DGAP-News: Deutsche Post DHL remains on successful path

DGAP-News: Deutsche Post DHL remains on successful path

DGAP-News: Deutsche Post AG / Key word(s): Half Year Results/Quarter
Results
Deutsche Post DHL remains on successful path

06.08.2013 / 07:00

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Deutsche Post DHL remains on successful path

  - Consolidated revenues on prior year's level in Q2

  - Operating earnings up; significant increase in consolidated net profit 

  - Strong cash flow development in Q2

  - Guidance adjusted to reflect positive one-time effect in MAIL: Group
    EBIT of between EUR 2.75 billion and EUR 3.0 billion expected

  - CEO Frank Appel: 'Focus on cash flow is increasingly bearing fruit'

Bonn, August 6, 2013: During the second quarter of 2013, Deutsche Post DHL
generated further gains in revenues and earnings. Revenues produced by the
world's leading mail and logistics group totaled EUR 13.6 billion between
April and June. The slight 0.6 percent dip compared with the same period
last year was solely the result of negative exchange-rate and other
inorganic effects. Adjusted for these factors, revenues in the second
quarter of 2013 increased nearly 2 percent above the level reached last
year. This growth was largely due to the continuing volume and revenue
gains being generated by the parcel segment in Germany, the international
EXPRESS business and the SUPPLY CHAIN division. The Group's operating
earnings increased 14 percent to EUR 619 million in the second quarter. The
reversal of a provision in the MAIL division during the second quarter and
the absence of a number of one-time effects that negatively impacted the
previous year's results contributed to this increase. During the second
quarter, consolidated net profit climbed from EUR 196 million in 2012 to
EUR 422 million in 2013 due in part to the one-time effects. The Group also
made considerable headway in cash generation: During the second quarter of
2013, free cash flow was around EUR 350 million above the previous year's
level.

'Given the economic challenges we continue to face, we can be satisfied
with our solid performance in the second quarter,' said Frank Appel, CEO of
Deutsche Post DHL. 'Our strength in the international express business and
in Germany's parcel market has paid off once again in the past few months.
Our focus on cash flow generation is also increasingly bearing fruit.'

Second quarter 2013: consolidated net profit up considerably 
After generating revenues of EUR 13.7 billion in the second quarter of
2012, the Group generated revenues of EUR 13.6 billion in the second
quarter of this year. The slight decrease of 0.6 percent resulted from
negative exchange-rate and other inorganic effects. Adjusted for these
factors, revenues rose by more than EUR 250 million in the second quarter
of 2013. Consolidated EBIT jumped by 14 percent in the same period to EUR
619 million (2012: EUR 543 million). This rise was largely attributable to
a EUR 50 million reversal of the postage stamp provision in the MAIL
division. Another key reason was the absence of one-time effects that had a
negative impact totaling EUR 38 million on the second-quarter results of
2012. These one-time effects stemmed largely from the VAT settlement charge
taken last year and the reversal of provisions in the EXPRESS division.
During the past quarter, the Group recorded a small loss resulting from the
disposal of company units that were not part of the core business in the
SUPPLY CHAIN division. Adjusted for these one-time effects in both years,
operating earnings produced in the second quarter of 2013 would have
reached the previous year's level.

The Group's financial result improved during the second quarter, from minus
EUR 249 million to minus EUR 39 million. Part of the VAT settlement charge
taken last year is also reflected in this result. This charge had a
negative impact of EUR 115 million on the Group's financial result in the
second quarter of 2012. As a result of this development, a positive
one-time effect in this year's financial result in an amount of EUR 42
million and the significant rise in operating earnings, the company was
able to more than double its consolidated net profit for the second quarter
of 2013 to EUR 422 million (2012: EUR 196 million). This corresponds to an
increase in basic earnings per share to EUR 0.35 (2012: EUR 0.16). Adjusted
for the one-time effects in both years, consolidated net profit and
earnings per share would have improved by around 9 percent in the second
quarter.

