DHL in Asia/ Pacific. John Mullen, Joint Chief Executive DHL EXPRESS

Transcription

1 DHL in Asia/ Pacific John Mullen, Joint Chief Executive DHL EXPRESS

2 Disclaimer This presentation contains certain statements that are neither reported results nor other historical information. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Deutsche Post AG s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. Deutsche Post AG does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation. This document represents the Company s judgement as of date of this presentation.

3 Agenda Regional Market Overview Asia Trends Overview of DHL Asia Pacific Region Barriers and Opportunities

4 Asia/ Pacific, a complex portfolio Asia-Pacific Market Synopsis - Express Mature Unique Mid-Level Developing Markets Japan Hong Kong Singapore Australia New Zealand Korea Taiwan China Malaysia Thailand Indonesia Philippines India Sub-Continent Vietnam Cambodia Laos Myanmar Etc Developed Logistics Rapid development Developing sophistication Poorer infrastructure Characteristics High Competition High service levels Lead time pressure Lower growth Under-developed domestic Increasing service levels High growth Increasing Competition Increasing service levels Varied growth Lower competition Customs JV requirements High growth

5 Driving solid growth in ALL Asian markets Comparative Asian Growth Rates* 25-50% China Philippines Minor Countries 10-25% Japan Hong Kong Singapore Australia India Malaysia Thailand Indonesia Philippines Pakistan Bangladesh Others 5-10% Taiwan New Zealand *External core revenue growth at budget exchange rates Source: SMART

6 Agenda Regional Market Overview Asia Trends Overview of DHL Asia Pacific Region Barriers and Opportunities

7 Explosice market growth expected in A/P CAGR CAGR Global international air express market AP international air express market EUR billions Percent EUR billions Percent ROW AP to intercon Intra AP AP AP as % of total global market Intra AP as % of total AP market Source: DHL market sizing; Nomura equities; Boeing; Company annual reports; Datamonitor; McKinsey analysis

8 Forecasts show China leading, but mature markets also growing Historical exports growth CAGR of key industries* Percent China Korea Taiwan Hong Kong Japan Worldwide 18.3 Forecast methodology Use historical growth rates as basis Factor in future global consumption shifts, outsourcing and offshoring trends Industry weighted forecast of exports growth CAGR (likely case) Percent 9.2 Construct three export growth scenarios (low, Korea medium and high) to reflect the degree of Taiwan uncertainty involved over the forecast Hong Kong 5.6 period Weight scenarios by estimated probability to develop likely case China Japan * Key industries: Auto, High Tech, Apparel and Pharma; Only NEA countries examined in detail; market sizes for the rest of AP are obtained from recent DHL market sizing studies Source: WTO; YDL; WIM; IATA; McKinsey analysis

9 China powerhouse will be driven by continued off shoring Continuous off-shoring (especially to China) will drive Explosive market growth China exports in key express industries* EUR billions Hi-Tech Apparel Auto Total AP international express market EUR Bn CAGR percent China share of global exports X Exports growth to express growth multiplier of 1.6 based on last 5 years Rest of AP China 4 9 < < * Accounting for 54% of China s international express market Source: DHL market sizing; WTO; McKinsey analysis

10 Agenda Regional Market Overview Asia Trends Overview of DHL Asia Pacific Region Barriers and Opportunities

11 DHL is the clear market leader in the region... Over 3.4b revenue Over 300,000 customers 41 countries and territories Close to 30,000 employees More than 48 million shipments & 800 million kilos Over 460,000 TEU ocean freight Airport facilities: Primary: Central Asia SuperHub Hong Kong, South East Asia Hub Singapore Secondary Hubs: BKK, SEL, SYD, TYO 65 gateways Close to 8,000 vehicles More than 1,000 locations Over 20 dedicated freighter aircraft/ >800 commercial flights per day

12 Market Share Leadership TNT 12% Global Integrators International Express including regional players EMS/Post 11% Others 11% UPS 19% DHL 40% TNT 8% DHL 32% UPS 14% Fedex 29% Source: MRM 2004 (Total shipments for international air express) Global integrators only Fedex 24% Source: Market Sizing Study 2004 (Total shipments for international air express) Shares of International Express (13 countries), 2004; Paid locally

13 Investments in world class infrastructure Japan 24 Service centres Tokyo Distribution Centre South Korea Bonded warehouse at New International Airport Service centres Vehicle distribution Centre Taiwan Gateway movement 4 Service centres China 5% stake in in Sinotrans Gateways Pudong Gateway Ground infrastructure development New Logistics & Service centres Logistics Management University Central Asia Super Hub New Freighters of Air Hong Kong Philippines Stations Stations Gateway Gateway Vehicles Vehicles India India Acquisition Acquisition of of Blue Blue Dart Dart Express Express Logistics Logistics JV JV with with Lemuir Lemuir Malaysia IT-supported Logistics Centre, Puchong Service centres Singapore Southeast Asia Hub Service centres Logistics Centre Regional Office & Asia Pacific Quality Control Centre New Zealand Joint venture with New Zealand Post / Express Couriers Australia Ltd Asia Pacific Information New Sydney Hub Logistics Centres Services (APIS) Centre Logistics Centre... up to a total of US$1.6bn for DHL AP

