Deutsche Post DHL Group. Investor Relations August 2016

Transcription

1 Deutsche Post DHL Group Investor Relations August 2016

2 Q HIGHLIGHTS Strong EBIT growth reflects continued good operating performance as well as prior year strike effect PeP EBIT strongly up, driven mainly by Parcel growth and stamp price increase while international parcel network investments continue Express EBIT growth reflects continued strong TDI volume development and yield management, offsetting FX headwinds DGFF: further operating improvements driven by turnaround measures while market growth remains subdued Supply Chain with further attractive new business wins while continuing to invest in its restructuring agenda Strong Q2 cash flow performance. Net debt increase reflecting usual timing of dividend payment as well as pension funding Key growth trends intact and delivering, 2016/20 EBIT guidance confirmed INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 2

3 DHL PARCEL: LARGEST PARCEL CENTER IN GERMANY JUST OPENED Cementing German Parcel market leadership Obertshausen highlights Sorting capacity of 50,000 parcels per hour 37,000 square meters of indoor floor space >6 kilometers of sorting and conveyor lines >400 sorting terminal points Additional service benefits for both senders and recipients Rapid throughput allows later cut-off, supporting even more flexible delivery options and times Even more detailed shipment tracking and shipment information INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 3

4 DHL PARCEL: SAME-DAY B2C SERVICE SINCE 2012; TIME-WINDOW OFFERING EXPANDED SAME-DAY Established market leader Same-Day service launched in 2012 Available to 30m consumers in metropolitan areas today Attractive niche with broad customer base Monday-Saturday delivery, incl. temperature-controlled service NEW: desired time-window starting as early as 10am NEXT-DAY Evening time-window delivery (6-9pm), with recipient notification with 30 minute accuracy NEW: extension of time window delivery to nationwide coverage throughout Germany INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 4

5 EXPRESS GROWTH SUPPORTED BY BALANCED GLOBAL FOOTPRINT Quarterly growth ranking, TDI volume growth #1 EU EU EU EU AM AP AP AP EU EU MEA AM AP AP MEA EU MEA EU EU #2 #3 #4 AP AM AM AM AP EU EU EU AP MEA AP AP MEA AM AM MEA EU MEA MEA AM AP AP AP EU MEA MEA AM MEA AP AM EU AM MEA AP AP AP AP AP MEA MEA MEA MEA MEA AM AM MEA AM AM EU MEA EU EU EU AM AM AM AM EU AP MEA AM EU AM AM EU AP MEA AP MEA Consistent strong volume growth in global TDI network Constant variation in regional patterns reflects movements in global trade flows Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % +9.4% +8.4% +7.8% +8.7% +8.1% TDI Shipments/ day EU Europe MEA Middle East Africa AM Americas AP Asia Pacific INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 5

6 DGFF: TURNAROUND CLEARLY VISIBLE, BUT STILL MORE TO DO DGFF: EBIT margin and EBIT / GP conversion 3,2% 13.2% 2,0% 1,2% 1,5% 8.4% 4.9% 6.0% 2,0% 7.6% 2013/14: NFE implementation and organizational change Q2 15: turnaround initiated; Q3 15: NFE write-down 2016: Turnaround delivering; new IT plan launched (excl. one-offs) Q Q DGF performance trough in H1 2015; since then turnaround measures are delivering expected first benefits: - Restructuring measures taken in Q2 15 have lowered fixed cost base EBIT Margin EBIT / GP conversion - NFE roll-back in pilot countries accomplished, operating performance improving but still well below historic highs - Revamped organization structures have lead to improved cost/service performance, although further improvement targeted New IT roll-out combines upgrade & simplification of existing IT landscape with new off-the-shelf TMS - Combined roll-out will be gradual over e with expected EUR ~60m opex and EUR ~10m capex p.a Mid-term: back to 2013 historic divisional margins long term: close EBIT/GP conversion gap INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 6

