Deutsche Post DHL Group Q results. Investor Relations 12 May 2015

Transcription

1 Deutsche Post DHL Group Q results Investor Relations 12 May 2015

2 AGENDA 1 Q Highlights (Frank Appel) 2 Financial results Q (Larry Rosen) DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 2

3 Q HIGHLIGHTS Main operating and financial trends as expected Structural volume trends of dynamic parcel growth and letter decline once more confirmed in PeP with EBIT flat as revenue growth again offset by higher costs Express growth momentum fully intact with volume growth feeding further margin increase to drive another strong EBIT performance and higher cash flow Weak Forwarding performance: new management to review transformation course and focus on operating performance improvement Supply Chain restructuring initiatives now in execution phase Cash Flow performance showing usual seasonal Q1 pattern with civil servant pension payment and reversal of year-end effects 2015/16 guidance confirmed DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 3

4 Q1 REFLECTS TRANSFORMATION & RESTRUCTURING FOCUS Flat Group EBIT with divisional performance showing the expected mixed picture REVENUE EBIT Q Q Change Q Q Change PeP 3,960 4, % % Express 2,879 3, % % Forwarding, Freight 3,523 3, % % Supply Chain 3,506 3, % % Group 13,569 14, % % DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 4

5 PeP: GOOD GROWTH ACROSS OUR PARCEL ACTIVITIES Mail Communication revenue Dialogue Marketing revenue Business Highlights m EUR -0.6% 1,738 1,727 Q Parcel Germany volumes m units Q Q % Q Parcel Germany revenue Parcel Europe revenue 1) DHL ecommerce revenue 2) m EUR % +4.8% 273 m EUR m EUR % +25.8% 1,062 Q Q Q Q m EUR 302 Mail Communication revenue decline in line with modest volume decline (-1.7%) Dialogue Marketing also with limited revenue decline as price increases mostly compensate volume decline (-9.8%) Parcel Germany revenue growth outpacing strong volume growth of 11.0% supported by price increases Robust organic growth in international Parcel activities in and outside of Europe, also supported by currency developments Q Q Q Q ) Parcel Europe ex Germany; 2) Parcel outside Europe DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 5

6 PeP: STRUCTURAL REDUCTION IN PERSONNEL FACTOR COSTS DUE TO LAUNCH OF NEW PARCEL DELIVERY UNITS Average wages, in EUR/h Currently ~6,000 employees * 8.50* 8.50* * Legal minimum wage DHL Delivery GmbH Deutsche Post AG Degree of outsourcing 100% 100% 95% 33% 0% <5% Wage costs at Deutsche Post AG significantly above competition Launch of new Delivery GmbHs reduces gap to competition since average wage level at EUR/h instead of EUR/h at DPAG DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 6

7 PeP: CONTINUOUSLY OPTIMISING OUR PARCEL SERVICE OFFERING FIRST MILE: Marketplace offer rebranded and going international Allyouneed.com NEW Re-branding of MeinPaket.de Launch in Poland Allyouneedfresh.com LAST MILE: Customer-centric range of delivery options with ~ drop off points Paketshops Packstation Delivery at Home Delivery boxes Parcel box DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 7

8 PeP: DHL ecommerce IS AN ESTABLISHED PLAYER IN THE US ecommerce: leveraging established US presence US Domestic distribution capacities Adding fulfillment services and products in collaboration with DHL Supply Chain icart : fully-landed cost calculator Consolidation and sortation of domestic and international mail and parcels #4 US in consolidator market for USPS (SmartMail product) Combining domestic and international delivery with best-inclass supply chain technology First dedicated e- fulfillment warehouse in Columbus,OH As part of Strategy 2020 we are moving up the e-commerce value chain DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 8

9 PeP: BLUE DART PROVIDES BASE FOR DHL ecommerce IN ASIA Domestic market leader for B2B and B2C parcels in India Domestic distribution capacities South Asia s premier express and integrated package distribution company 52% market share in domestic air express in India Adding fulfillment services and products in collaboration with DHL Supply Chain Blue Dart: front-end, customer interface and delivery; DSC: warehousing and 3PL E-fulfillment facility in Delhi close to go-live with first global customer As part of Strategy 2020 we are moving up the e-commerce value chain DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 9

