deutsche post dhl commerzbank german investment seminar ... · commerzbank german investment...
TRANSCRIPT
Deutsche Post DHLCommerzbank German Investment Seminar
Lawrence Rosen, CFONew York, January 13-15, 2014
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Agenda
2
Strategy 2015: Towards sustainable growth 1
Structural trends lend support2
3
Appendix4
Divisional highlights and roadmaps
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 3
1) Underlying EBIT
DHL
Corporate Centre/Other
• EBIT stable at a minimum of EUR 1bn
• Improvement to EUR -350m by 2015
1.72.0
2010 2011 2015
2.7 – 2.9
2014
CAGR 13 - 15%
1.451)
20132012
Group EBIT of EUR 3.35 bn to 3.55 bn in 2015
– DHL EBIT, in EUR bn –
2.0-2.15
Strategy 2015: Mid term EBIT targets
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Strategy 2015: All divisions have a clear roadmap
4
• Generate profitable growth based on industry expertise in outsourcing and emerging markets
• Sustainably stabilize EBITby improving efficiency and investing in growth in the parcel business and in new markets
• Transform business model(Transformation/NFE) and drivesustainable growth in difficult marketenvironment
• Increase market share by expandingnetwork and services while improving margins
Divisional priorities
Growththrough
Excellence
MAILStrategy 2015
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Mid-term EBIT Targets: EUR 3.35–3.55bn Group EBIT in 2015Confirmed and on track
5
DHL: EBIT CAGR of 13–15% CAGR of 15.3%1) in 2010–2012
MAIL: EBIT stabilization at min. EUR 1bn Fully delivered in 2010–2012
EXPRESS
FORWARDING, FREIGHT
SUPPLY CHAIN
• Ongoing capacity and service quality investments weight on 2012 margins as expected
• Margin acceleration expected in 2013
• Focus on Contract Lifecycle Management and more integrated solutions delivered steady margin improvement
• Excl. NFE implementation costs, EBIT margin expansion would have been even greater
• NFE implementation intensifying, increase in NFE-related operational expenses expected in 2013
8.7%7.8%
3.3%2.9%2.8%
20122011
2.1%
20103)
2.7% 2.9%
DHL margin improvements on track
7.8%2)7.0%
1) 2012 EBIT excl. EUR 113m one-off items from VAT, restructuring provision release and disposal gain in Q2 2012; CAGR of 18.6% based on reported 2012 EBIT2) EXPRESS FY2012 margin excl. EUR 113m one-off items from VAT, restructuring provision release and disposal gain in Q2 2012 3) FY2010 margins excl. non-recurring items (restructuring)
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Q3 2013 Highlights
6
2013 guidance confirmed: Group EBIT of EUR 2.75 – 3.0bn
Key growth drivers remain intact despite still soft macroeconomic environment
• TDI and Parcel achieve further solid volume growth
• Delivering on MAIL EBIT stabilization
• DHL Express showing expected margin acceleration
• Sustained focus on cost and cash management and execution of key strategic projects
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Full-year 2013 Guidance
7
2013 Guidance confirmed
Group
DHL divisions
Corp. Center/ Other
EBIT
Free Cash Flow
EUR 2.75 – 3.0bn
EUR 1.15 – 1.25bn
EUR 2.00 – 2.15bn
~ EUR -400m
Free Cash Flow To at least cover 2012 dividend
• Gross Capex of around EUR 1.7bn
• Net income growth to exceed operating profit growth
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Operating Cash Flow Trend
8
1) Q2 2012: excl. EUR -21m effect from VAT settlement;2) Q3 2012: excl. EUR -300m effect from VAT settlement;3) Q4 2012: excl. EUR -1,986m Pension funding;
On track to achieve full year cash flow target
1,3573)
1,262
Q4Q3
8128682)826
Q2
501
2361)317
Q1
120
-357
-34
20122013
2011
in EUR m
Operating Cash Flow
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Free Cash Flow Outlook
Major drivers
EBITIn line with 2015 guidance: Group EBIT up to EUR 3.35–3.55bn
Changes in provisions Utilization of restructuring provisions tailing off,pension payments declining slowly
Changes in W/C Increasing as business grows but strong focus on working capital management
Income taxes paid To increase driven by EBIT growth
Net Capex Normalization from current expected gross levels of around EUR 1.7bn in 2013
Net M&A No need or ambition for major M&A
Free Cash Flow EBIT increase to drive strong FCF performance
9
Multiple levers to drive FCF improvement over the next years
Expected Trend from 2013 onwards
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Finance Policy
10
• Dividend payout ratio to remain between 40–60% of net profit (continuity and Cash Flow position considered)
• Excess liquidity will be used for– Share buybacks and/or extraordinary dividends– Stepwise pension funding
Target / maintain rating BBB+
1) €0,60/ €0,65/ €0,70 per share for the years 2009, 2010, 2011
External cash usage
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Agenda
11
