-digit increase in EBIT, we
demonstrated these two strengths during the past quarter."
Outlook: Earnings guidance adjusted
For the remainder of 2014, the Group expects only slight improvement in the
global economic environment. Nonetheless, the company believes that the
positive earnings trend will continue and that consolidated EBIT will rise
to between EUR 2.9 billion and EUR 3.1 billion. However, the company
adjusted its expectations regarding the EBIT contributions to be made by
the respective divisions: The Group now estimates that the Post - eCommerce
- Parcel (PeP) division will contribute an additional EUR 100 million to
earnings following its good operating performance in the first half of the
year. As a result, the division's total EBIT contribution in 2014 is now
expected to be around EUR 1.3 billion. Due to a challenging market
environment for the GLOBAL FORWARDING, FREIGHT division together with
higher investments for that division's transformation program (New
Forwarding Environment - NFE) the Group now expects operating earnings in
the DHL divisions will rise to between EUR 2.0 billion and EUR 2.2 billion.
Previously, the company had assumed that the DHL EBIT would increase to
between EUR 2.1 billion and EUR 2.3 billion. As previously announced,
Corporate Center/Other expenses are expected to fall below EUR 400 million
in 2014. The Group also remains committed to its goal of at least covering
the dividend paid in May for financial year 2013 from this year's free cash
flow.
Deutsche Post DHL expects to generate further earnings growth beyond the
current year. Between 2013 and 2020, the company expects earnings growth of
more than 8 percent per year on average for the Group. The DHL divisions
are expected to continue to be the main contributor to the company's
revenue growth and to the anticipated strong increase in profitability,
with an annual average EBIT growth of approximately 10 percent per year. 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 by 2020.
To achieve these long-term targets and to further bolster the divisions'
exceptional position in global growth markets, the Group will make further
investments in 2014 and 2015. The focal points are the NFE program in the
GLOBAL FORWARDING, FREIGHT division and the continued organizational and
contract mix optimization of the SUPPLY CHAIN division. The non-recurring
expenses related to these efforts will have a one-time negative impact on
the company's operating earnings primarily in 2015. Nonetheless, the Group
still expects to generate a significant EBIT increase next year. Once the
non-recurring expenses for the structural measures end, the expected
operating improvements should produce stronger and sustainable earnings
growth in 2016 and beyond. Since the company has not yet determined the
exact amount of the additional NFE investment as well as the project and
strategic restructuring measures at SUPPLY CHAIN, the Group has consciously
decided to refrain from providing a specific guidance for 2015. For 2016,
in the absence of the non-recurring costs, the company now expects a higher
Group EBIT of EUR 3.4 billion to EUR 3.7 billion. The DHL divisions should
contribute EUR 2.45 billion to EUR 2.75 billion of this total, and the PeP
division is expected to generate EBIT of more than EUR 1.3 billion in 2016.
As previously announced, Corporate Center/Other expenses should be lowered
to about EUR 350 million by the end of 2015 and kept at this level in 2016.
"With the 'Strategy 2020' announced in April, we laid the foundation to
enable us to continue to profitably and sustainably expand our business in
future years," Frank Appel said. "To reach our goal of defining all aspects
of the logistics industry by 2020, we intend to build on our strengths and
forge ahead in the key initiatives announced. For this reason, we are
investing in the continued optimization of our divisions and will remain
focused not on the Group's short-term profitability, but on its long-term
and sustainable success. The identified measures will make an important
contribution to our strategy and will do much to help us become the driving
force in the industry."
Second quarter 2014: EBIT rises strongly
Revenue rose by nearly EUR 100 million to EUR 13.7 billion in the second
quarter of 2014, compared with EUR 13.6 billion in the same period last
year. Adjusted for exchange-rate and other inorganic factors, revenues rose
by around EUR 570 million. Consolidated EBIT, which was also significantly
impacted by negative exchange-rate effects, rose from EUR 619 million in
2013 to EUR 654 million this year. Adjusted for non-recurring factors such
as the utilization of provisions in the PeP division and minor company
disposals at SUPPLY CHAIN that, in total, had a net positive impact on
earnings last year, EBIT climbed by nearly 11 percent. The EXPRESS division
was the main driver of the Group's improved profitability with a strong
double-digit percentage gain in operating earnings. With the non-recurrence
of a positive one-time effect from the second quarter last year, the
financial result declined from minus EUR 40 million in 2013 to minus EUR 95
million this year. Fueled by the Group's increased operating earnings power
as well as lower tax expenses resulting from a reduction in the expected
tax rate for the full year, net profit for the second quarter rose to EUR
461 million (2013: EUR 422 million). This corresponds to a rise in basic
earnings per share from EUR 0.35 last year to EUR 0.38 in the second
quarter of 2014.