10 EXPRESS: STRONG TDI GROWTH CONTINUES Time Definite International (TDI) 1) Revenues per day in EUR m 34.0 Q Time Definite International (TDI) Shipments per day 000s 662 Q % +7.1% 35.2 Q Q Business Highlights Strong start into the year with TDI volume growth of +7.1% ( MEA +12.4%, Europe +10.2%, Asia/Pacific +5.4%, Americas + 0.6%) Volume growth outpacing revenue growth due to lower fuel surcharge Strong focus on customers and service quality has driven further market share gains Growth supported by continuous expansion and improvement of our leading global network, including hub investments across all major geographies 1) Currency translation impacts are eliminated. Data aggregated with same currency rate DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 10

11 GLOBAL FORWARDING, FREIGHT: WORKING TOWARDS STABILISATION Air freight 000s Tons Business Highlights 932 Q % 935 Q Air and ocean volume growth slowing, mainly due to EMEA and AP regions GP/unit stable in Air Freight at low levels and Ocean Freight GP/unit decline reflect continued difficult industry environment Ocean freight 000s TEU 1) Weak divisional EBIT performance due to complexity of NFE implementation and associated organizational changes 688 Q % 704 Q New management sets priority on improving business performance with unchanged commitment to transformation based on comprehensive review 1) Twenty Foot Equivalent Unit DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 11

12 MANAGEMENT UPDATE ON DHL GLOBAL FORWARDING Management structure: Frank Appel, interim CEO DHL Global Forwarding, Freight Renato Chiavi, interim CEO DHL Global Forwarding Tobias Meyer, EVP Programs (Transformation) Amadou Diallo, CEO DHL Freight (unchanged) Weak operational performance requires new management to review transformation course Unchanged commitment to transformation and to increase the efficiency of our Forwarding business Reviewing transformation course based on pilot country and organizational alignment analysis First priority: renewed and intensive focus on improving underlying business performance DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 12

13 SUPPLY CHAIN: SOLID PERFORMANCE GIVEN RESTRUCTURING New signings, EUR m 1) Business Highlights Q Q ) Annualized revenue Revenue by sector Q Others 10% 5% Retail Williams Lea Energy 23% 2% Automotive 11% 10% 19% Consumer Technology 20% Sound order intake in Q1 (EUR 260m) especially in Automotive, Consumer and Life Sciences & Healthcare Revenue growth across all verticals, strongest in Automotive, Consumer and Life Sciences & Healthcare Further steps taken in implementing Strategy 2020 as presented at last Capital Markets Tutorial Restructuring charges cover implementation of consistent and lean organizational structure, addressing underperforming business areas as well as productivity measures Life Sciences & Healthcare DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 13

14 DPDHL GROUP STRATEGIC AGENDA Executing on our short-term agenda Stabilize Forwarding operating performance while reviewing transformation course Execute Supply Chain restructuring measures Negotiate a wage agreement to ensure future competitiveness especially in Parcel Germany Continue investments in successful Express operations to build momentum for our long-term strategic and financial goals: Leveraging growth in e-commerce and emerging markets, based on unrivalled, diversified business portfolio Clear roadmap for margin and profit improvement Flexible balance sheet and improving cash generation underpin payout policy DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 14

15 AGENDA 1 Q Highlights (Frank Appel) 2 Financial results Q (Larry Rosen) DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 15

16 GROUP P&L Q EUR m Q Q Chg. Management comments Revenue 13,569 14, % EBIT % t/o PeP % t/o DHL % Financial result % Revenue development supported by currency effects. Organic growth of 2.1% with growth in all four Divisions / industries. Impact also from lower energy prices Group EBIT about flat as strong Express growth is offset by transformation and restructuring related costs in Forwarding and Supply Chain Static operating profit as revenue growth driven by ecommerce - Parcel activities and price increases is countered by factor cost inflation Continued strong performance across all major metrics in Express. Declines in Supply Chain and Forwarding, Freight EBIT mainly reflect planned restructuring and transformation initiatives Improvement driven by benefits from lower interest rate environment on interest expense for bonds and provisions as well as FX effects Taxes % Tax rate of 17.5% in line with ~18% full-year guidance Cons. net profit 1) % Net profit and EPS about flat, in line with stable operating profit development EPS (in EUR) % Strong increase in net profit attributable to non-controlling interests 1) Attributable to Deutsche Post AG shareholders DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 16