Strategy 2015: Towards sustainable growth1
Structural trends lend support2
Divisional highlights and roadmaps3
Appendix4
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 12
Global TDI leadership with key strengths in growth markets
Express Forwarding Supply Chain
Revenue1): EUR bn
LATAM, MEAAsia Pacific
12.4
2009 2012
9.6
24%13%
32%
15%+13%
+20%
CAGR +9%
Global No. 1 in air freight, No. 2 in ocean freight
Revenue1): EUR bn
11.4
2009 2012
7.8
26%12%
26%
15%+23%
+14%
CAGR +14%
Market leader in contract logistics in Asia and Latin America
Revenue1): EUR bn
14.2
2009 2012
12.0
7%6%
11%
+14%
+21%
CAGR +6%
Structural trend “Emerging Markets”:DHL building on global footprint and leadership
Emerging Markets drive growth across DHL Divisions
8%
1) Based on external 3rd party revenue, region according to customer invoice
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Structural trend “E-Commerce”:Key growth driver for Parcel business in Germany intact
• Average reported volume growth of 9.3% in Q1 2010 – Q3 2013 • Quarterly yoy growth rates ranging from 6% to 14%
1313
+8.7% +8.7%
184
Q2
237218
194181
Q1
249234206
188
+6.4%
Q4
284265
239
Q3
238219205
2013201220112010
Parcel volumes, in million pieces, 2010 – 2013 by quarter
New innovative services of PARCEL support e-commerce growth
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Structural trend “E-Commerce”: Strong growth driver in Germany and beyond
14
Sustained e-commerce boom in Germany
Parcel volume CAGR over 9% for past 3 years0.5m more parcels/day delivered in ‘12 than ‘11
Cross-border services
DHL Express TDI service used for time-critical B2C shipments
New DHL Easy Return service for EU-based online retailers (launch in Sept. 2012 by DHL Global Mail)
Global E-Fulfillment solutions
End-to-end services from Webshop todelivery (offered by DHL Supply Chain)• Solutions in place for more than 60 topglobal brands
Continued investment to drive future growth:• Double-digit million investment in largest
parcel center in Obertshausen• Expansion of the Packstation network -
9% capacity increase by YE 2013• Expanding FMCG1) same-day delivery
pilots into new regions• 20,000 new Paketshops announced,
increasing flexible drop-off options
DHL Global Mail fulfills less time-sensitive international delivery
1) Fast Moving Consumer Goods
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Agenda
15
Strategy 2015: Towards sustainable growth
Structural trends support our growth2
Divisional highlights and roadmaps3
Appendix4
1
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Highlights MAIL Q3 2013
16
m units
m units
• Continuation of Parcel growth (+7.0% per working day) driven by e-commerce
• Mail Communication volumes supported by one additional working day (volume per wd: +2.6%) as well as shift effects from discontinuation of product Infobrief (Dialogue Marketing). Underlying decline in line with mid-term expectations
Parcel volumes
Mail Communication volumes
Milestones
Confirmation of trends: ongoing strong Parcel growth while Mail volumes are supported by transitory effects
237234
Q2 12Q1 12
218 249219284
+8.7%
238
Q3 13Q3 12 Q4 12 Q1 13 Q2 13
1,8182,024
Q2 12Q1 12
1,780 2,0531,790 1,984
+4.2%
1,865
Q3 13Q3 12 Q4 12 Q1 13 Q2 13
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
• Limited Mail volume decline as expected – potential future decline is also limited vs. other markets as German addressed mail items per capita are already low1)
MAIL: Parcel growth counters letter mail decline
17
1) UPU postal statistics database, regulatory authorities, Ofcom analysis
2) As reported: aggregation of business segments Mail Communication, Dialogue Marketing and Press Services
650
347340270213
529
264261218200
USUKNLFRGER
2009
2011
25%Parcel
61%Letter1)
12%
GlobalMail
20%
Parcel
67%Letter1)
12%GlobalMail
Other / Consolidation2%
Other / Consolidation1%
Mail Division Revenue Mix9M 2010 9M 2013
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
MAIL: Proposed Letter Pricing RegulationNew Price Cap May Be Revised to CPI-0.2%
18
Revised price cap regime offering more potential to partially offset factor cost inflation
• Proposed price cap of Federal Network Agency1)
– Formula: x-factor reduced from 0.6 to 0.2%– Regulation valid until Dec 31, 2018– Allowing potential average price increase of 1.6%
on Jan 1, 20142)
Directly impacted Mail revenues of EUR 3.3bn3)
1) Federal Network Agency = Bundesnetzagentur; CPI = German Consumer Price Index 2) 1.6% = 1.8% inflation rate minus 0.2% x-factor; based on arithmetic average of the monthly CPI values for reference period from July 2012 - June 2013: 1.6% price increase applicable based on weighted average across the relevant Mail product portfolio as per price-cap regulation; 3) 2012 revenues affected subject to price-cap regime