7 DHL SUPPLY CHAIN HAS 9 INITIATIVES TO DELIVER STRATEGY 2020 Focus Drive standardization and reduce complexity 1 Improvement of underperforming business Connect Create an effective organization globally 4 Efficient and effective functions Grow Shift the portfolio 7 Value added services 2 Operational standardization 5 Consistent and lean organization globally 8 Global sectors and products 3 Commercial standardization 6 Culture and mindset shift 9 Geographical shift to increase efficiency to enable change to address attractive segments INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 7

8 ORDINARY DIVIDEND OF EUR 0.85 FOR FY2015 Deployment of Free Cash Flow Dividend of EUR 0.85 for FY2015 i.e. dividend payments of EUR ~1.03bn to DPDHL shareholders on May 19, 2016 FINANCE POLICY, UNCHANGED Target / maintain rating BBB Dividend payout ratio to remain between 40 60% of net profit (continuity and Cash Flow performance considered) 59% 58% 53% 49% 50% 46% 60% Underlying Payout Ratio 1) 40% Excess liquidity will be used for Stepwise pension funding and / or ) Adjusted for Postbank effects as well as non-recurring items Share buybacks and/or extraordinary dividends Share buyback announced and executed in line with Finance Policy INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 8

9 GUIDANCE CONFIRMED FOR 2016/2020 EUR bn PeP > 1.3 ~ 3% CAGR DHL ~ 10% CAGR CC/Other ~ < 0.5% of group revenue Group > 8% CAGR FY 2016: Free Cash Flow (excl. EUR 1bn pension funding recognition) to exceed dividend payment (FY15 dividend) Tax rate ~14% Gross Capex of around EUR 2.2bn INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 9

10 WRAP UP Strong H sets the stage for delivery of 2016 guidance e-commerce megatrend continues to drive PeP and Express volume and revenue growth Continued progress in operational and margin recovery at DGF Good FCF development; unchanged finance policy Clear agenda driven by 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 investments and payout policy INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 10

11 Divisional Information INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 11

12 GROUP: ORGANIZATIONAL SETUP Group Corporate Divisions Group revenues 1) : 59.2bn Group EBIT 1) : 2.411bn Market capitalization 2) : 31.5bn Approximately 500,000 employees in more than 220 countries/territories Post - ecommerce- Parcel Express Global Forwarding Freight Supply Chain 62% market share in letter mail, 44% market share in German parcel market, selected int l parcel activities Sales: EUR 16,131m EBIT: EUR 1,103m Empl. 4) : 169,430 Global Time-Definite- International (TDI) leader with 34% market share. Sales: EUR 13,661m EBIT: EUR 1,391m Empl. 4) : 79,318 World s largest Air and 2nd largest Ocean freight forwarder, No. 2 in European road freight Sales: EUR 14,890m EBIT: EUR -181m Empl. 4) : 44,588 Global market leader, market share of 7.4% well ahead next biggest competitors. Sales: EUR 15,791m EBIT: EUR 449m Empl. 4) : 145,827 Corporate Center / Other: Sales: EUR 1,269m; EBIT: EUR -351m Brands 1) Financial year 2015; 2) As of 12/31/2015; 3) TEU = Twenty-foot equivalent unit 4) Average FTEs FY 2015 INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 12

13 STRATEGY 2020: INDUSTRY GROWTH ASSUMPTIONS GDP growth assumptions Attractive growth in key addressable market segments within logistics +2% +5% Estimated Market CAGR Mature Regions Emerging Markets +5-7% +8% +5-6% +2-3% +4-5% +5-6% Parcel Germany Parcel Domestic International International Express Air Freight Forwarding Ocean Freight Forwarding Contract Logistics Main Strategic Drivers Revenue mix shift to parcel and increased exposure to e-commerce structural growth trend Continued focus on TDI with network, efficiency and scale effects Improve Forwarding operating performance while implementing step by step IT renewal Standardization, overhead leverage and contract portfolio enhancement INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 13

