Deutsche Post DHL today presented new mid-term financial targets, including a rise of about 40%in overall operating profits by 2015, driven by higher profits from the DHL businesses thanks to
economic trends such as global trade and e-commerce growth and supported by stable mailprofits.The German postal and logistics group said it aims for EBIT to climb to between €3.35 billionand €3.55 billion by 2015, about €1 billion more than the €2.44 billion generated in 2011.
The DHL divisions (Express, Global Forwarding/Freight and Supply Chain) will, in particular,contribute with an increase in operating profit to between €2.7 billion and €2.9 billion. With thiscommitment the group reinforced its Strategy 2015 target for the DHL divisions to achieve averageannual growth of 13-15% between 2010 and 2015.
The Mail division is projected to contribute a minimum of €1 billion to group EBIT in 2015.Furthermore, Deutsche Post DHL said it expects to reduce Corporate Center/Other expenditures fromaround €400 million today to about €350 million by 2015.
“In recent years, we succeeded in positioning ourselves exceptionally well in the globalgrowth markets and laid the foundation for continued profitable growth into the future,” DeutschePost DHL CEO Frank Appel told analysts and investors in London. “We have stabilised earnings in theMail division and are now capitalising on the tremendous growth opportunities at DHL. The outlookahead gives us good reason to be optimistic.”
In the Mail division, Deutsche Post said EBIT has been stabilised at above €1 billion afterseveral years of decline. In future, the company will focus on leveraging dynamic growth in theparcel market and developing further business opportunities with new digital products. In addition,cost efficiency is to be further enhanced through greater flexibility in the use of existingcapacities and continued automation in the mail and parcel centres. The company said by the end of2012 it will have invested €420 million in mail-sorting equipment over a period of three yearswhile, as previously announced, it will invest around €750 million by 2014 to modernise andincrease capacity in its Germany-wide parcel network.
In the DHL divisions, the top priority in coming years is to take even greater advantage of thecompany’s unique global presence in order to further enhance revenues and profit. Over the past twoyears, all three logistics divisions have already achieved significant growth in revenues and haveconsiderably boosted their profitability. To continue this positive trend, DP DHL said it isplacing a special emphasis on taking advantage of targeted growth opportunities in the particularlydynamic growth BRICM-countries – Brazil, Russia, India, China and Mexico.
To be able to serve the individual needs of customers in these and all other regions of theworld, a further focus is being placed on the development of new products and services for variousindustry sectors. DHL is focusing on offering specific logistics solutions for the life sciencesand healthcare sector, for technology and automotive companies and for customers from the energyindustry. Thanks to increased collaboration between the DHL divisions, customers will increasinglybenefit from integrated, value-enhancing solutions.
DHL Express will further improve its operating margin by focusing on time-definiteinternational shipments, continued strong volume growth, systematically expanding the expressaviation network and continuing to improve efficiency.
DHL, the global market leader in air freight, aims at further improving its strong marketposition in ocean freight. Besides initiatives targeting growth, the Global Forwarding/Freightdivision is planning to implement a transformation program (‘New Forwarding Environment’). Itsobjectives include increasing efficiency through new IT systems and greater automation and, as aresult, boosting productivity and further improving profitability.
The group said it considers the Supply Chain division, which, in 2011, concluded new contractswith a volume of more than €1 billion for the fourth consecutive year, also to be exceptionallywell positioned to benefit from key market developments. The continuous trend toward outsourcing,the gradual emergence of true global markets instead of local ones and customers’ growing need forcomprehensive solutions from a single source are, along with the development and standardisation ofglobal products that have been systematically tailor-made to meet customers’ needs, forecast tofurther increase the division’s operating profit.
Meanwhile, CFO Larry Rosen stressed that the safeguarding of long-term financial stabilityand flexibility remained high priorities for the group while, at the same time, ensuring thatfinancial resources are available to enable full execution of Strategy 2015. Rosen also confirmedDeutsche Post DHL’s dividend policy. The company continues to aim at distributing 40 – 60% of itsconsolidated net profit to shareholders. In the past two years – in which the dividends were raisedeach year by an average of 8 percent – the dividend payout ratio was at the upper end of the targetcorridor each time.
“We are well on the way to reaching all of the targets spelled out in our Strategy 2015,” CEOFrank Appel concluded. “By taking this approach, we create added value for our shareholders and, atthe same time, establish all Group divisions as the partner of choice for our customers and thebest employer in our industry.”