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Highlights EXPRESS Q3 2013
19
Time Definite International (TDI) –Shipments per day ‘000s
Time Definite International (TDI) –Revenues per day1) in EUR m
1) Currency translation impacts are eliminated. Hence, 2012 and 2013 data are aggregated with the same currency rate
Strong performance of global TDI network continues
• Continued strong TDI volume growth, with all regions above market: Europe +6.3%; Americas +5.4%; APAC +9.9%; MEA +10.4%
• Customer and product mix continues to result in lower Revenue per Day increase than Shipments per Day
• Volume increase as well as progress in ground and air costs per shipment drive margin improvement
Milestones
Q2 13
649+8.0%
Q3 13
621
Q1 13
618
Q4 12
643
Q3 12
575
Q2 12
602
Q1 12
564
Q2 12Q1 12 Q3 12
36.5 34.2
+6.7%
Q3 13
31.9
Q2 13
35.1
Q1 13
32.8
Q4 12
35.037.1
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 20
Keep executing our successful strategy
On track towards 2015 targets driven by organic growth, operating leverage as well as direct and indirect cost management
MotivatedPeople
Great Service Quality
QCC
LoyalCustomers
ProfitableNetwork
10% margin by 2015
CIS program is a key success factor enabling
our employees to deliver the best
performance for our customers
Focus on the best service for our TDI customers driving industry-leading volume growth
Insanely customer centric, supported by strengthening brand
awareness
Strict discipline on pricing tools / principles
Virtual airline balances service quality,
planning flexibility and operating costs
Focus on costs and cash generation
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 21
sed Financial Management
Gross Profit Triangle
1. Profitable GrowthRevenue per Day (RpD)Shipment per Day (SpD)
Revenue per Shipment (RpS)Weight per Shipment (WpS)
Revenue per Kilo (RpK)
Topline / Revenue Management
Direct Cost Management
3. Efficiency in Ground OperationsReduce Operations Cost per Move (OCPM) by 2.5% yoy in 2013
5. Cash Management
Direct Cost Management
2. Leverage Aviation NetworkReduce Cost per Kilo (CpK) by 1.5% yoy in 2013
4. Reduce Indirect Cost Share of Revenue
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
HighlightsDHL Express Delivering on Margin Acceleration
22
1) Q1 2013 excl. EUR +12m positive effect from disposal gain; 2) Q2 2012 excl. EUR +113m net positive effect from VAT settlement, disposal gain and release of restructuring provision
7.7%7.8%
Q4
8.4%7.9%
Q3
8.5%
7.3%7.4%
Q2
9.1%
7.8%2)8.3%
Q1
8.0%1)
20122013
2011
Q3 margin up 120 bp yoy to 8.5%
DHL Express, EBIT Margin, by quarter, Q1 2011 – Q3 2013
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Highlights GLOBAL FORWARDING, FREIGHT Q3 2013
23
• Volume trends reflect weak demand frommultinational customers of Engineering & Manufacturing and Technology sectors, continuing shift from AFR to OFR, lower weights per shipment and selective strategy
• No major peak season effect to date in OFR• GP margins down in AFR reflecting selling
rate pressures. Higher share of controlled volumes drives slightly higher OFR margin
• NFE implementation on track – project costs slightly up yoy in Q3
Ocean freight ‘000s TEU1)
Air freight ‘000s Tons
Milestones
1) Twenty Foot Equivalent Unit; Q1 2013 TEUs adjusted
Persisting weak volume development
709672
Q2 12Q1 12
716 658751 701
-2.4%
733
Q3 13Q3 12 Q4 12 Q1 13 Q2 13
986992
Q2 12Q1 12
1,046 9331,039 1,070-5.3%
984
Q3 13Q3 12 Q4 12 Q1 13 Q2 13
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
FORWARDING: Executing our planned transformationUpdate on New Forwarding Environment (NFE)
24
• Modular state-of-the-art IT platform
• Standardized processes on a global scale
• Centralized back office support (Global Service Centers)
Changing the future of FORWARDING
We have a clear vision …More customer intimacy
Improved end-to-end transparency
Increased productivity
… and implementation is on track Functionality: pilot country indicatesnew process landscape will deliver expected improvements
Timing: in line with plans
Costs: lower than expected in 2013, mainly based on savings from project mgmt
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Highlights SUPPLY CHAIN Q3 2013
25
• APMEA1) continues to show the strongest regional revenue growth; Europe soft
• New business wins of EUR 350m demonstrate robust business model. Fastest growth seen in Automotive and Life Sciences & Healthcare. Technology also exhibits good growth
• Attractive revenue and gross profit profile of new signings
New business gains continue strong development
Revenue by sector Q3 2013
10%
9%
18%
24%
Technology12%
Life Sciences &Healthcare
Consumer
20%
Retail
Others
4%Williams Lea
Energy3%
Automotive
Milestones
1) Asia-Pacific, Middle-East and Africa
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 26