14 Focus. Connect. Grow. POST, E-COMMERCE & PARCEL INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 14

15 PeP: STRONG OPERATING PERFORMANCE IN ADDITION TO BASE EFFECTS Mail Communication revenue Dialogue Marketing revenue Business Highlights EUR m +3.9% Q Parcel Germany revenue EUR m Q ) Parcel Europe ex Germany; 2) Parcel outside Europe Q % Q Parcel Germany volumes Parcel Europe revenue 1) DHL ecommerce revenue 2) EUR m 990 Q % +18.1% Q EUR m m units EUR m +12.2% Q % Q Q Q Q INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 Q German Post and Parcel yoy comparison distorted by base effect from strike in Q2 15 and three additional working days. Mid-term Mail Communication volume guidance unchanged for 2-3% decline p.a. Letter price increase continues to more than compensate related elasticity effects Parcel Germany with continued strong growth in volume and revenue Expansion of international parcel activities continues to deliver strong growth contribution with organic growth of 20% in Europe and 11% in DHL ecommerce Postbus business sale effective as of Oct 31 st PAGE 15

16 PeP DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,712 4, % EBIT PeP >+100% t/o Germany >+100% t/o International ecommerce - Parcel 5-1 n.a. Operating Cash Flow n.a. Capex % Strong revenue increase due to growing German and international parcel business, stamp price increase, last year s strike effect as well as 3 additional working days. Growth excl. FX was +8.1% Even adjusting for last year s Q2 strike effect of EUR ~-100m, strong EBIT increase driven by Post & Parcel in Germany Besides strike base effect, growth is driven by parcel business, stamp price increase and three additional working days As expected, international investments offsetting strong topline growth (+12.1%) and underlying profitability Reflecting change of provisions from EUR 1bn pension funding, underlying improvement strong due to higher EBIT and good working capital management Capex lower due to timing effects, still primarily oriented towards Parcel network expansion in Germany and Europe INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 16

17 PeP 2020 TARGET: SUPPORTED BY MIX SHIFT TOWARDS PARCEL PeP: Revenue Mix PeP: Market Assumptions 19% % ecommerce & Parcel Market growth assumption (in EUR), , p.a.: +5-7% Germany domestic; +8% international domestic Price regulation: No regulatory price cap Mail division excl. Parcel Parcel Germany 81% 61% Post ecommerce - Parcel E-commerce trend to continue to drive mix shift from letter to parcel products Post Expected average letter volume decline of -2 to -3% p.a. Price regulation: price cap = CPI - 0.2% Stamp price increase 1) : +2.8% in % in % in 2015 Starting 2016: price cap = CPI +5.8% 3) Stamp price increase 1) : +7.5% in ) 1) Average increase on basket of regulated products, applicable to EUR ~3.3bn directly affected Post revenue 2) from through ) cumulative: 1.7% (estimated) INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 17

18 THE PARCEL MARKET IS DEMONSTRATING STRONG GROWTH Total Market Volume EUR 6.8bn Others 61% DHL Parcel 39% Total Market Volume EUR 9.5 bn Others 56% DHL Parcel 44% German Parcel Market KPIs 5%-7% volume growth expected till Market CAGR : 7%. Broad range of customers Among lowest parcel prices in Europe Next day delivery speed is national standard DHL Parcel Volume CAGR : +9% Accompanied by slightly positive pricing 70 of 100 biggest online retailers in Germany within customer portfolio In a dynamic and competitive market, success depends on customer service & satisfaction INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 18

19 WE LEAD THE DELIVERY MARKET ON QUALITY Highest density of customer access B2C customer access points 28, DHL* Hermes DPD UPS *Includes Packstations, Parcelshops & retail outlets and market-leading delivery performance with 24/7 access ~2,750 machines with 280,000 compartments available each day Currently situated in more than 1,600 cities nationwide. 90% of the German population are within 10 minutes of a Parcelstation driven by the best people and best network ~90% next day delivery ~98% second day delivery ~95% first time delivery attempt success as regularly confirmed by customer surveys Every household in Germany covered Sorting capacity of 1 million parcels per hour 60,000* qualified, committed parcel & joint parcel/ post delivery personnel (~98% in house) Employer of choice in competitive labor market: Stiftung Warentest CSR Test winner We have the best network and value proposition for our customers INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 19

