08.11.2016
Deutsche Post AG DE0005552004
Deutsche Post AG: Deutsche Post DHL Group significantly increases operating profit and confirms 2016 full-year guidance
DGAP-Media / 08.11.2016 / 07:00
Deutsche Post DHL Group significantly increases operating profit and
confirms 2016 full-year guidance
- Third-quarter Group EBIT improves to EUR 755 million (2015: EUR 197
million)
- Guidance for full-year 2016 confirmed: EBIT forecast to increase to
between EUR 3.4 billion and EUR 3.7 billion
- CEO Frank Appel: "We are successful despite weak economic tailwind"
Bonn, November 8, 2016: Deutsche Post DHL Group, the world's leading mail
and logistics company, increased operating profit significantly in the
third quarter of 2016, continuing the strong earnings momentum seen in
previous quarters. Group EBIT increased to EUR 755 million, representing
the strongest third quarter in company history . The sharp rise over the
prior year (2015: EUR 197 million) is attributable to sustained organic
growth in operating profit in all divisions in addition to the non-
recurrence of substantial one-time effects. Group revenue decreased by 3.9%
to EUR 13.9 billion between July and September 2016 (2015: EUR 14.4
billion). In addition to negative currency effects and lower fuel
surcharges due to falling oil prices, the decline reflects a change in the
recognition of revenue generated from a key customer contract in the Supply
Chain division, which took effect in the fourth quarter of 2015. Adjusted
for the above effects, Group revenue rose by 2.4% year on year.
"The strong trend in operating profit in all four divisions shows that we
have set the right priorities with our Strategy 2020. We are taking an
increasingly active role in the dynamic development of e-commerce all over
the world and are continuing to invest in this segment. Thanks to the
targeted investments and strategic initiatives we implemented in prior
years, we are now enjoying success despite weak economic tailwind," said
Frank Appel, CEO of Deutsche Post DHL Group. "We are well on track to
reaching the ambitious goals we have set for 2016 and beyond."
Outlook: Earnings forecast for 2016 and long-term objectives confirmed
The company anticipates only moderate growth in the world economy for the
remainder of 2016. Despite the continuing lack of economic tailwind,
Deutsche Post DHL Group still expects to reach its objective of
significantly increasing EBIT for full-year 2016 to between EUR 3.4 billion
and EUR 3.7 billion based on the Group's very positive operating
performance in the first nine months.
The Group has also confirmed its targets for the coming years: 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).
Third quarter of 2016: EBIT rises by EUR 558 million
Both the Post - eCommerce - Parcel (PeP) division and the DHL divisions
contributed to the substantial EUR 558 million increase in third-quarter
Group EBIT to EUR 755 million. This improvement was supported by the fact
that the one-time effects posted in the prior-year period did not recur in
2016.
Operating profit at PeP more than doubled to EUR 295 million, with the
prior-year EBIT figure (2015: EUR 142 million) impacted primarily by the
consequences of the postal strike in Germany. The DHL divisions reported a
combined, strong increase in EBIT to EUR 536 million (2015: EUR 127
million). The Global Forwarding, Freight division contributed in particular
to the increase with an improvement from EUR -337 million to EUR 63
million. The negative figure reported in the previous year was due to one-
time charges of EUR 384 million, primarily associated with the renewal of
the division's IT systems. The Supply Chain division increased EBIT by
35.6% to EUR 137 million. The Express division registered a decline to EUR
336 million (2015: EUR 364 million) based on non-recurring income posted in
the previous year. After adjusting for that effect, divisional EBIT
improved by 19%.
Thanks to the absence of charges that had been incurred in the prior year,
along with the increase in operating profit and lower financing costs,
consolidated net profit improved to EUR 618 million in the third quarter of
2016 (2015: EUR 49 million). Basic earnings per share saw a similar
increase, rising from EUR 0.04 in the prior year to EUR 0.51 in 2016.
Capital expenditure and cash flows: Group further strengthens foundation
for growth
The Group invested EUR 498 million in the third quarter of 2016 (2015: EUR
547 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 infrastructures and invested in the production of its StreetScooter
electric vehicle, in addition to expanding global and regional hubs in the
Express division and modernizing and expanding the aircraft fleet.