Identify, standardize and growglobal products and solutions• Co-Packing• Lead Logistics Provider• Technical Service• Airline Business Solutions• Life Sciences & HC platform
Continuous improvement across the entire contract lifecycle• Project selection• Design• Execution• Price / risk discipline
Sector Focus
Differentiate through sector-specific solutions• Global expert communities• Be the competent partner
for outsourcing in target sectors
• Leverage DHL customer contacts and brand
SUPPLY CHAIN: Strategic programs in place delivering margin improvement and further growth
Standardization & Replication
Contract Lifecycle Management
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Supply Chain: Leveraging our international leadershipGlobal reach supports profitable growth track
27
Driving record level of new business wins YTD in 2013Order intake, in EUR m
• Global reach combined with replicable supply chain solutions
• Targeting new international clients with clear benefits of outsourcing and increasing penetration of existing customers
Undisputed global leader with presence in over 60 countries worldwide
9M
290
810
1,130
Q3
350
Q2
350
Q1
330430
190
20122013
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Wrap Up: Focus on executionConfirmation of 2013 guidance and mid-term targets
28
• Focus on cost and cash management in volatile environment
• Continue TDI growth and Express margin improvement
• Actively drive MAIL Division shift towards growing Parcel markets
• Keep working on and implementing our key strategic projects
• Confirmation of 2013 and mid-term guidance
Key priorities remain unchanged
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Agenda
29
Strategy 2015: Towards sustainable growth
Structural trends lend support2
Divisional highlights and roadmaps 3
Appendix4
1
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Deutsche Post DHL at a Glance
30
1) Average FTEs FY 2012
The postal service for Germany
Domestic German Mail and Parcel
Sales: EUR 13,972m EBIT: EUR 1,051mEmpl.1): 146,923
The logistics company for the world
International and Domestic Express
Sales: EUR 12,778m EBIT: EUR 1,108mEmpl.1): 84,623
Global Air, Ocean and Road Freight
Sales: EUR 15,666m EBIT: EUR 512mEmpl.1): 43,590
Global Supply Chain Solutions
Sales: EUR 14,340mEBIT: EUR 416mEmpl.1): 140,193
Corporate Center / Other: Sales: EUR 1,203m; EBIT: EUR -422m
2012 key figures Group: Sales: EUR 55,512m; EBIT: EUR 2,665m; Employees1): 428,287
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Group P&L Q3 2013
31
• Revenue decrease due to adverse FX effects and lower forwarding volumes. Organic growth in group revenue was 3.4%
• Group EBIT increase despite significant FX headwind and continued subdued economic environment
• MAIL EBIT performance supported by solid business development esp. in Mail Communication and Parcel Germany
• DHL EBIT growth mainly reflects continued strong volume and margin performance in Express
• Higher taxes yoy due to stronger EBIT and exceptionally low tax rate in Q3 2012
• Despite slightly higher taxes, good EBIT development drives 5.8% EPS growth
Q3 Group EBIT increased by 7%
1) Attributable to Deutsche Post AG shareholders
2) Undiluted, growth rate based on non-rounded numbers
EUR m Q3
2012Q3
2013 Change
Revenue 13,839 13,498 -2.5%
EBIT 604 646 +7.0%
t/o MAIL 246 261 +6.1%
t/o DHL 463 489 +5.6%
Financial result -107 -98 +8.4%
Taxes -86 -121 -40.7%Consolidated net profit1) 377 399 +5.8%
EPS2) (in EUR) 0.31 0.33 +5.8%
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Free Cash Flow Q3 2013
32
Strong cash flow generation again in Q3
EUR m
Reported Q3
2012
VAT payment effects in Q3 2012
Q3 excl. VAT
2012
ReportedQ3
2013Cash from operating activities before changes in Working Capital
632 632 675
Changes in Working Capital -64 +300 236 137
Net cash from operating activities after changes in Working Capital
568 +300 868 812
Net Capex -385 -385 -347
Net M&A -20 -20 -13
Net Interest -168 +155 -13 -22
Free Cash Flow -5 +455 450 430
• Reported Cash Flow comparison impacted by VAT payment in Q3 12
• Strong Operating Cash Flow of EUR 812m although down yoy due to lower seasonal working capital decline, mainly in Forwarding
• Capex spend below last year's level due to timing effects
• FFO/Debt at 31.4% (year-end 2012: 30.5%)
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 33
Free Cash Flow drives net debt improvement of EUR 354m in Q3in EUR m
Net debt(Dec 31 2012)
OCF beforechange in
W/C
Changesin W/C
-1,952
Net Capex
-670
-811
-192
Net dividend
-934
Net debt(Sep 30,
2013)
-2,456
Other effects1)
2,103
Net Debt (-)/Liquidity (+)
Net debt (June 30,
2013)
-2,810
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 34
Bond maturity structure
1) With two additional extension options of one year each 2) Convertible bond – assuming no conversion before 2019
Target Financing Structure in Place