20 DHL PARCEL EUROPE: STATUS UPDATE ON MARKET COVERAGE Flexible approach to address international e-commerce opportunities in Europe Leverage legacy DHL assets through shift to PeP Partnership with locally established players Greenfield market entries Assets shifted from DHL to PeP B2C market entry Stake in Relais Colis DHL PAN-Nordics/Baltics partnerships 2014: Poland, Czech Republic, Belgium, Netherlands, Luxembourg 2015: Sweden 2016: France (27.5% Relais Colis stake); Finland, Norway, Denmark, Latvia, Estonia, Lithuania through DHL PAN- Nordics / Baltics partnership 1) 2015:Slovakia, Austria, Since April 2016: Harmonized European Parcel product covering 15 European e-commerce destinations 1) With Finnish postal operator Posti and Bring, a subsidiary of the Norwegian postal operator Revenue Parcel Europe, FY15: EUR 735m (+8.7% yoy, organic: +8.1%), Q2 16: EUR 209m (+18.1% yoy, organic: +20.3%) INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 20

21 DHL ecommerce: E-COMMERCE GROWTH OUTSIDE EUROPE DHL ecommerce Americas Consolidation and sorting of domestic and international mail and parcels #4 in parcel market for US (SmartMail product) with 18 distribution centers 2 regionalized, vendor-neutral e- fulfillment warehouses in LA and Columbus. Others to open in 2017, leveraging DSC warehousing expertise and USPS lastmile network Toronto/Mexico city centers opened, further LATAM facilities to follow in 2017 DHL ecommerce Asia Market leader in Indian B2B and B2C with Blue Dart E-fulfillment facilities in Delhi and Bangalore in conjunction with DSC Strong growth in Chinese outbound e-commerce business with >100k shipments/day from 3 distribution centers to destinations mainly in Europe and the U.S. Jan 2016 launch of domestic B2C delivery services in Thailand Revenue DHL ecommerce: FY15: EUR 1,240m (+23.5% yoy, organic: +6.1%), Q2 16: EUR 318m (+8.5% yoy, organic: +11.3%) INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 21

22 PeP: STRUCTURAL REDUCTION IN PERSONNEL FACTOR COSTS DUE TO LAUNCH OF NEW PARCEL DELIVERY UNITS Average wages, in EUR/h Currently ~9,600 employees * Legal minimum wage until Dec 31, * 8.50* 8.50* 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 given lower average wage level INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 22

23 LONG TERM WAGE AGREEMENT FINALIZED Tariff agreement until Jan 31, October 2015: one-time payment October 2016: +2.0% 1 October 2017: +1.7% No change to 38.5 working hours Extension of no redundancy agreement until 2019 No more outsourcing limit for parcel delivery, but job commitment for current DP parcel delivery staff; no outsourcing of letter or joint delivery until end 2018 DHL Delivery entities remain in place: expect further hiring of dedicated Parcel delivery employees to support dynamic Parcel growth Comprehensive package for all stakeholders safeguarding PeP competitiveness and facilitating further profitable growth INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 23

24 WORKING DAYS GERMANY Q Q H Q M Q H FY INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 24

25 Focus. Connect. Grow. EXPRESS INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 25

26 EXPRESS: STRONG, BROAD-BASED TDI GROWTH CONTINUES Time Definite International (TDI) 1) Revenues per day in EUR m 42,0 Q Time Definite International (TDI) Shipments per day 000s 758 Q % +8.2% 43,8 Q Q Business Highlights Continued strong TDI volume growth of 8.2% as global B2B growth driven by our unparalleled international footprint and market share gains is supplemented by strong growth in cross-border B2C Volume growth continues to be supported by all regions: Americas (+9.0%), Europe (+8.9%), Asia/Pacific (+6.9%) and MEA (+6.6%) Growth in revenue/day remains well below volume/day due to significantly lower fuel surcharges yoy. Yield management initiatives continue to bear fruit, including additional countermeasures to manage FX headwinds 1) Currency translation impacts are eliminated. Data aggregated with same currency rate INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 26