Capital expenditures and cash flow: Foundation of growth reinforced once
again
In the second quarter, the Group's capital expenditures rose from EUR 280
million last year to EUR 335 million in 2014. The DHL divisions remained
the focal point of these capital expenditures. With their investments in
network expansion, air fleet maintenance, state-of-the-art warehouses and
the new Global Forwarding infrastructure, these divisions have further
strengthened the foundation for planned growth. In the PeP division,
capital expenditures were primarily used to further upgrade the parcel
infrastructure. In the second quarter, the Group's free cash flow fell
slightly from EUR 235 million in 2013 to EUR 208 million in the ongoing
financial year. The Group's net debt totaled EUR 2.9 billion at the end of
the second quarter of 2014. Compared with the end of 2013, this figure
reflects a seasonally typical rise, which totaled EUR 1.4 billion this
year. The major reasons for this increase were the dividend paid in May
(EUR 968 million) and the annual prepayment for civil service pensions to
the German Federal Post and Telecommunications Agency (EUR 535 million).
First six months: Revenue and earnings growth continues
In the first half of the year, Group revenues totaled EUR 27.3 billion,
about EUR 250 million above the previous year's level (2013: EUR 27.0
billion). Adjusted for negative exchange-rate and other inorganic effects,
revenues rose by 4.8 percent, or nearly EUR 1.3 billion, in the first six
months. Compared with the first half of 2013, operating earnings increased
by 3.8 percent to EUR 1.4 billion (2013: EUR 1.3 billion). The one-time
factors described in the quarterly results also affected the figures for
the first half of the year. Adjusted for these factors, consolidated EBIT
rose by 6 percent between January and June 2014. During the six-month
period this year, consolidated net profit increased by nearly 5 percent,
climbing from EUR 920 million in 2013 to EUR 963 million in the current
financial year. Basic earnings per share rose from EUR 0.76 last year to
EUR 0.80 in 2014.
Post - eCommerce - Parcel division: Adjusted EBIT at prior year's level
Revenues in the Post - eCommerce - Parcel division remained unchanged at
EUR 3.6 billion between April and June 2014 (2013: EUR 3.6 billion),
despite one work day less than in the prior-year period. The work-day
effect was offset by the higher postal rates introduced at the beginning of
the year and, above all, by volume and revenue gains generated by the
eCommerce - Parcel segment. The company systematically addresses the
steadily growing opportunities created by online retailing - in Germany
and, increasingly, in other countries - by continuously developing new,
innovative products and delivery services. Operating profit in the PeP
division fell to EUR 188 million in the second quarter of 2014 (2013: EUR
238 million). The prior-year figure had benefited from the utilization of
EUR 50 million of the provision recognized for postage stamps. Adjusted for
this effect, operating earnings in the PeP division remained at the
previous year's level. Higher material and staff costs as well as increased
expenses for the expansion of the parcel infrastructure prevented an even
better performance.
EXPRESS division: Operating margin at record level
The EXPRESS division continued its very successful revenue and earnings
performance in the second quarter of 2014. Between April and June, reported
revenues rose from EUR 3.0 billion in 2013 to EUR 3.1 billion this year.
Adjusted for inorganic effects and substantial negative exchange-rate
effects, revenues climbed more than 7 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
solid gains achieved in all regions. In particular, the double-digit
percentage TDI volume increases in the Asia Pacific, Middle East and Africa
as well as the Americas regions underscored DHL EXPRESS's exceptional
market position in emerging markets. The division's EBIT rose during the
second quarter of 2014 by nearly 18 percent, or EUR 50 million, to EUR 332
million (2013: EUR 282 million). In addition to higher revenues, key
reasons for the division's profitability gain were increased operating
profitability of the network and the systematic management of indirect
costs. The profitability gain was also reflected in an improvement of the
operating margin by 130 basis points to an all-time high of 10.7 percent.
GLOBAL FORWARDING, FREIGHT division: volume growth
In the GLOBAL FORWARDING, FREIGHT division, revenues fell by 1.9 percent to
EUR 3.6 billion during the second quarter of 2014 amid persistently
challenging business conditions (2013: EUR 3.7 billion). Adjusted for
negative exchange-rate effects, revenues rose by more than 2 percent. As a
result of increasing demand in Asia and continued success in new business
with existing and new customers, volume in both ocean and air freight rose
between April and June. Nonetheless, the division's EBIT declined from EUR
127 million in the second quarter of 2013 to EUR 100 million in 2014. The
major cause of this decrease was continued lower gross profit margins.