The Group continued to focus successfully on cash flow in the third
quarter: Operating cash flow rose by 12.0% to EUR 887 million (2015: EUR
792 million), and free cash flow increased 65.0% to EUR 543 million (2015:
EUR 329 million). The increase was a reflection in particular of the
improvement in the Group's operating profit.
Post - eCommerce - Parcel: E-commerce growth driver remains intact
Revenue in the Post - eCommerce - Parcel division increased by 4.0% to EUR
4.0 billion in the third quarter (2015: EUR 3.8 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 units.
Revenue in the eCommerce - Parcel business units increased by 11.6% to EUR
1.7 billion. The increase was based on revenue gains of 11.1% for Parcel
Germany, 13.3% for Parcel Europe and 12.3% for eCommerce. The upward trend,
once again, illustrates how Deutsche Post DHL Group is increasingly
benefitting from positioning itself successfully as a market and innovation
leader in the high-growth e-commerce segment. The Group has also been
additionally expanding its parcel network via partnerships with postal
companies in Hungary and Slovenia, which brings the number of European
countries in which the Group is active to 18. Deutsche Post DHL Group will
continue to advance its expansion in the United Kingdom, Europe's biggest
e-commerce market, through the planned acquisition of UK Mail.
Revenue in the Post business unit declined by 0.9% to EUR 2.296 billion
(2015: EUR 2.318 billion). The increase in letter postage prices at the
beginning of the year almost fully offset the negative effects of the
structural decline in volumes in Mail Communication and Dialogue Marketing
segments.
PeP division EBIT rose to EUR 295 million in the period from July to
September, up from EUR 142 million in the prior-year period when operating
profit had been reduced primarily due to the postal strike in Germany. Even
after adjusting for this effect, the increase in EBIT was significant. The
improvement was primarily fueled by the revenue growth, the increase in
postage prices, disciplined cost management and sustained growth at
eCommerce - Parcel. Investments in the international parcel business held
back an even greater increase in EBIT.
Express: Revenue and operating profit continue strong performance
The sustained upward revenue trend enjoyed by the Express division for a
number of years continued in the third quarter. At the same time there was
a significant improvement in earnings based on organic growth. Revenue rose
by 2.9% to EUR 3.4 billion (2015: EUR 3.3 billion). Adjusted for negative
currency effects and lower fuel surcharges, the increase was 5.3%. This
dynamic performance was once again driven by solid growth in the
international time-definite (TDI) delivery business, where daily volumes
rose by 6.8% in the third quarter compared with the prior-year period. At
the same time, Express focused on disciplined yield management.
The 7.7% decline in EBIT to EUR 336 million is attributable to non-
recurring income of EUR 82 million recognized in the prior-year period,
which was largely the result of an asset write-up in the Americas region.
Adjusted for the positive effect on prior-year earnings, EBIT rose by 19%
thanks to improvements in the network, strong growth in the international
business and pricing initiatives. The operating margin stood at 9.8% in the
third quarter. The margin improved from 10.7% to 10.9% over the entire
period from January to September 2016 when compared with the prior-year
period.
Global Forwarding, Freight: Earnings continue on an upward trajectory
Revenue in the Global Forwarding, Freight division decreased by 6.3% to EUR
3.4 billion in the third quarter of 2016 (2015: EUR 3.6 billion). Adjusted
for negative currency effects and lower fuel surcharges, revenue declined
by 2.2%. The revenue trend does not reflect the growth in volumes
registered in the third quarter owing to the decline in freight rates over
the course of the year.
Operating profit for the period from July to September improved from EUR
-337 million in 2015 to EUR 63 million in 2016. Even after adjusting for
the non-recurring expenses contained in prior-year earnings as a result of
renewing the division's IT systems, Global Forwarding Freight registered a
significant rise in EBIT of 34.0%. The positive earnings trend over the
past four quarters is an indication of the success of the measures
initiated last year to improve operating performance at Global Forwarding,
Freight.
Supply Chain: Profitability continues to improve
Revenue in the Supply Chain division decreased by 14.7% to EUR 3.4 billion
in the third quarter (2015: EUR 4.0 billion). The decline was solely the
result of special effects. After adjusting for negative currency effects,
lower fuel surcharges and the effect of the change in revenue recognition
announced in 2015 due to revised terms in the contract with the National
Health Service (NHS), a major UK account, revenue increased by 2.3% over
the previous year. Supply Chain continued to generate additional new
business. In the third quarter, the division concluded additional contracts
worth EUR 306 million with both new and existing customers.