2024
700
2023
500
2022
500
20212020
300
2019
1,000
2018
500
2017
750
201620152014
9262)
4.875%1.875% 1.50%
0.60% 1.875%2.95% 2.75%
2.875%
Issue VolumeEarly refinancing of 2014 maturity Coupon
• EUR 1bn issued via two conventional bonds in the amount of EUR 500m each in Sep:– 5-year term, coupon of 1.5% p.a. – 10-year term, coupon of 2.75% p.a. – Refinancing EUR 0.9bn bond due Jan 2014 (10–year term, coupon 4.875%)
• Five-year EUR 2bn syndicated loan facility agreed in 2010 renewed ahead of schedule until 20181) – with significantly reduced annual commitment fee and lower margin
Taken advantage of attractive market conditions
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Balance sheet impact of IAS 19R implementation
35
5,018
9,758
Net Pension Provision
Unrecognized gains/losses
Plan assets
June 30, 2013as reported under IAS 19R
4,751
9,582
Dec 31, 2012as reported under IAS 19
1,908
3,082
9,758
in EURm
Total Defined Benefit
Obligation EUR 14,748m
IAS 19R implementation as of Jan 1, 2013
• Restated 2012 balance sheet: – Net pension provision increased
by EUR 3.1bn
– Equity reduced by EUR 3.0bn
(Difference mainly due to tax effects)
• Q3 2013 development:– Re-measurement of pension
provision and increase of total defined benefit obligation due to marginally lower discount rates (GBP)1)
– Plan assets development reflects investment return, forex effects as well as pension payments
• No cash impact from accounting change to IAS19R
Highlights
unrecog-nized gains/losses included within net pension provisions
Dec 31, 2012as restated under IAS 19R
Total Defined Benefit
Obligation EUR 14,776m
Total Defined Benefit
Obligation EUR 14,333m
Total Defined Benefit
Obligation EUR 14,587m
4,814
9,773
Sept 30, 2013as reported under IAS 19R
1) EUR: 3.75%, CHF: 2.00%, GBP: 4.50%, USD: 5.00%
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Cash conversion
36
DHL
1998–2007 2014–20152011–20132008–2010
Level of M&A
Level of Capex
Restr. cash requirement
DPDHL transitioning to high Cash Flow generation
EBIT Performance
Special factors
StableStable
Strong improvement
High, but decreasing
Improving
Average
Very high
Low
State aid (–)
Low
Very low
Very high
State aid (+)Postbank sale (+)
High
Very low
Low
State aid (–)VAT (–)
Average
Very low
Very low
State aid (+) ?
High, but decreasing
HighLow
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
• Revenue gain driven by stamp price increase, one additional working day as well as small benefit from elections
• Wage increase of 3.1% as of Aug. 1 restrains EBIT development. Small operational increase boosted by absence of Neckermann charge (EUR 10m) in Q3 2012.
• Operating cash flow up yoy, also after adjusting for EUR -269m impact from VAT settlement in Q3 2012
• Capex down yoy due to timing effects, parcel network upgrade and corresponding IT investments continue to be the main investments areas
EBIT increases as additional working day, stamp price increase and business development offset cost increase in Q3
MAIL – Divisional Results Q3 2013
37
Q1 Q2 Q3 Q4-3 +1 +1 0
yoy working days in Germany
EUR m Q3
2012Q3
2013 Change
Revenue 3,276 3,439 +5.0%
EBIT 246 261 +6.1%
Operating Cash Flow -56 227 n.a.
Capex 98 63 -35.7%
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Parcel Germany: Strategic Focus
38
• DPDHL only postal organization world-wide to offer nation-wide 24/7 access to all shipping needs– 13,500 retail outlets
– 1,000 Parcel Boxes for 24/7 drop-off
– 2,500 automatic PACKSTATIONs to drop-off, frank, or use as delivery address
– Online Franking of all parcel products
– iPhone and Android apps for all services
– Pilot project Paketkasten – personal parcel lockers
• To date 2mn registered PACKSTATIONcustomers
• 83% check whether vendor ships to PACKSTATION before purchase
• 36% increase their online spend after registration for PACKSTATION
• Target group in age segment 25–50 years with high online affinity
Parcel Germany is shaping eCommerce as the leading service provider
Source: Europäisches Handelsinstitut
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
With DHL Parcel we are shaping a dynamically growing market environment
39
50
32
+5% p.a.
2011
2020
= 32 bn €
20
8
+11% p.a.
• Convenience as a key driver for e-commerce:– 3 out of 4 online shoppers believe
e-commerce has improved their quality of life– Over 40% claim they save time
German parcel market:growth of 5-7% p.a. until 2015
• B2C growth 11-13% p.a. by e-commerce adoption independent of GDP development
• B2B growth 3-5% p.a.depending on GDP and export development
... and is driving parcel volumes
E-commerce salesEUR billions1)
Share of retail spendingPercent2)
1) Bundesverband des Versandhandels; 2) TNS Infratest und MRSC, “Einkaufen 4.0”, Gesellschaft für Konsumforschung
= 80 bn €
E-commerce is growing strongly ...