SUPPLY CHAIN division: Revenues and earnings climb
At SUPPLY CHAIN, revenues rose in the second quarter of 2014 by 2.3 percent
to EUR 3.6 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 6
percent or EUR 200 million. This growth was fueled by strong gains in
emerging markets and in the Automotive and Life Sciences & Healthcare
sectors. The volume of new contracts concluded with new and existing
customers totaled EUR 335 million in the second quarter of 2014, roughly
the same level as in the last two years. This performance underscored the
continued success of the SUPPLY CHAIN division. The division's operating
earnings totaled EUR 109 million in the second quarter of 2014, an increase
of nearly 40 percent over the previous year's level (2013: EUR 79 million).
The sharp increase reflects the absence of one-time expenses related to
business disposals and restructuring expenditures that had a negative
impact on the previous year's result. Adjusted for these factors, operating
earnings still rose substantially by about 9 percent between April and June
2014.
- End -
Group financial highlights for the second quarter of 20141)
2nd quarter 2nd quarter Change in million euros 2013 2014 in % Revenues 13,605 13,695 0.7% - of which international 9,532 9,637 1.1% Profit from operating activities 619 654 5.7% (EBIT) Consolidated net profit2) 422 461 9.2% Basic earnings per share (in 0.35 0.38 8.6% euros) Diluted earnings per share (in 0.33 0.37 12.1% euros)Divisional revenues in the second quarter of 20141) Share of Share of 2nd quarter total 2nd quarter total Change in million euros 2013 revenues 2014 revenues in % Post - eCommerce 3,642 26.8% 3,642 26.6% 0.0% - Parcel EXPRESS 3,015 22.2% 3,089 22.6% 2.5% GLOBAL 3,709 27.3% 3,638 26.6% -1.9% FORWARDING, FREIGHT SUPPLY CHAIN 3,537 26.0% 3,618 26.4% 2.3% Corporate Center -298 n/a -292 n/a 2.0% / Other and consolidation Group 13,605 100% 13,695 100% 0.7%Divisional EBIT in the second quarter of 20141) Change in million euros 2nd quarter 2013 2nd quarter 2014 in % Post - eCommerce - Parcel 238 188 -21.0% DHL 488 540 10.7% - EXPRESS 282 332 17.7% - GLOBAL FORWARDING, FREIGHT 127 100 -21.3% - SUPPLY CHAIN 79 109 38.0% Corporate Center / Other and -107 -75 29.9% consolidation Group 619 654 5.7%1) Prior-year amounts adjusted. 2) After non-controlling interests. Group financial highlights in the first half of 20141) 1st half of 1st half of Change in million euros 2013 2014 in % Revenues 27,008 27,264 0.9% - of which international 18,690 18,842 0.8% Profit from operating activities 1,329 1,380 3.8% (EBIT) Consolidated net profit2) 920 963 4.7% Basic earnings per share (in 0.76 0.80 5.3% euros) Diluted earnings per share (in 0.73 0.77 5,5% euros)Divisional revenues in the first half of 20141) Share of Share of First 1st half of total half of total Change in million euros 2013 revenues 2014 revenues in % Post - eCommerce - 7,465 27.6% 7,602 27.9% 1.8% Parcel EXPRESS 5,828 21.6% 5,968 21.9% 2.4% GLOBAL FORWARDING, 7,311 27.1% 7,161 26.3% -2.1% FREIGHT SUPPLY CHAIN 7,009 26.0% 7,124 26.1% 1.6% Corporate Center / -605 n/a -591 n/a 2.3% Other and consolidation Consolidated 27,008 100% 27,264 100% 0.9% revenuesDivisional EBIT in the first half of 20141) Change in million euros 1st half of 2013 1st half of 2014 in % Post - eCommerce - Parcel 635 585 -7.9% DHL 900 949 5.4% - EXPRESS 523 607 16.1% - GLOBAL FORWARDING, FREIGHT 214 149 -30.4% - SUPPLY CHAIN 162 193 19.1% Corporate Center / Other and -205 -154 24.9% consolidation Consolidated EBIT 1,329 1,380 3.8%1) Prior-year amounts adjusted. 2) After non-controlling interests. --------------------------------------------------------------------- 05.08.2014 Dissemination of a Corporate News, 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. 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 --------------------------------------------------------------------- 280715 05.08.2014
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