17 FREE CASH FLOW Q Seasonal factors drive usual Free Cash Outflow in Q1 EUR m Q Q Cash from operating activities before changes in Working Capital Changes in Working Capital Net cash from operating activities after changes in Working Capital Q1 cash generation as every year burdened by payment of fullyear contribution for civil servant pension scheme (EUR 530m) Tight management of Group working capital helped to minimize flow-back of typical year-end cash effects Net Capex Net M&A Free Cash Flow decline due to increased capex spend reflecting continued investments in our growth markets as well as timing effects Net Interest Net interest line benefitted from one-off effect of EUR 76m related to monetization of interest rate swaps Free Cash Flow FFO/Debt at 24.9% (year-end 2014: 27.7%) DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 17

18 NET DEBT (-)/LIQUIDITY (+) Seasonality drives net debt increase as usual in Q1 Annual contribution to civil servant pension of EUR 530m (o.w. 130m in EBIT/OCF and 400m in W/C) in EUR m , ,077 Net debt (Dec 31, 2014) OCF before change in W/C Changes in W/C Net capex Net interest Other effects Net debt (Mar 31, 2015) DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 18

19 REMINDER ON PENSIONS: DEFINED BENEFIT OBLIGATIONS (DBO) DBO pensions in Germany No regulatory funding requirement Pensions paid partially from plan assets and partially from current OCF Impact of declining discount rates Balance sheet: net pension provision up 1.5bn in Q due to another step-down in Euro discount rate P&L: slight increase in staff costs expected in 2015 (mainly due to higher current service costs), mostly offset by small decline in finance costs Cash flow: cash outflow not directly affected as actual pension payments and employer contributions to plan assets not affected by fluctuations in applied discount rate levels Total DBO Plan assets Net Pension Provision 18,099 10,961 11,849 7,138 8,635 Dec. 31, ,484 Mar. 31, 2015 in EUR m 2014 Q Average Discount Rate (quarter-end) 2.62% 2.04% EUR Discount Rate (quarter-end) 2.25% 1.50% Lower discount rates increase balance sheet liability but have no direct impact on cash generation DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 19

20 PeP DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,960 4, % Revenue increase reflecting growth across ecommerce - Parcel activities as well as price increases in Post products EBIT % EBIT growth constrained by rise in wages and transportation costs as well as expenses for international expansion of ecommerce - Parcel Operating Cash Flow % OCF increase driven by positive working capital development Capex % Investments mainly directed to parcel infrastructure expansion DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 20

21 EXPRESS DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 2,879 3, % EBIT % Strong TDI volume growth supported by positive FX effects. Organic revenue growth at 2.3% mainly impacted by significant decrease in fuel surcharge revenue Strong EBIT growth driven by TDI volume growth and network efficiencies, EBIT margin up 60bp yoy to 10.2% Operating Cash Flow % Strong operating cash flow increase in line with trend in EBIT performance Capex % Main investments going towards hub and gateway infrastructure upgrade as well as air fleet modernization and expansion DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 21

22 GLOBAL FORWARDING, FREIGHT DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,523 3, % Revenue increase driven by volume growth in ocean freight and FX Gross Profit % Continued difficult market environment with margin pressure in both AFR and OFR EBIT % Further affected by ongoing NFE transformation program and low GP/unit in AFR and OFR Operating Cash Flow % Mainly reflecting EBIT decline and unfavorable working capital development Capex % Low capex reflecting asset light business model DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 22

23 SUPPLY CHAIN DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,506 3, % FX benefits mainly driven by stronger USD and GBP. Organic revenue up 0.8% supported by new business across all regions (UK,US and APAC) but still held back by a deliberate customer loss in North America EBIT % EBIT declining mainly due to restructuring costs as well as small timing effects from real estate transactions Operating Cash Flow n.a. Cash flow down yoy mainly due to timing effects Capex % Higher capex reflecting phasing of new contract investments DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 23

24 EBIT GUIDANCE CONFIRMED FOR 2015/16/20 EUR bn PeP At least 1.3 > 1.3 ~ 3% CAGR DHL ~ 10% CAGR CC/Other ~ ~ < 0.5% of group revenue Group > 8% CAGR FY 2015: Free Cash Flow to exceed 2014 dividend Tax rate around 18% Gross Capex of around EUR 2.0bn DPDHL GROUP Q RESULTS 12 MAY 2015 PAGE 24