! We are profiting from a fast growing market
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Aim to increase market share and secure growth rates above market average
40
Target2015
5.0
10
1.5
2006
0.4
• Network upgrade “Paket 2012”
• DHL-Fulfillment
• DHL-checkout
Simplified services …
47 40
53
Other
Parcel
20152010
No. of registered customers … … will boost our B2C market share
… will help to grow our B2B market share
revenue increaseabove market growth
81 75OtherParcel
2015
20-25
2010
19
Millions Percent
Percent
DHL
20152010
55-60
! Parcel Germany is a solid growth story
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Distribution
DHL Parcel offers the entire eCommerce value chain for small and large vendors
Source: DHL Parcel
FulfillmentPaymentListing
• Online market place MeinPaket.de with 2,800 vendors and 10m buyable offers
• Among top 50 online shops in Germany by merchandise value
• More than 1.8mregistered customers after 3 years
DHL Parcel offers all steps in the eCommerce value chain
• PostPay as secure checkout procedure for vendors comp-arable to PayPal
• Broad acceptance of difference payment methods (credit card, invoice etc.)
• Over 200m EUR in turnover handled since launch in 2010
• B2C fulfillment in5 locations in Germany (Bremen, Staufenberg, Greven, Langenfeld, and Braunschweig)
• Warehousing and commissioning for large customers (HSE) and internet startups (fab.com, fashionID)
• Additional to standard parcel delivery up to 31.5 kg own 2-Man-Handling network capable of transpor-ting goods up to 100 kg and 4 cubic meters
• Mostly furniture and large household appliances
41
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 42
Working days Germany
2012 2013 2014 2015
Q1 64.2 61.6 62.2 62.2
Q2 59.3 60.3 59.3 59.3
H1 123.5 121.9 121.5 121.5
Q3 64.8 65.8 65.8 66
9M 188.3 187.7 187.3 187.5
Q4 60.2 60.2 60.9 63
H2 125 126 126.7 129
FY 248.5 247.9 248.2 250.5
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 43
Delivering further margin improvement
EXPRESS – Divisional Results Q3 2013
• Revenue growth was impeded above all by major negative currency effects. Up +5.1% organically driven by strong TDI growth
• EBIT up 13.9% yoy leading to an improved EBIT margin from 7.3% to 8.5%. This is driven by increased network utilization with core TDI volume reflected in improved OCPM and CpK1)
• Operating cash flow increased yoy due to increased profitability. Also some smaller base effects from Q3 2012
• Capex decline mainly due to phasing, regular network renewals and gradual upgrades ongoing
EUR m Q3
2012Q3
2013 Change
Revenue 3,172 3,112 -1.9%
EBIT 231 263 +13.9%Operating Cash Flow 332 422 +27.1%
Capex 141 109 -22.7%
1) OCPM = Operating Costs Per Move (ground costs); CpK = Costs per Kilogram (aviation costs)
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
EXPRESS: 2015 EBIT target and key levers
44
1. Leverage strength in fastest growing regions
2. Focus on TDI3)
3. Further improve customer satisfaction4. Continue investments in network
and service5. Leverage cross BU opportunities
6. Manage cost through operating leverage
7. Increase brand awareness
2015Renewal
2014Convergence
2013Margin
acceleration
2012Market share
growth
2011Invest for growth
2010 Business
stabilization
+13% – 15% CAGR
1) Underlying EBIT and before the transfer of Czech domestic business to DHL Freight; 2) Reported EBIT; 3) Time Definite International
EUR 785 m1)
EUR 916 m
EUR 288 m
EUR 497 m2)
EUR 1,108 m
+13 – 15% CAGR
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 45
Others29%
UPS3%
FedEx9% TNT
10%
DHL49%
Global [21,983 m€]
DHL32%
FedEx27%
UPS21%
TNT7%
Others13%
Europe [6,813 m€]
DHL41%
UPS23%
TNT14%
FedEx10%
Others12%
Americas [7,352 m€]Others3%
TNT1%
DHL16%
UPS30%
FedEx50%
Market share expansion continues across all regions
Asia Pacific [7,487 m€]
DHL40%
FedEx21%
UPS10%
TNT6%
Others23%
MEA [330 m€]
Source: MI study 2012, annual reports and desk researchAM: AR, BR, CA, CL, CO, CR, MX, PA, VE, US; EU: AT, BE, CH, CZ, DE, DK, ES, FR, IL, IT, NL, NO, PL, RU, SE, TR, UK; MEA: AE, ZA ; AP: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN
45
Market Position in TDI – Value Share (€)
4 ppt increase vs previous year
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
DHL Express volumes around the world benefit from leadership in Asian TDI markets
46
1
1 11
11
11
1
1
1
1
TDI leader (revenue) in all polled APAC markets1)Strongest exposure to Asian growth
>50% of global DHL TDI shipments
touch Asia
Inbound Asia
Outbound Asia
Intra-AsiaOthers
Break-down of DHL Express global shipments by origin/destination:
No market share data available
Market share data available
1 DHL Express TDI market position
1) Source: MI study 2012, annual reports and desk research; APAC: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN
1
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 47
Increasing TDI Revenue Share
58% 61% 63% 66% 69%
11%
9%
31% 28% 26% 24% 22%
0%
20%
40%
60%
80%
100%
2009 2010 2011 2012 H1 2013
Time Definite International (TDI) Revenue Share
Other Product Revenue Share (DDI, DDD, ACS etc.)