Outlook: earnings guidance adjusted upwards
In light of the positive one-time effect in the MAIL division in the second
quarter, the company has increased its earnings guidance for the current
financial year. It now expects to produce consolidated EBIT of between EUR
2.75 billion and EUR 3.0 billion. The company originally forecast operating
earnings of between EUR 2.7 billion and EUR 2.95 billion. Operating
earnings generated by the DHL divisions are still expected to total between
EUR 2.0 billion and EUR 2.15 billion. The Group now expects to see earnings
at the MAIL division rise to a level of between EUR 1.15 billion and EUR
1.25 billion, EUR 50 million more than previously projected. Expenditures
for Corporate Center/Other are expected to remain at about EUR 400 million.
At the same time we now expect that net profit growth should exceed the
growth in operating profit in 2013. The company also expects that its focus
on cash flow will continue to yield positive results and enable this year's
free cash flow to at least cover the dividend payment for financial year
2012.

Looking beyond the current year, the Group expects the positive earnings
trend to continue. For DHL, the Group forecasts earnings to rise by an
annual average of between 13 percent and 15 percent between 2010 and 2015.
The operating profit of the MAIL division should stabilize at a level of at
least EUR 1 billion thanks to cost-cutting measures and growth programs
that have been introduced. In combination with the planned reduction of
expenditures for Corporate Center/Other, the Group expects operating
earnings to increase to between EUR 3.35 billion and EUR 3.55 billion by
2015.

Cash flow: significant improvements
The Group's intensified focus on cash flow also paid off in the second
quarter: At EUR 501 million, operating cash flow in the second quarter was
more than twice as high as it was a year ago (2012: EUR 215 million). In
the first half of the year, the cash flow from operating activities totaled
EUR 621 million. Last year, the Group reported a cash outflow of EUR 142
million. This year-over-year increase of more than EUR 750 million
primarily reflects the Group's continued good operating performance and
working capital improvements. Accordingly, free cash flow improved
significantly in the first half of the year, climbing by more than EUR 850
million from minus EUR 767 million in the first half of 2012 to EUR 99
million in 2013. At the end of the second quarter, the Group's net debt
totaled EUR 2.8 billion. Compared with the end of 2012, this involves a
seasonally typical rise, which totaled around EUR 850 million this year and
primarily reflects the dividend payment that was made in May (EUR 846
million).

Capital expenditures: foundation for growth bolstered
The Group's capital expenditures totaled EUR 281 million in the second
quarter (2012: EUR 374 million). A total of EUR 499 million was invested in
the first half of the year (2012: EUR 679 million). This decline from the
previous year's level was primarily due to timing effects. For the entire
year, the Group expects capital expenditures to rise to a maximum of EUR
1.8 billion. In the first half of the year, the DHL divisions remained the
focal point of the Group's capital expenditures. These investments flowed
into areas that reinforce the foundation for future growth and long-term
business success - including the continued expansion of the network, a more
efficient air fleet, state-of-the-art warehouses, and a new IT
infrastructure for Global Forwarding. The MAIL division increased its
capital expenditures, mainly due to higher investments in the expansion of
its parcel infrastructure.

First half of the year: revenue and earnings growth continues
In the first half of the year, consolidated revenues remained at the
previous year's level at EUR 27.1 billion. Adjusted for negative
exchange-rate and other inorganic effects, revenues would have risen by 1.7
percent, or more than EUR 450 million, in the first half. The Group's
operating earnings rose by 7.8 percent compared with the first half of
2012, climbing to EUR 1.3 billion (2012: EUR 1.2 billion). The one-time
effects reflected in the quarterly results in both years had a similar
impact on the half-year figures. Adjusted for these one-time effects,
consolidated EBIT would have risen slightly between January and June 2013.
During the first six months of 2013, consolidated net profit climbed by 27
percent from EUR 725 million in 2012 to EUR 920 million during the current
financial year. Earnings per share rose from EUR 0.60 in the previous year
to EUR 0.76 in 2013. Adjusted for all one-time effects - in addition to the
previously stated factors, the absence of the EUR 186 million disposal gain
that resulted from the Postbank sale in the first quarter of the previous
year impacted the year-on-year comparison - consolidated net profit would
have risen by around 26 percent.

