Deutsche Post World Net successfully concluded the first half of 2007,boosting both revenue and EBIT. Consolidated revenue rose by 5.4 percent to 30.9 billion euros,fueled by the contributions of all divisions in the Group. EBIT increased by 9 percent to 1.7billion euros. Before non-recurring items, the increase totaled 12.4 percent.
The earnings growth was fueled by the LOGISTICS and EXPRESS divisions.“The LOGISTICS division continued its strong earnings growth, and the EXPRESS division made majorprogress,” Klaus Zumwinkel, the Chairman and Chief Executive Officer of Deutsche Post World Net,said at the half-year press conference in Bonn. For the entire year, the Group continues to expecta positive business development. “We can confirm our guidance that the underlying EBIT will totalat least 3.6 billion euros for the entire fiscal year of 2007,” Zumwinkel said.
During the first half, consolidated net profit after minorities totaled784 million euros, an increase of 7.1 percent over the same period last year. Earnings per sharewere 65 cents, compared with 61 cents. In the second quarter, consolidated net profit climbed 13.1percent to 285 million euros. Earnings per share rose to 24 cents from 21 cents, accordingly. Thus,growth of the consolidated net profit outpaced growth in revenue and EBIT. On a quarterly basis,revenue climbed 6.5 percent to 15.4 billion euros, and EBIT totaled 703 million euros, a jump of9.5 percent over the same period last year.
At the MAIL division, revenue increased by 1.3 percent to 7.5 billioneuros in the first half of the year. During the period, positive developments in the internationalbusiness once again more than offset the anticipated decline in domestic mail activities inGermany. EBIT in the MAIL division fell by 6.3 percent to 949 million euros. In addition to adecrease in work days, last year’s price reduction for packages had a negative impact on theresults. During the second quarter, the division was pleasantly able to stabilize its business:Cost-cutting and growth in international business lifted EBIT by 3.4 percent to 331 millioneuros.
During the first half of 2007, the EXPRESS division raised revenue by 2percent to 6.8 billion euros, thanks to volume growth in both the domestic and internationalbusiness. But because more than half of the revenue was generated in countries outside Europe, thedivision experienced negative currency effects of 223 million euros. In local currencies, organicrevenue growth of 6.2 percent was achieved. In Europe, the division boosted both revenue andshipping volumes. In the Americas region, revenue rose 3.6 percent in terms of local currency,driven once again by the strong business in Latin America. In the United States, higher income pershipment offset the economy-induced decline in volumes. In the Asia Pacific and EEMEA regions,revenue grew at double-digit levels as a result of strong shipping totals and higher shippingweights.
EBIT in the EXPRESS division reached 161 million euros, compared with19 million euros in the same period last year. Profitability improved considerably in allregions.
The LOGISTICS division continued to grow during the first six months ofthe year. Revenue climbed by 6.7 percent to 12.5 billion euros. Excluding negative currency effectsand inorganic factors like the sale of the waste-disposal company Vfw AG, revenue grew by 9.2percent. In the DHL Global Forwarding business unit, revenue remained stable at 4.5 billion eurosin the face of negative currency effects. At DHL Exel Supply Chain, the positive trend that startedin the first quarter continued in the second: Revenue climbed by 12.8 percent to 6.4 billion euros,bolstered by the 10-year contract with the British health-care agency NHS as well as by higherrevenue in Asia. In the DHL Freight business unit, revenue totaled 1.82 billion euros compared with1.84 billion euros in the year-ago period.
EBIT for the entire LOGISTICS division totaled 414 million euros in thefirst half, 28.2 percent more than the same period last year. The rise was generated in part by thesale of Vfw AG in the first quarter. In the second quarter, underlying EBIT rose 20.5percent.
The FINANCIAL SERVICES division, which consists primarily of Postbank,boosted revenue by 10.8 percent to 5.1 billion euros in the first half of the year. EBIT totaled493 million euros, 6.7 percent higher than in the previous period last year. The growth in EBIT andsales was bolstered by Postbank’s mobile sales and the bank’s mortgage lending business. With thehelp of successful cost management, Postbank was able to offset the increase in value-added tax aswell as non-recurring costs stemming from the integration of mortgage lender BHW. Following theacquisition of 850 outlets from Deutsche Post as well as the majority of BHW, Postbank can nowfurther increase its selling power and raise its market share.
EBIT at the Services division was minus 298 million euros compared withminus 257 million euros in the same period last year. The main reason for the change werenon-recurring effects stemming from the arbitration proceedings with Deutsche Telekom and the saleof McPaper AG last year.
Deutsche Post World Net still expects an underlying EBIT of at least3.6 billion euros for the entire fiscal year of 2007.
In the MAIL division, revenue is expected to be stable or slightlyhigher. The company still assumes that the revenue decreases experienced in the domestic mailmarket will continue to be more than offset by the other business units. In terms of earnings, astable EBIT of around 2 billion euros is expected.
In the EXPRESS division, the Group forecasts EBIT of at least 400million euros for 2007. This figure contains costs related to the new air-freight hubLeipzig/Halle. The LOGISTICS division is expected to increase EBIT by about 15 percent. Theforecast doesn’t include the sale of Vfw AG. In the FINANCIAL SERVICES division, EBIT is expectedto rise at least 5 percent. For the SERVICES division, EBIT of about minus 700 million euros isforecast.