ProductsTDI – Time Definite InternationalTDD – Time Definite Domestic
Time Definite Domestic (TDD) Revenue Share
DDI – Day Definite International (only offered in 5 countries in EU)DDD – Day Definite DomesticACS – Air Capacity Sales
∑ 78%∑ 69% TDI+TDD
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
HighlightsKey Driver Express TDI Growth Intact
48
2009 2010 2011 2012 2013
450
650
350
550
600
400
500
Q2 Q3 Q4 Q1Q1 Q2Q2Q1 Q3 Q4 Q3Q2Q1 Q2 Q3Q4 Q1Q4Q3
SpD
in ‘0
00
DHL Express, TDI Shipments per Day (SpD)
Momentum continues with TDI volumes per day up +8.4% YTD
Investment in Network Expansion and Optimization
Margin Improvement
Economic Downturn & Business Stabilization
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 49
Active Customer Base and Classification
Customers(Revenue Share)
Revenue Growth Margin Sales Approach
104(~12%)
• Global weekly Tender Review Board • Sophisticated pricing and margin
tools • Win the ones we should & correct
“Walk Away’s” • Avoid RFQ’s / competitive bidding –
benchmarking preferred • Only concede on price if more
volumes offered• Euro 500m under review each
quarter
~440(~8%)
>410.000(~65%)
• Culture of “sell sell sell” • Global sales campaigns twice per
year• Sales process and call rate• Leaderboard visibility on country
growth rates
>2.200.00(~15%)
• Much more competitive rates for smaller customers
• No GPI on full tariff • Discounts for Ecom users & retail
outlets • PR oriented towards small customer
value added
GlobalCustomer
Multinational Customers
Direct Sales(Telesales, DM, Web, Physical Channels)
Field Sales (incl. Major &
Key Accounts)
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 50
Our Dedicated Fleet
138RegionalAircraft
90FeederAircraft
30IntercontAircraft
Youngest intercont fleet
in the Industry!
7 new aircraft in 2012
25 average aircraft age
3.5% reduction in CO2
output during 2012
+20 aged aircraft replaced;
727, DC8, A300
The only Helicopterexpress delivery service in the
World!
Global access to small
markets (Africa)
Growth enablers!
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 51
Balanced, “virtual airline” business model increases flexibility
Cost Position
Asset Intensity
Flexibility
Capacity Commitment
1) Commercial Air Linehaul
1)
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 52
Air Capacity Sales (ACS) – 4 Different Product Offerings
1 Block Space Agreement, guaranteed air cargo product.
2 Express TDI core product, capacity based on average utilization, adjusted on a daily basis
Total Spare Capacity (TSC), average capacity not utilised by Block Space or TDI Core on a planned basis. To be sold by air cargo product
3+4
CORE Flex & Air Capacity Sales Flex, a set amount of the Total Spare Capacity to be utilised for TDI core volume surge and/or air cargo filler traffic
4
Air cargo guaranteed, a set amount of the Total Spare Capacity guaranteed for priority traffic & key customers3
3 4
3+4
21
• More than ACS 500,000 bookings per year
• For DGF we improved from no. 8 in 2010 to the no. 3 supplier in 2012
• DGF is the biggest customer from DHL Aviation
• More than ACS 500,000 bookings per year
• For DGF we improved from no. 8 in 2010 to the no. 3 supplier in 2012
• DGF is the biggest customer from DHL Aviation
Selling air cargo space purely helps to offset aviation costs and is not a TDI product sold by the core sales team; DHL Global Forwarding (DGF) is the main customer
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
FORWARDING, FREIGHT – Divisional Results Q3 2013
53
• Revenue decline impacted by weak global volumes and adverse FX effects. Organic revenue decline of -2.5%
• EBIT up despite ongoing NFE costs and weak markets, driven by strict cost management and selective strategy
• Operating Cash Flow down due to temporarily higher DSO levels and very strong Q3 2012 level
Offsetting difficult market conditions with strict cost management
EUR m Q3
2012Q3
2013 Change
Revenue 4,018 3,712 -7.6%
EBIT 122 127 +4.1%Operating Cash Flow 246 106 -56.9%
Capex 31 30 -3.2%
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
GLOBAL FORWARDING, FREIGHT: 2015 EBIT target and key levers
54
201520112010
Volume & Gross Profit Improvement
Volume growth due to exposures to emerging markets
GP2) margin improvement due to enhanced IT (enhanced buying due to better transparency)
Cost Improvements
Productivity gains due to economies of scale
Indirect costs savings due to optimization of regional and country organizational structures
Efficiency gains due to new IT (NFE)
Road Freight
+13 – 15% CAGR
+13% – 15% CAGR
1) EBIT before the transfer of the Czech domestic business from DHL Express to DHL Freight