In addition to lower restructuring costs, the Supply Chain division's
strong EBIT growth of 35.6% to EUR 137 million reflected the positive
impact of the division's optimization initiative which began last year. The
initiative aims to increase the operating 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 nine months: Operating profit increases by EUR 926 million
Group revenue fell by 4.5% to EUR 41.9 billion in the first nine months of
2016 (2015: EUR 43.9 billion). That decrease was caused by the special
effects referred to previously: negative currency effects, lower fuel
surcharges and the change in revenue recognition in the Supply Chain
division. After adjusting for those factors, revenue increased by 2.6% over
the prior year. Operating profit at Deutsche Post DHL Group climbed by
63.7% to EUR 2.4 billion from January to September (2015: EUR 1.5 billion).
Consolidated net profit rose by more than 100% to EUR 1.8 billion in the
first nine months of 2016 (2015: EUR 870 million). Basic earnings per share
increased from EUR 0.72 to EUR 1.49 in line with the increase in profit.
- End -
Note to editors: An interview with CEO Frank Appel 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.de/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 third quarter of 2016
in EUR millions Q3 Q3 Change 2015 2016 in % Revenues 14,424 13,862 -3.9 - of which international 10,284 9,629 -6.4 Profit from operating activities (EBIT) 197 755 >100 Consolidated net profit1) 49 618 >100 Basic earnings per share (in EUR) 0.04 0.51 >100 Diluted earnings per share (in EUR) 0.04 0.49 >100Divisional revenues in the third quarter of 2016 in EUR millions Q3 Share of Q3 Share of Change 2015 total revenues 2016 total revenues in % Post - eCommerce - 3,805 26.4 3,956 28.5 4.0 Parcel Express 3,328 23.1 3,426 24.7 2.9 Global Forwarding, 3,587 24.9 3,362 24.3 -6.3 Freight Supply Chain 4,005 27.8 3,416 24.6 -14.7 Corporate Center/ -301 n.a. -298 n.a. 1.0 Other and consolidation Group 14,424 13,862 -3.9Divisional EBIT in the third quarter of 2016 in EUR millions Q3 Q3 Change 2015 2016 in % Post - eCommerce - Parcel 142 295 >100 DHL 127 536 >100 - Express 364 336 -7.7 - Global Forwarding, Freight -337 63 >100 - Supply Chain 101 137 35.6 Corporate Center/Other and -73 -76 -4.1 consolidation Group 197 755 >1001) After non-controlling interests. Group financial highlights in the first nine months of 2016 in EUR millions 9M 9M Change 2015 2016 in % Revenues 43,891 41,924 -4.5 - of which international 31,253 28,904 -7.5 Profit from operating activities (EBIT) 1,454 2,380 63.7 Consolidated net profit1) 870 1,798 >100 Basic earnings per share (in EUR) 0.72 1.49 >100 Diluted earnings per share (in EUR) 0.69 1.43 >100Divisional revenues in the first nine months of 2016 in EUR millions 9M Share in 9M Share in Change 2015 total revenues 2016 total revenues in % Post - eCommerce - 11,618 26.5 12,157 29.0 4.6 Parcel Express 10,023 22.8 10,200 24.3 1.8 Global Forwarding, 11,154 25.4 10,114 24.1 -9.3 Freight Supply Chain 11,992 27.3 10,350 24.7 -13.7 Corporate Center/ -896 n.a. -897 n.a -0.1 Other and consolidation Group 43,891 41,924 -4.5Divisional EBIT in the first nine months of 2016 in EUR millions 9M 9M Change 2015 2016 in % Post - eCommerce - Parcel 616 954 54.9 DHL 1,064 1,661 56.1 - Express 1,072 1,113 3.8 - Global Forwarding, Freight -280 183 >100 - Supply Chain 273 366 34.1 Corporate Center/Other and -227 -236 -4.0 consolidation Group 1,454 2,380 63.71) After non-controlling interests. End of Media Release --------------------------------------------------------------------------- Issuer: Deutsche Post AG Key word(s): Enterprise 08.11.2016 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 --------------------------------------------------------------------------- 518159 08.11.2016
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