Deutsche Post World Net today announced “solid” results for 2006 and forecast a slight rise inrevenue and EBIT for 2007. The company also proposed a dividend increase to 75 cents.
“Our good operating performance in 2006 – particularly in the fourth quarter – shows that ourstrategy of internationalisation is bearing fruit,” said the Group’s Chairman and Chief ExecutiveOfficer Klaus Zumwinkel said in a statement released at the annual results press conference. “Wealready generate some 60% of our revenues abroad and more than half of our operating profit withservices outside the MAIL division.”
The integration of the British logistics group Exel, with its 110,000 employees, proceededsmoothly in the year under review and BHW was integrated earlier than planned. Zumwinkel said:“What we have achieved with Exel represents the largest integration in our industry and, whenconsidered together with BHW, the largest in our corporate history. This was all managed mostsuccessfully – a fact clearly reflected in the numbers.” With the acquisition of Williams Lea, theGroup also expanded the value-added services offered by the MAIL Division.
This platform will be further reinforced by the “First Choice” corporate initiative, rolledout at the beginning of 2007, DPWN said. “First Choice” will comprise more than 5,000 projectsGroup-wide over the next two years; these should decisively contribute to meeting the targets setfor 2009.
In order to secure jobs in Germany in the future, further steps toward the liberalization ofthe mail market must be taken reasonably and with a sense of responsibility, DPWN stated. “We areconcerned about the political framework for the full opening of Germany’s mail market,” saidZumwinkel.
The current situation, where there is no agreement on a harmonized liberalization throughoutEurope and where nothing stands in the way of competitors pursuing a strategy of wage dumping, runscontrary to the practice of fair competition. “Deutsche Post will continue to ensure universalservice throughout Germany,” Zumwinkel promised.
In fiscal 2006, DPWN operating profit (EBIT) rose by 2.9%, from 3.76 billion EUR to 3.87billion EUR, including the one-time gains communicated. Consolidated revenue grew by 35.8% to 60.55billion EUR. Consolidated net profit declined by 14.3% to 1.92 billion EUR, primarily attributableto Deutsche Post World Net cutting back its Postbank holding in the past fiscal year to 50% plusone share. Earnings per share fell by 19.6% to 1.60 EUR.
In the MAIL Division, the Group was able to more than offset the expected decline in revenuein its home market through growth at its international business. Following an encouragingly strongfourth quarter, revenue grew by 3.2% to 13.29 billion EUR.EBIT grew slightly from 2.03 billion EURto 2.05 billion EUR, facilitated in part by successful cost management.
The EXPRESS Division increased its revenue by 2.2% to 17.2 billion EUR. After initiating theturnaround in the U.S. in the second half, EXPRESS generated EBIT of 325 million EUR in the yearunder review. In 2005, the division booked losses of 23 million EUR.
LOGISTICS was able to increase its revenue even more than expected in the year under review.Revenue more than doubled to 22.74 billion EUR, a figure all three business units contributed towith sustained organic growth. Acquisition effects came to 11.64 billion EUR, of which the largestshare was from the purchase of Exel. EBIT advanced to 762 million EUR from 346 million EUR.
The EBIT at the FINANCIAL SERVICES Division, stemming largely from Postbank, rose in thecourse of 2006 from 863 million EUR to 1 billion EUR for the first time.
For the current year, Deutsche Post World Net expects an overall positive businessdevelopment with a slight increase in sales. EBIT should reach at least 3.6 billion EUR. Thiscorresponds to an increase of at least 3% from the comparable basis of the previous year, whenone-time gains had a positive effect on earnings. These included the exercise of the exchangeablebonds on Postbank shares as well as the related sale of Deutsche Postbank shares (totaling 276million EUR).
Stable to slightly higher revenue is expected at the MAIL Division. The Group expects thatthe other business units will more than offset revenue losses in the domestic mail business. EBITshould remain stable, at 2 billion EUR. 2007 EBIT of more than 500 million EUR is forecast for theEXPRESS Division, not including the extraordinary effects of setting up the new hub in Leipzig.Including these expenses, EBIT should be at least 400 million EUR.
In LOGISTICS, the Group expects high single-digit percentage growth in revenue for 2007. EBITshould increase by around 15%. In the FINANCIAL SERVICES Division, revenue is forecast to rise,driven in part by the steady increase in contributions from BHW. The Group expects that EBIT forFINANCIAL SERVICES, including extraordinary expenses of about 100 million EUR, will climb by atleast 5%.
