DGAP-News: Deutsche Post DHL meets earnings guidance and proposes higher dividend for 2013

DGAP-News: Deutsche Post DHL meets earnings guidance and proposes higher 
dividend for 2013

DGAP-News: Deutsche Post AG / Key word(s): Final Results
Deutsche Post DHL meets earnings guidance and proposes higher dividend
for 2013

12.03.2014 / 07:00

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Deutsche Post DHL meets earnings guidance and proposes higher dividend for
2013

  - Operating earnings increase to EUR 2.86 billion

  - Net profit and cash flow climb sharply

  - Group proposes to raise dividend to EUR 0.80 per share

  - Earnings momentum to continue in 2014; 2015 guidance confirmed  

  - CEO Frank Appel: "We will continue to work hard to reach our goals" 

Bonn, March 12, 2014: Deutsche Post DHL, the world's leading postal and
logistics group, generated revenues of more than EUR 55 billion and boosted
profitability once again in 2013. Compared with the previous year, revenues
declined slightly, by 0.8 percent to EUR 55.1 billion, as a result of
negative exchange-rate and other inorganic effects. Adjusted for these
factors, however, revenues rose by nearly 3 percent. This gain was fueled
in part by higher postal rates as well as rising volume and revenues in the
parcel business in Germany. Other revenue drivers included strong growth in
the express business and revenue gains in the SUPPLY CHAIN division. These
improvements were the result of the company's exceptional market position
in the world's growth markets, where the DHL divisions are now generating a
significant share of their revenues. This positioning also laid the
foundation for margin improvements that led to an EBIT increase to EUR 2.86
billion. Operating earnings thus finished the year 2013 within the targeted
corridor of between EUR 2.75 billion and EUR 3.0 billion. Consolidated net
profit reached EUR 2.1 billion during the past year, an increase of more
than EUR 450 million compared to 2012.

"We took a significant step forward in 2013. We built upon our existing
strengths, affirmed our strong market position and significantly improved
the company in all aspects of our Strategy 2015," said Frank Appel, the CEO
of Deutsche Post DHL. "We will nevertheless continue to work hard to reach
our 2015 goals given the continued sluggish global economic environment."

Guidance: Group remains confident 
Even though the world economy is expected to see only a small acceleration
of growth, the Group expects to continue its positive earnings trend in
2014 and increase EBIT to between EUR 2.9 billion and EUR 3.1 billion.
While the MAIL division is anticipated to contribute about EUR 1.2 billion
to this total, the DHL divisions should continue to grow earnings and
generate an EBIT of between EUR 2.1 billion and EUR 2.3 billion during the
year. The earnings guidance for the divisions in particular reflects the
organizational transfer of various domestic parcel businesses from DHL to
MAIL that was effective as of the beginning of this year in several
international markets. In addition, the Group plans to lower the Corporate
Center/Other expenses to below EUR 400 million in 2014. Furthermore, the
company expects to generate sufficient free cash flow again to cover this
year's dividend for financial year 2013.

Looking toward 2015, Deutsche Post DHL continues to forecast achievement of
the targets set out in the company's Strategy 2015. The company expects to
increase operating profit to between EUR 3.35 billion and EUR 3.55 billion.
In light of the organizational changes introduced this year, the company
has adjusted the specific targets for the MAIL and the DHL divisions:
Deutsche Post DHL now expects the MAIL division to generate earnings of at
least EUR 1.1 billion in 2015 (previously: at least EUR 1 billion). For the
DHL divisions the company has adjusted its EBIT guidance by the
corresponding amount. The operating earnings for the DHL divisions should
now total between EUR 2.6 billion and EUR 2.8 billion in 2015. The
expenditures for Corporate Center/Other are still expected to be reduced to
around EUR 350 million by 2015.
 