27 EXPRESS DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,455 3, % EBIT % Strong TDI volume increase continues to drive Express growth. Revenue up +7.2% when adjusting for FX and lower fuel surcharges Strong EBIT growth driven by continued TDI volume growth as well as yield and cost initiatives. EBIT margin increase to a record level of 11.9%, supported by slower reported revenue growth Operating Cash Flow % Reflecting good EBIT performance and working capital improvements Capex % Acceleration in line with planned investments into international hub and gateway infrastructure upgrade INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 27

28 DHL EXPRESS: FOCUS ON TDI Continue successful FOCUS strategy DHL Express Core Product 2009 Revenue distribution 2015 Revenue distribution TDI (Time Definite International) - The premium segment within Express Industry 13% 4% 12% 10% 61% 2% 4% 11% 8% 75% TDI TDD DDI DDD ACS / Other Time Definite = Dedicated delivery at a scheduled time of day International = Cross-Border Shipment (intra- or between continents) TDI: requires dense and broad international network TDD: Time Definite Domestic Revenue Share = Delivery at scheduled time within one country. DDI: Day Definite International DDD: Day Definite Domestic ACS: Air Capacity Sales (re-sale of spare capacity on dedicated fleet to optimize utilization, not sold by core Express sales teams) INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 28

29 DHL EXPRESS: GLOBAL TDI MARKET SHARES Continued TDI leadership across all regions outside the Americas Americas [EUR 6.8bn ] 1% 3% +1% 18% 46% 32% Europe [EUR 6.0bn] 12% 10% 41% 12% +1% 25% Asia Pacific [EUR 6.8bn] 21% 4% 44% 11% +2% 20% Global [EUR 20.1bn] +x% Change vs 2012 MI study DHL TNT UPS FedEx Others 6% 12% 34% Source: MI study 2014 EU : AT, DE, DK, ES, FR, IT, NL, RU, TR, UK AM : BR, CA, CL, CO, CR, GT, MX, PA, PE, US AP : CN, HK, IN, JP, KR, SG GLOBAL : EU + AM + AP + (AE + SA + ZA) 22% 26% +1% INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 29

30 DHL EXPRESS: VIRTUAL AIRLINE MODEL & AIR CAPACITY SALES Virtual Airline Approx. 500 airports and 22 major hubs connected through 1. Dedicated air: >250 aircraft with 17 partner airlines on >600 daily flights 2. Purchased air: >300 commercial airlines with >1,800 daily flights 52% Capacity Commitment 22% 26% 0-90 Days (incl. Purchased Air) Days Fixed BSA CORE TDI CAPA- CITY FLEX ACS GUAR. Air Capacity Sales Block Space Agreement, guaranteed air cargo product. Express TDI core product, capacity based on average utilization, adjusted on a daily basis CORE Flex & Air Capacity Sales Flex, a set amount of the Total Spare Capacity to be utilised for TDI core volume surge and/or air cargo filler traffic Air cargo guaranteed, a set amount of the Total Spare Capacity guaranteed for priority traffic & key customers INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 30

31 Focus. Connect. Grow. FORWARDING, FREIGHT INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 31

32 GLOBAL FORWARDING, FREIGHT: FOCUS REMAINS ON TURNAROUND Air freight 000s Tons Air freight gross profit Business Highlights -4.7% -4.5% EUR m Q Q Q Q Ocean freight 000s TEU 1) Ocean freight gross profit +3.1% +14.2% EUR m Air freight volume continues to decline as we retained our selective stance in overall subdued market Ocean volume growing close to market, showing some improvement in both Asia and Europe (import and export) Selective focus on profitable volumes continued to pay off with divisional GP up +1.4% Turnaround measures continue to drive improving performance on GP and EBIT level Q Q Q Q ) Twenty Foot Equivalent Unit INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 32

33 GLOBAL FORWARDING, FREIGHT DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,778 3, % Revenue decrease driven by lower freight rates, volume decline and FX effects. Decline of -3.1% if adjusted for FX and lower fuel prices Gross Profit % Selective stance drives slight increase in GP despite volume decline in AFR EBIT % EBIT increase driven by turnaround measures and GP focus Operating Cash Flow % Continued good conversion of EBIT into OCF Capex % Decrease due to expected yoy lower IT spend and timing of planned 2016 investments INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 33

