Deutsche Post World Net (DPWN) announced today that it saw a double-digit increase in group revenueand earnings in the third quarter, mostly driven by strong logistics and financial services
results.The group’s consolidated revenue rose by 35% to EUR 14.887 billion in the period. Theintegration of logistics service provider Exel and financial service provider BHW as well asorganic growth drove this increase. The company now generates 59% of total revenue outside Germany.
Profit from operating activities (EBIT) rose by 40.1% to EUR 1.03 billion, including theexpected income of EUR 276 million from calling the exchangeable bond on Postbank stock in Julyprior to maturity. Consolidated net profit improved by 30.3% to EUR 537 million in the thirdquarter of 2006. Earnings per share increased to 45 euro cents in the third quarter of 2006 from 37euro cents in the year-earlier period.
In the first nine months of the year, DPWN posted 36% higher revenues of EUR 44.190 billioneuros, including around EUR 10.2 billion from acquisitions. EBIT rose by 7.5% to EUR 2.588 billion.
“On the whole, the company is doing well: Logistics and Postbank continue to postexceptionally strong performance and have made rapid progress with respect to integration. At thebank we were even able to finalize the process earlier than planned,” said Chief Financial OfficerEdgar Ernst. “The Mail and Express divisions, which both suffered a drop in earnings in the secondquarter, posted higher profits again in the third quarter. In view of the traditionally strongChristmas quarter, I am very confident for the remaining weeks of the year.”
Following a positive third quarter, the Mail division increased its revenues in the firstnine months by 2.3% to EUR 9.64 billion, while operating profit was slightly down by 3.3% to EUR1.45 billion. The mail and document service provider Williams Lea has been included in the Group’sMail International and Value-added Services business since April 1. This raised the share of Mailrevenues generated outside Germany to 20.5%. International operations thus more than compensatedfor the expected decline in domestic revenue. Compared to the year before, the first nine monthswere one working day shorter.
In the first nine months of the year, revenue from the Express division rose by 2.4% to EUR12.96 billion. The Asia Pacific and Emerging Markets regions, in particular, contributed to thegrowth in revenue with double-digit increases. EBIT fell from EUR 217 million in the previous yearto EUR 91 million. In the third quarter, however, the division saw marked improvements. Operatingprofit increased by EUR 106 million year-on-year and by EUR 44 million compared to the secondquarter of 2006. The Americas region was able to continue its positive development from the secondquarter into the seasonally weak third quarter. After having significantly improved service qualityin the United States, the company is increasingly able to acquire new business at better rates.
The Logistics division, including Exel since the start of 2006, continued to develop well interms of integration, performance and growth, DPWN said. Revenue in the first nine months of 2006added up to EUR 16.01 billion. In the previous year, revenue was EUR 6.60 billion. All threebusiness units – DHL Exel Supply Chain, DHL Global Forwarding and since July 1, DHL Freight –contributed with sustained organic growth. Acquisitions contributed EUR 8.61 billion to revenue.EBIT for the Logistics division reached EUR 513 million in the first nine months after EUR 244million in the year-earlier period.
The Financial Services division, consisting mainly of Postbank, generated revenue and incomefrom banking transactions of EUR 7.09 billion in the first nine months, an increase of 35.3 %. EBITincreased by 5.1 % to EUR 702 million. The new Services division, including areas such asProcurement, IT, Finance Operations, Real Estate and Global Customer Solutions, had nine-monthrevenues of EUR 3.45 billion and an operating loss of EUR 134 million.
In its full-year 2006 outlook, DPWN said that it is expecting group revenue of a good EUR 60billion and EBIT of around EUR 3.9 billion. For the Mail division, DPWN expects stable to slightlyincreasing revenue and EBIT of around EUR 2 billion for 2006 as a whole.
It has adjusted the full-year forecasts for Logistics, Express and Financial Services toaccount for positive developments in the logistics business and at Postbank, as well as therelocation of the European road transport business from Express to Logistics as of July 1, 2006.
In the Express division (excluding DHL Freight), it anticipates EBIT between EUR 300 millionand EUR 400 million in 2006. This EBIT figure includes, among other things, the option to recognizeone-time expenses for network optimization in Europe, which the new management is currentlyinvestigating.
The Logistics division is now expected to generate revenue of well over EUR 20 billion, withEBIT of at least EUR 750 million. The Financial Services division is expected to post adouble-digit rise to EBIT of at least EUR 950 million.