Fiscal year 2013: Profitability improved
In 2013, consolidated revenues totaled EUR 55.1 billion, a slight drop from
the previous year's total of EUR 55.5 billion. Adjusted for negative
exchange-rate and other inorganic effects, however, revenues climbed last
year by 2.8 percent, or more than EUR 1.5 billion. During the same period,
the Group's EBIT increased by 7.4 percent, or about EUR 200 million, to EUR
2.86 billion (2012: EUR 2.67 billion). In addition to operational
improvements, this result reflects a number of one-time effects that
impacted the comparison with the previous year's performance: In 2013, the
utilization of parts of the postage stamp provision had a positive effect
of EUR 50 million on earnings. Another factor positively impacting the
year-over-year comparison was the absence of one-time effects in 2013 that
in total had a negative impact of EUR 38 million on EBIT at the MAIL and
EXPRESS divisions in 2012. In the SUPPLY CHAIN division, positive and
negative one-time factors virtually offset each other in 2013. Even when
adjusted for all major non-recurring factors, the Group's operating
earnings would have risen in 2013 - driven by profitability gains generated
by the DHL divisions. As a result of the company's increased operating
profit, its improved financial result and a lower tax rate, consolidated
net profit jumped by 27.5 percent last year to EUR 2.1 billion (2012: EUR
1.6 billion). Similarly, basic earnings per share climbed from EUR 1.36 in
the previous year to EUR 1.73 in 2013. Adjusted for all one-time effects -
including the EUR 186 million disposal gain resulting from the Postbank
sale in the first quarter of 2012 - the company's net profit and earnings
per share also climbed steeply.

Dividend: Group proposes 14 percent increase
In light of the Group's good performance in 2013 and its confidence in the
company's future performance, the Board of Management and the Supervisory
Board will propose a dividend of EUR 0.80 per share to the Annual General
Meeting on May 27, an increase of EUR 0.10 per share. Should shareholders
approve this proposal, the Group will pay out a total of EUR 967 million to
its shareholders, 14 percent more than in the prior year. Based on the
consolidated net profit adjusted for non-recurring-items the dividend
proposal represents a payout ratio of 49 percent. As a result, the
company's dividend proposal remains in the middle range of the target
corridor of between 40 percent and 60 percent that was set in 2010 as part
of the finance strategy introduced that year.

Fourth quarter 2013: DHL ends the year strongly
At EUR 14.5 billion, revenues finished the final quarter of 2013 slightly
below the 2012 level of EUR 14.6 billion. This dip in revenues resulted
from negative exchange-rate and other inorganic effects. Adjusted for these
factors, revenues in Q4 rose by more than EUR 600 million, or over 4
percent. The final three months of 2013 were the most profitable period for
the Group during the year. At EUR 885 million, operating earnings in the
final quarter of 2013 increased 7 percent above the previous year's level
(2012: EUR 827 million). This improvement was led by a double-digit EBIT
gain at DHL. The high negative exchange-rate effects were largely offset by
positive net one-time effects in the SUPPLY CHAIN division. While
adjustments to pension plans in the UK had a positive impact, one-time
expenses were incurred for minor restructuring activities in Europe.
Operating earnings in the MAIL division declined slightly in the fourth
quarter due to higher factor costs. Also as a result of positive tax
effects and lower financial charges, consolidated net profit in the fourth
quarter climbed by 43.5 percent, increasing from EUR 538 million in 2012 to
EUR 772 million in 2013. Correspondingly, basic earnings per share rose to
EUR 0.64 (2012: EUR 0.45).

Capital expenditures: Foundation of growth further reinforced 
To bolster its foundation for continued profitable growth, the Group
invested a total of EUR 1.755 billion in 2013. The increase of more than
EUR 50 million over the previous year's amount of EUR 1.7 billion, resulted
primarily from the increased capital expenditures the MAIL division made to
expand its parcel infrastructure. Nonetheless, the largest share of the
Group's capital expenditures in 2013 continued to be realized in the DHL
divisions. These investments flowed into areas that reinforce the
foundation for future growth and long-term business success - and included
the continued expansion of the network, a more efficient air fleet,
state-of-the-art warehouses and a new IT infrastructure for Global
Forwarding.

Cash flow: Group exceeds targets 
During the past year, the Group made significant strides in its effort to
improve cash flow generation: In 2012, one-time effects related to the
funding of pension obligations, the VAT payment and restructuring
expenditures totaled EUR 2.6 billion. This, in turn, resulted in a negative
free cash flow of EUR 1.9 billion. In 2013, however, the Group was able to
generate positive free cash flow totaling EUR 1.7 billion. With this
improvement - an increase of nearly EUR 1 billion compared with the
previous year's free cash flow of EUR 723 million after adjustment for the
one-time effects - the company significantly exceeded its goal of
generating sufficient free cash flow to cover the dividend of EUR 846
million that was paid out to shareholders in 2013. Key reasons for this
improvement included the company's increased operating earnings as well as
positive timing effects. Thanks to the strong cash-flow performance, net
debt fell to EUR 1.5 billion at the end of the year (2012: EUR 2.0
billion). In the fourth quarter alone, the company realized an improvement
of approximately EUR 1 billion.