14 A competitive Air Network in A/P with 1st mover Hub presence in China ANC EMA CGN LAX ILN BGY BAH SHJ DEL PEK CAN/ SZX HKG SEL SHA TPE NGO OSA TYO BKK PEN SGN KUL MNL Asia Network Lufthansa Cargo JV DHL s Central Asia SuperHub: Well positioned for accelerated growth in the region Fully operational since 2004 SIN JKT POM CNS BNE Northwest Airlines Oceania Network Still largest hub after expansion in 2007 Direct access to the Pearl River Delta MEL SYD AKL WLG CHC

15 DHL Central Asia SuberHub Central Asia SuperHub is DHL s operational nerve center in AP; 24/7 operations One of six hubs in Asia Pacific region Hong Kong: gateway to Pearl River Delta (40% exports); excellent infrastructure, and inter-asia and inter-regional connectivity Largest express hub in the Asia Pacific region Recent announcement to double size (6 years ahead of scheduled expansion) Will be first automated express hub in Asia Pacific Increases sorting efficiency Improves sorting quality PEK SEL SHA NGO OSA TYO DEL BKK PEN CAN/ SZX SGN KUL TPE HKG MNL SIN JKT POM

16 Re-branding investment paying dividends DHL brand is widely recognized DHL is ranked as the leading brand in the industry (Media Magazine, 2005) Number 33 of Asia top 1,000 brands (nearest competitor: 49) Deutsche Post World Net ranked 70 in 2005 Fortune Global 500 (nearest competitor: 128), and ranked 86 in 2005 Forbes Global 2000 (nearest competitor: 115) Customers appreciate DHL s brand promise Others 40% UPS 10% Fedex 21% DHL 29% Winning numerous industry awards (Asian Freight & Supply Chain Awards, Asia Logistics Awards) Award winning campaigns support business No One Knows Asia Pacific Like We Do / More DHL

17 Number 1 Transit Time position developed Market leading service from six years of continual service improvement Non-dutiable shipments 100% 90% Asia Pacific Overnight Delivery 97% 93% Dutiable shipments 100% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec pm% pm% pm% pm% pm% pm% 2005 NAAN 1PM 40% Jan Feb Mar Apr May Jun Jul Aug Sep pm% pm% pm% pm% pm% 2005 NAAN 1PM AP-AP : HKG, SIN, SEL,TPE, OSA, TYO, BKK, MNL, SHA, KUL,PEN, JKT, PEK (Mon-Thur, All P/U and All Flights) NAAN : HKG, SIN, SEL, TPE, OSA, TYO, BKK, MNL,SHA, KUL,PEN, JKT, SZX, CAN, SGN (Mon-Thur, P/U Cutoff and NAAN flights + trucks only)

18 Agenda Regional Market Overview Asia Trends Overview of DHL Asia Pacific Region Barriers and Opportunities

19 In a challenging environment Industry Trends Emergence of new supply chain business models and rapid changes in customer demands (especially high-tech) IT integration requirements of customers will increase, and IT capabilities of logistics players will improve, especially for integrated supply chain solutions Increasing customer focus on logistics cost to address brutal cost competition Shift to heavier weight express offerings has impact on Express business Macro/Regulatory Issues WTO, Asean Free Trade Agreement (AFTA) Bi-Lateral FTA s, Multi-Fibre Agreement etc Investment Flows and industry migration eg Batam/Bintan/SEA to China. PRD Ground Infrastructure 115 new airports by 2015 in China. Highway network/opening of western provinces New FTZ s and enhanced transhipment facilities Liberalised air traffic rights. Taiwan direct links? Air Express self-handling - elimination of monopolies in statutory service providers Non-tariff barriers

20 DHL will maintain its Number 1 Market Share position Clear 10 year strategy developed across all functions Significant North East Asia growth driving strategy to cover Mega market Infrastructure plan developed to allow flexibility for Economic growth as well as downturn and investments made in light of economic imperatives US$ 1.6bn (EUR 1.31bn) in infrastructure development announced DHL s Asia Pacific aviation network to be expanded Expand Domestic Express services in China, India, New Zealand Coordinated approach of all DHL business units Offering customers one-stop convenience, with tailored end-to-end supply chain solutions Product portfolio ranging from express, air and ocean freight, overland transport and logistics service