Mail division: parcel business continues on dynamic growth path
During the second quarter of 2013, revenues in the MAIL division climbed by
4.4 percent to EUR 3.4 billion (2012: EUR 3.3 billion). In addition to
significant revenue gains in the Global Mail business, this growth was
fueled in particular by the continuing dynamic performance of the
division's parcel operation in Germany. As online retailing continues to
grow, the company is proactively addressing the opportunity with innovative
products and delivery services. Parcel revenues climbed by nearly 9 percent
to EUR 867 million in the second quarter. As a result, the parcel business
is now generating more than one-fourth of total revenues in the MAIL
division. Operating earnings produced by the division climbed to EUR 223
million between April and June 2013 (2012: EUR 38 million). The comparison
with the previous year's results was significantly impacted by the
provision reversal in this year's quarter and the absence of the VAT charge
taken last year. Adjusted for these effects, EBIT produced by the MAIL
division in the second quarter would have fallen slightly as a result of
increased material and personnel costs.

EXPRESS division: international express business remains strong
During the second quarter of 2013, the EXPRESS division continued to
increase both organic revenues and earnings. Between April and June,
reported revenues did remain at the previous year's level of EUR 3.2
billion. But revenues reported last year included the results of the
domestic express businesses in Australia, New Zealand and Romania that the
company has sold in the meantime. Adjusted for this disposal effect and
negative exchange-rate developments, revenues rose by 4 percent in the
second quarter. Once again, the main growth driver of the revenue
improvement were the division's international time-definite shipments. This
positive trend results from significant volume and revenues gains in these
products that continue to be achieved in all regions. On a reported basis,
the division's EBIT fell to EUR 296 million in the second quarter (2012:
EUR 367 million). The sole reason for this decrease was the absence of
various one-time effects related to the VAT charge taken last year, the
reversal of provisions and the gain on the disposal of company units that
were not part of the core business. These factors had a positive impact of
EUR 113 million on the division's earnings in the same period last year.
Adjusted for these non-recurring effects, operating improvements produced
by the investments made over the past quarters in the expansion of the
division's network, employee training and its range of services resulted in
a double-digit gain in EBIT and a significant rise in the operating margin
to more than 9 percent.

GLOBAL FORWARDING, FREIGHT division: selective market strategy 
In the GLOBAL FORWARDING, FREIGHT division, revenues in the second quarter
of 2013 fell by 6.3 percent to EUR 3.7 billion (2012: EUR 4.0 billion) in a
challenging market environment. Adjusted for negative exchange-rate
effects, the decrease would have been slightly lower at about 4 percent.
Volume and revenues in air freight fell below the previous year's level
primarily due to weak demand in the 'Technology' and 'Engineering &
Manufacturing' sectors. Volume and revenues also decreased in ocean freight
during the past quarter. This resulted largely from weaker demand on
traditional east-west trade lanes. In contrast, demand on north-south
routes and within continents rose. Small revenue gains were achieved in
European overland transport. Thanks to a selective market strategy and
continued strict cost controls, the division's operating margin remained
stable despite the decline in revenues. Operating earnings in the division
totaled EUR 129 million in the second quarter (2012: EUR 138 million).

SUPPLY CHAIN division: successful new-customer business
Revenues generated by the SUPPLY CHAIN division in the second quarter of
2013 rose to EUR 3.6 billion (2012: EUR 3.5 billion). Adjusted for negative
exchange-rate effects and the impact of the disposal of three subsidiaries
that were not part of the core business, revenues between April and June
climbed by nearly 6 percent, or about EUR 200 million. This growth was
fueled in particular by significant gains in the Asia-Pacific region as
well as in the Automotive, Retail and Consumer sectors. During the second
quarter of 2013, the volume of new contracts concluded with new and
existing customers set a second-quarter record at EUR 350 million, another
clear demonstration of the division's successful performance. Despite
further operating improvements, EBIT fell to EUR 79 million in the second
quarter (2012: EUR 101 million). This drop, however, resulted largely from
one-time expenses related to the disposals and small restructuring charges.