2) Gross Profit
EUR 383 m1)
EUR 440 m
2012
EUR 512 m
2013 2014
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Maximized profitability: GP on product level reflects our size advantage and product portfolio
55
• Performance benchmarking on product level is impacted by differences in accounting – key DGF competitors allocate value added services to AFR or OFR
• DGF has chosen to account for VAS separately under category called ‘Others’. This allows to measure true performance on product level
• When relevant VAS (customs, handling, cartage) are allocated to AFR & OFR to improve comparability, DGF’s GP margin is in line with peers
• GP margin in AFR benefits from DGF’s large scale, while OFR reflects its share of uncontrolled volumes
Gross Profit margin 2012(in %, Air Freight)
Gross Profit margin 2012(in %, Ocean Freight)
1) Including value-added services; Note: GP margin absolute level not fully comparable due to different revenue recognition principles across competitorsSource: Official company publications
20,2%22,6%24,6%
20,7%25,7%
DG
F
DG
Fco
mpa
rabl
e1)
17,6%20,7%
19,2%18.9%21%
DG
F
DG
Fco
mpa
rabl
e1)
What about fuel costs?Fuel costs have not a significant impact on DGF as they are passed through costs
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
SUPPLY CHAIN – Divisional Results Q3 2013
56
• Revenue decline driven by adverse FX effects, in particular GBP and USD. Organic growth continued to improve at +6.6%
• EBIT decline due to soft business conditions in Europe
• Operating cash flow stable supported by good working capital management
• Capex reflects continued investment in new contracts and selective growth infrastructure
EUR m Q3
2012Q3
2013 Change
Revenue 3,670 3,532 -3.8%
EBIT 110 100 -9.1%Operating Cash Flow 217 214 -1.4%
Capex 70 79 +12.9%
Contracts won – Annualized revenue
New gains 290 350
Financial performance impacted by FX translation effects
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
SUPPLY CHAIN: 2015 EBIT Target and Key Levers
57
2011
EUR 362m
2010 2015
EUR 272m1)
57
+13%–15% CAGR
1) EBIT excluding restructuring
Contract Lifecycle Management
Standardization & Replication
Sector Focus
EUR 416m
2012 2013 2014
+13 – 15% CAGR
Drive continuous improvement in project selection, design, execution and overall performance
Identify, leverage, and grow best practice globally
Differentiate with sector-specific solutions Leverage expertise to drive growth,
especially in first time outsourcing and Emerging Markets
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Structural trend “Simplifying industry solutions”DHL leads the growing Outsourced Contract Logistics market
58
Huge outsourcing market1) potential …
154
197
2015
1,121
924
2011
981
827
In house LogisticsOutsourced Contract Logistics
6.5%
2.8%
CAGR
1) DHL Supply Chain projection based on forecasts from IHS Global Insight and Transport Intelligence
EUR bn
Top 3 market shares, 2011
OtherLargest providers
88% ~12%
K+NCEVA
DSC
Largest providers
~12%
2.1%2.4%
7.7%
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Disclaimer
This presentation contains certain statements that are neither reported results nor other historical information. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Deutsche Post AG’s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. Deutsche Post AG does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation.This presentation does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor shall there be any sale, issuance or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law. Copies of this presentation and any documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from Australia, Canada or Japan or any other jurisdiction where to do so would be unlawful.This document represents the Company‘s judgment as of date of this presentation.
59
Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page
Investor Relations Contacts
60
Sarah Bowman• +1 212 381 3463 • E-mail: [email protected]
Sarah Bowman• +1 212 381 3463 • E-mail: [email protected]
Sebastian Slania• +49 228 182 63203• E-mail: [email protected]
Sebastian Slania• +49 228 182 63203• E-mail: [email protected]
Daniel Stengel• +49 228 182 63202• E-mail: [email protected]
Daniel Stengel• +49 228 182 63202• E-mail: [email protected]
Martin Ziegenbalg, Head of Investor Relations• +49 228 182 63000• E-mail: [email protected]
Martin Ziegenbalg, Head of Investor Relations• +49 228 182 63000• E-mail: [email protected]
Robert Schneider• +49 228 182 63201• E-mail: [email protected]
Robert Schneider• +49 228 182 63201• E-mail: [email protected]