Outpacing the market: Hermes Group achieves double-digit growth in the 2015 fiscal year

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1 Press release Outpacing the market: Hermes Group achieves double-digit growth in the 2015 fiscal year Hamburg, April 20, 2016 The Hermes Group, continuing years of successful growth, also records impressive figures in the 2015 fiscal year. The trade and logistics services provider based in Hamburg has increased its turnover by 11% to 2,460 million ( 2,230 million in 2014). A key contributor to this was the fastgrowing international parcel and logistics business, driven by the booming e- commerce. In Europe alone, the Hermes parcel companies moved around 580 million shipments 11% more than in the previous year. 74% of this order volume was charged by retailers from outside the Otto Group, with this thirdparty business expanding by 16%. Hermes also successfully established itself in leading e-commerce markets such as the US and Asia. In 2016, the signs continue to indicate growth for the Hermes Group: in order to further secure its role as a preferred partner for e-commerce retailers, Hermes is sustainably investing in extending its portfolio along the retail supply chain. "The strategy of internationalisation was anchored early in the Hermes Group and is consistently pursued and now it's paying off. We have very successfully evolved from being a leading logistics supplier in the European market to become a global full service provider in e-commerce," explains Hanjo Schneider, member of the Otto Group board for Services and chairman of the supervisory board of Hermes Europe. "We're happy to be concluding our 12th year in a row with significant growth, as well as outperforming the competition in relevant markets such as Germany and the UK. We want to build on this in Digital transformation will continue to be the megatrend in our globalised world in the future. This is an exciting opportunity that opens up potentials for growth and clearly shapes our agenda at Hermes." With twelve specialist companies, the Hermes Group is the only supplier in the market to provide all services throughout the retail delivery chain from a single source. The Group currently has 12,215 employees worldwide. The revenue achieved within the group of companies in 2015 was 2,460 million corresponding to growth of 11% from the previous year. The result shows that Hermes has successfully adapted to the prevailing trends in the market. One example of this is the foundation of the start-up company BorderGuru, with which Hermes is improving its position in growing international trade with online retailers. Hermes, too, invested in a new business model called Liefery start of 2015 in order to serve even better the increasing demand for same-day delivery in trade. This is a start-up that provides same day deliveries, which can be booked individually, in large cities. -1-

2 Successful core business: increasing parcel volumes in Europe Hermes parcel companies in Germany, the UK, Austria, Italy and Russia made a record number of deliveries in the 2015 fiscal year: a total of around 580 million. That's around 11% more parcels, catalogues and other goods shipments than in the previous year (530 million). Around 74% of the shipment volume resulted from business with clients outside Otto Group. Hermes also won market shares in 'two-man' handling: in 2015 the Hermes two-man teams transported around 4.5 million pieces of furniture and large equipment approximately 15% more than in This meant that the Hermes Setup Service continued the constant growth it has achieved for many years, and further built out its leading position in terms of the market and quality. Germany: investment in new sites and services Despite the increasing competition in delivering to private customers, parcel business within Germany was again very successful in Alongside collaboration with new, large-scale clients from the shipping trade such as Yves Rocher and Glossybox, the company also won more small and medium-sized retailers as customers. The planned extension of the Hermes logistics network representing an investment of over 300 million was one of the key drivers for this. From 2018, 35 predominantly newly designed or expanded logistics centres will provide even greater closeness to customers and shorter delivery times. The first new building is currently being put up in Bad Rappenau, Baden-Württemberg. The introduction of new digital services is also inspiring our business. The mobile parcel label that can be created using the Hermes app was accessed six times more in 2015 than the previous year. The 'WunschZustellung' service that enables users to select the delivery day and reroute the delivery location for individual packages, did well among private customers. It is intended that the ParcelLock system developed together with DPD and GLS will make it particularly convenient for single-family homes to receive parcels from summer Collaboration is also crucial to Hermes in testing new city logistics concepts: the company is currently supporting renowned research projects in the area of electromobility with partners from the economy, science and politics, such as in Berlin, Hamburg and Stuttgart. -2-