- End -

Group financial highlights in the second quarter of 2013



                                         2nd quarter  2nd quarter  Change
in million euros                                2012         2013    in %
Revenues                                      13,732       13,649   -0.6%
- of which international                       9,731        9,553   -1.8%
Profit from operating activities (EBIT)          543          619   14.0%
Consolidated net profit1) 2)                     196          422   >100%
Basic earnings per share1) (in euros)           0.16         0.35   >100%
Diluted earnings per share1) (in euros)         0.16         0.33   >100%




Divisional revenues in the second quarter of 2013 



                          2nd     Share of       2nd     Share of
                      quarter        total   quarter        total    Change
in million euros         2012     revenues      2013     revenues      in %
MAIL                    3,288        23.9%     3,433        25.2%      4.4%
EXPRESS                 3,244        23.6%     3,237        23.7%     -0.2%
GLOBAL FORWARDING,      3,973        28.9%     3,722        27.3%     -6.3%
FREIGHT
SUPPLY CHAIN            3,528        25.7%     3,550        26.0%      0.6%
Corporate Center /       -301          n/a      -293          n/a      2.7%
Other and
consolidation
Consolidated           13,732         100%    13,649         100%     -0.6%
revenues




Divisional EBIT in the second quarter of 20131)



                                  2nd quarter      2nd quarter      Change
in million euros                         2012             2013        in %
MAIL                                       38              223       >100%
DHL                                       606              504      -16.8%
- EXPRESS                                 367              296      -19.3%
- GLOBAL FORWARDING, FREIGHT              138              129       -6.5%
- SUPPLY CHAIN                            101               79      -21.8%
Corporate Center / Other and             -101             -108       -6.9%
consolidation
Consolidated EBIT                         543              619       14.0%





1) Prior-year amounts adjusted.
2) After non-controlling interests. 
 
 Group financial highlights for the first half of 2013



                                        1st half of                  Change
in million euros                               2012 1st half of 2013   in %
Revenues                                     27,096           27,093   0.0%
- of which international                     18,834           18,730  -0.6%
Profit from operating activities (EBIT)       1,234            1,330   7.8%
Consolidated net profit1) 2)                    725              920  26.9%
Basic earnings per share1) (in euros)          0.60             0.76  26.7%
Diluted earnings per share1) (in euros)        0.60             0.73  21.7%




Divisional revenues in the first half of 2013 



in million      1st half       Share of   1st half       Share of    Change
euros            of 2012  total revenues   of 2013  total revenues     in %
MAIL               6,845          25.3%      7,045          26.0%      2.9%
EXPRESS            6,264          23.1%      6,274          23.2%      0.2%
GLOBAL             7,659          28.3%      7,337          27.1%     -4.2%
FORWARDING,
FREIGHT
SUPPLY CHAIN       6,937          25.6%      7,033          26.0%      1.4%
Corporate           -609            n/a       -596            n/a      2.1%
Center/Other
and
consolidation
Consolidated      27,096           100%     27,093           100%      0.0%
revenues




Divisional EBIT in the first half of 20131)



                                  1st half of      1st half of      Change
in million euros                         2012             2013        in %
MAIL                                      430              605       40.7%
DHL                                     1,017              931       -8.5%
- EXPRESS                                 599              550       -8.2%
- GLOBAL FORWARDING, FREIGHT              225              217       -3.6%
- SUPPLY CHAIN                            193              163      -15.5%
Corporate Center/Other and               -213             -205        3.8%
consolidation
Consolidated EBIT                       1,234            1,330        7.8%





1) Prior-year amounts adjusted.
2) After non-controlling interests. 
 


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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:      ir@deutschepost.de                                         
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                                          
 
 
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224318 06.08.2013                                                      
 
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