MAIL division: Parcel business remains very dynamic
In 2013, revenues in the MAIL division climbed by 3.4 percent to EUR 14.5
billion (2012: EUR 14.0 billion). As planned, the E-Post offering
contributed around EUR 100 million to this total. In addition, revenue
gains in the domestic mail business that resulted from the postal rate
increase from the beginning of 2013 and the continued dynamic growth in the
German parcel business were the driving forces behind the improvement. The
company proactively capitalized on the growth opportunities arising from
the e-commerce trend by continuously developing innovative products and
delivery services. These improvements include the expansion of evening
delivery service to an increasing number of metropolitan areas, the
continued extension of the Packstation network and the introduction of DHL
parcel boxes to customers throughout Germany. As a result of these efforts,
the number of transported parcels broke the 1 billion barrier for the first
time in 2013. Fueled by this growth, revenues in the parcel business - a
segment that now produces around 26 percent of the MAIL division's total
revenues - increased nearly 8 percent last year and reached a record level
of EUR 3.8 billion. In 2013, the MAIL division's operating earnings climbed
by 17 percent to reach EUR 1.2 billion. Nevertheless, the comparison with
the previous year's results was significantly impacted by the stamp
provision utilization in the second quarter of 2013 and the absence of the
VAT charge taken in 2012. Excluding these effects, EBIT in the MAIL
division would have fallen slightly last year as a result of higher
material and staff costs.

EXPRESS division: International express business sees strong growth
The EXPRESS division continued to generate significant gains in revenues
and earnings in 2013. Reported revenues amounted to EUR 12.7 billion, a
slight decrease from the previous year's total of EUR 12.8 billion.
However, revenue in 2012 included the divested domestic express businesses
in Australia, New Zealand and Romania. Adjusted for this effect and
significant negative exchange-rate effects, revenues rose by more than 4
percent organically. Once again, the main factor fueling these gains was
the growth of international time-definite shipments. This positive result
was achieved in all regions. The division's EBIT rose by more than 2
percent last year and totaled EUR 1.1 billion (2012: EUR 1.1 billion). The
comparison with the 2012 figures is distorted, however, by the absence of
various positive one-time factors in 2012. These factors were related to
the reversal of restructuring provisions, gains from divestments and
partially offset by the VAT payment. In total, these one-time effects
increased the 2012 profit by EUR 113 million. Excluding the one-time
effects, operating improvements resulting from investments made in the
network, employee training and improvements in customer service resulted in
a double-digit percentage EBIT gain and a significant improvement in the
operating margin of more than 100 basis points to nearly 9 percent.

GLOBAL FORWARDING, FREIGHT division: Stable EBIT margin 
In a business environment that remains challenging, revenues in the GLOBAL
FORWARDING, FREIGHT division decreased by 5.3 percent in 2013 to EUR 14.8
billion (2012: EUR 15.7 billion). Adjusted for negative exchange-rate
effects, the decrease has been a little more than 2 percent. Volume and
revenues in air freight fell below the previous year's level primarily
because of weakened demand from several large customers in the Technology
and Engineering & Manufacturing sectors. Ocean freight volume and revenues
also decreased. The main reason for this development was lower demand in
the Americas and Europe regions. In contrast, demand rose on intra-Asian
and North-South routes. A small rise in revenues generated by overland
transportation resulted largely from a slight business improvement in
Germany, Eastern Europe, the Benelux countries and France. Thanks to a
selective market strategy and continued strict cost controls, the division
was able to maintain its operating margin despite the decline in revenues
and increased investments in the transformation of its IT infrastructure.
Nevertheless, the division's EBIT fell to EUR 483 million (2012: EUR 514
million).