3 The UK: new records The Hermes parcel division in the UK is the largest privately managed parcel service provider in the sector, and its growth has also significantly outpaced the market in The 4,500 Hermes ParcelShops located there have made a significant contribution in this respect, and since their introduction in 2012 have become established as an alternative delivery address in e-commerce. Current investment in technology and infrastructure are setting the course for continuing this expansion. Hermes UK is currently investing 23 million in new handheld scanners with satellitesupported tracking software, as well as many other exciting projects. A parcel centre in Rugby, Warwickshire, is currently also being set up at a cost of 40 million, and will have an area of 270,000 square foot. This site is being set up to process the fastgrowing volume of packages being sent from the UK to 190 countries. Austria: solid growth and a positive trend The 1,600 Hermes ParcelShops in Austria have also been supplied with parcels on Saturdays for the first time in 2015 a feature that sets Hermes apart from its direct competitors. The new weekend sorting means that Hermes has been able to significantly improve its delivery times, and is currently considered to be the fastest service provider for importing into Austria. Hermes customers are now also able to send shipments to receiver boxes and 'acking Stations' provided by Österreichische Post, as an alternative to the Hermes ParcelShop. Hermes is also currently processing same day returns for customers in Vienna for its client Zalando, as part of the pilot project and in collaboration with Liefery. Hermes opens up new business potentials The newest member of the Hermes family is the start-up company BorderGuru, which specialises in international cross-border shipping, and in particular arrangements for tolls and payments. The company has been official partner to the Chinese Alibaba Group since mid-2015, and focuses on markets in Asia and the US. For example, the shoe retailer shoepassion.com is now using BorderGuru services for shipment from Europe to end customers in the US. The Hermes subsidiary Zitra, a global trading partner for brands and retailers, also performed well in Zitra enables retailers to distribute their ranges directly through international online marketplaces and provides the IT, management and fulfilment infrastructure required. Just one example of this is that Zitra has provided renowned European brands with access to leading online sales platforms in China in the form of the joint venture started with the Chinese online giant JD.com. -3-

4 Hermes-OTTO International (H-OI) has significantly built out its offering with respect to goods procurement, particularly in the area of "fast fashion", and has established product development capacities in India and Bangladesh. The company has also successfully extended its customer base outside the Otto Group, with customers such as Ernstings Family and JD Williams. A full service for trade: offering strength in fulfilment and returns Hermes Fulfilment is responsible for storing goods and processing returns within the Hermes Group services that are increasingly relevant in global e-commerce. This division has a total product range of around 1 million articles, and moved around 300 million items in 2015, primarily on behalf of retailers in the textile industry. This positive trend was supported by the introduction of "Smartful" organisational and IT software. This tool is SAP-based and enables small and medium-sized retailers to establish fulfilment that is successful for their business. In anticipation of the persistent growth trend in e-commerce, Hermes Fulfilment in Löhne, North Rhine Westphalia, has recently updated/newly established two sites. A new hall building with an area of 20,000 square meters (Schillenbrink industrial area) was commissioned in February, and the highly anticipated top logistics centre in the Scheidkamp industrial area in Löhne, comprising more than one million square foot, is due for completion in June. Specialised in processing bulky items, the site brings together the capacities offered by Hermes Fulfilment and Hermes Einrichtungs Service under one roof, with a total investment volume of around 90 million. Up to 30,000 pieces of furniture and bulky items are to be loaded here every day, and sent on their way to the end customer. About Hermes: Hermes provides international logistics services to the retail industry. Headquartered in Hamburg, it is a wholly-owned subsidiary of the Otto Group. The company is a leading specialist for retailrelated services and partners numerous distance sellers in Germany and internationally. The range of services provided by the twelve Hermes companies embraces the full length of the supply chain: sourcing, quality assurance, transport, fulfilment, home deliveries and 2-man handling. In 2015 the Hermes Group grew consolidated revenue to billion euros and now employs 12,215 people. Hermes operates worldwide and has established country companies in the UK, Russia, Italy and Austria. Since 2013, Hermes is the official premium partner of German football's Bundesliga. Further Information: -4-

5 Media contact: Hermes Pressebüro Hermes c/o achtung! GmbH Martin Frommhold Vanessa Dörlemann Essener Straße 89 Straßenbahnring Hamburg Hamburg Tel.: +49 (0) Tel.: +49 (0) Fax: +49 (0) Fax: +49 (0) martin.frommhold@hermesworld.com vanessa.doerlemann@achtung.de newsroom.hermesworld.com twitter.com/hermes_presse -5-