SUPPLY CHAIN division: Successful new customer business
At DHL SUPPLY CHAIN, revenues fell slightly to EUR 14.3 billion in 2013
(2012: EUR 14.3 billion). Adjusted for negative exchange-rate effects and
the impact of the disposal of three subsidiaries that were not part of the
company's core business, revenues climbed by nearly 6 percent, or more than
EUR 800 million. This increase was fueled primarily by strong growth in the
Asia-Pacific region as well as in the Life Sciences & Healthcare,
Automotive, Consumer and Technology sectors. At EUR 1.5 billion, the volume
of new contracts concluded with new and existing customers reached a record
level. Once again, these gains clearly demonstrated the strength of the
division's successful business model. During 2013, the division's EBIT
climbed by 5.3 percent to EUR 441 million (2012: EUR 419 million).
Expenditures related to company divestments, minor restructuring activities
in Europe and the insolvency proceedings involving a customer in the United
States were almost completely offset by a non-recurring positive effect
resulting from modification of pension plans in the UK.

- End -

Note to newsrooms: At www.dpdhl.com you will find an interview with CEO
Frank Appel and background information about the Group's Corporate
Responsibility Report that was also released today. The Group's press
conference will be broadcast live online beginning at 10 a.m. The investor
conference call will be webcast beginning at 2 p.m.

 
Group financial highlights for 2013



                                                                     Change
in million euros                               2012        2013        in %
Revenues                                     55,512      55,085       -0.8%
- of which international                     38,687      38,011       -1.7%
Profit from operating activities (EBIT)       2,665       2,861        7.4%
Consolidated net profit1) 2)                  1,640       2,091       27.5%
Basic earnings per share1) (in euros)          1.36        1.73       27.5%
Diluted earnings per share1) (in euros)        1.30        1.66       27.7%




Divisional revenues for 2013



                                       Share of           Share of

                                          total              total  Change
in million euros                2012   revenues    2013   revenues    in %
MAIL                          13,972      25.2%  14,452      26.2%    3.4%
EXPRESS                       12,778      23.0%  12,712      23.1%   -0.5%
GLOBAL FORWARDING, FREIGHT    15,666      28.2%  14,838      26.9%   -5.3%
SUPPLY CHAIN                  14,340      25.8%  14,277      25.9%   -0.4%
Corporate Center / Other and  -1,244        n/a  -1,194        n/a    4.0%
consolidation
Consolidated revenues         55,512       100%  55,085       100%   -0.8%




Divisional EBIT for 20131)



                                                                    Change
in million euros                       2012           2013            in %
MAIL                                  1,048          1,226           17.0%
DHL                                   2,042          2,057            0.7%
- EXPRESS                             1,110          1,133            2.1%
- GLOBAL FORWARDING, FREIGHT            514            483           -6.0%
- SUPPLY CHAIN                          419            441            5.3%
Corporate Center / Other and           -426           -422            0.9%
consolidation
Consolidated EBIT                     2,665          2,861            7.4%






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

Group financial highlights for the fourth quarter of 2013



                                     Fourth quarter Fourth quarter   Change
in million euros                              2012           2013      in %
Revenues                                    14,577         14,494     -0.6%
- of which international                    10,048          9,885     -1.6%
Profit from operating activities               827            885      7.0%
(EBIT)
Consolidated net profit1) 2)                   538            772     43.5%
Basic earnings per share1) (in                0.45           0.64     43.5%
euros)
Diluted earnings per share1) (in              0.39           0.61     56.4%
euros)




Divisional revenues for the fourth quarter of 2013 



                                  Share of               Share of
                          Fourth                 Fourth
                         quarter     total      quarter     total    Change
in million euros            2012  revenues         2013  revenues      in %
MAIL                       3,851     26.4%        3,968     27.4%      3.0%
EXPRESS                    3,342     22.9%        3,326     22.9%     -0.5%
GLOBAL FORWARDING,         3,989     27.4%        3,789     26.1%     -5.0%
FREIGHT
SUPPLY CHAIN               3,733     25.6%        3,712     25.6%     -0.6%
Corporate Center /          -338       n/a         -301       n/a     10.9%
Other and
consolidation
Consolidated              14,577      100%       14,494      100%     -0.6%
revenues




Divisional EBIT for the fourth quarter of 20131)



                                Fourth quarter    Fourth quarter    Change
in million euros                          2012              2013      in %
MAIL                                       372               360     -3.2%
DHL                                        562               637     13.3%
- EXPRESS                                  280               320     14.3%
- GLOBAL FORWARDING, FREIGHT               167               139    -16.8%
- SUPPLY CHAIN                             116               178     53.4%
Corporate Center / Other and              -108              -112     -3.7%
consolidation
Consolidated EBIT                          827               885      7.0%






1) Prior-year mounts 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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