34 Focus. Connect. Grow. SUPPLY CHAIN INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 34

35 SUPPLY CHAIN: STEADY BUSINESS PROGRESS AND ORDER INTAKE New signings, EUR m 1) 1) Annualized revenue Revenue by sector Q Q Q Others Financial Services 9% Engineering & Manufacturing 4% 5% Life Sciences & Healthcare Technology 10% 11% 13% 25% 23% Retail Consumer Business Highlights Order intake slightly up yoy driving H1 intake on par with Main orders in Q2 signed in Automotive and Consumer sectors Changed accounting treatment of renewed NHS contract lead to EUR 480m of revenue no longer recognized in Q2 16 vs Q2 15 basis effect to lapse as of Q4 16 Gains from King s Cross stake sale (EUR 63m in Q1 2016) as planned used for further restructuring expenses (Q2 16: EUR 16m, Q1 16: EUR 25m) Automotive INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 35

36 SUPPLY CHAIN DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 4,045 3, % Growth of +4.4% adjusted for FX, fuel and the change in revenue recognition of the NHS contract; reflecting new business wins EBIT % Q EBIT includes EUR 16m restructuring costs. Adjusted performance on par with previous year as restructuring benefits and base business growth was offset by yoy lower real estate gains Operating Cash Flow >+100% Overall improvement in WC plus adverse phasing effects in previous year Capex % Capex increased in connection with new customer contracts INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 36

37 DHL SUPPLY CHAIN: SOLUTIONS OVERVIEW Offering Customized Solutions Across the Entire Supply Chain Plan Source Make Deliver Return Revenue by Service Area FY 2015 Warehousing Value Added Services 27% Supply Chain Consulting Inbound Warehousing Outbound & Distribution Aftermarket 42% 31% Transportation Our core services: Warehousing Transportation Value Added Services INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 37

38 Appendix INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 38

39 GROUP P&L Q EUR m Q Q Chg. Management comments Revenue 14,700 14, % EBIT % t/o PeP >100% t/o DHL % Reflecting negative FX, lower fuel prices and the new NHS contract structure. Excluding these effects, Group revenue is +4.1% above LY Strong increase reflects continued good growth in Parcel and Express, DGF turnaround as well as prior year one-off effects Best PeP Q2 EBIT since Q Strong increase reflects very good operating performance in Post and Parcel as well as prior year strike effect Continued growth path in Express and turnaround in DGF; Supply Chain as planned with further restructuring charges Financial result % Reflects lower interest cost on provisions and positive FX effects Taxes % Increase due to higher EBIT, tax rate 14% as expected Cons. net profit 1) % EPS (in EUR) 2) % Net profit and EPS increase as a result of strong EBIT growth and improved financial result 1) Attributable to Deutsche Post AG shareholders; 2) Undiluted INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 39

40 FREE CASH FLOW Q Pension funding of EUR 1bn affects OCF and FCF; strong operating cash generation EUR m Q Q Pension funding Q adj. Cash from operating activities before changes in Working Capital , Changes in Working Capital Net cash from operating activities after changes in Working Capital , OCF is lower as a result of EUR 1bn pension funding which flows through the change in provisions (while proceeds from debt financing are not recognized in FCF) Excluding this effect, OCF significantly improved driven by EBIT increase as well as lower provision utilization and positive working capital contribution Net Capex Cash out for Capex increasing as planned Net M&A Net Interest disposal proceeds of Sinotrans stake (DGF) and King s Cross development stake (DSC) were recognized in net M&A Free Cash Flow , FFO/Debt at 25.2% (March 31: 26.5%) INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 40

41 NET DEBT (-)/LIQUIDITY (+) Q2 net debt increase sees usual Q2 pattern with annual DPDHL dividend payment of EUR 1.027bn as well as an increase due to pension funding and start of share buyback program -1, Inc. EUR -1 bn pension funding effect -1, ,027 Incl. return of cash collateral from EU state aid EUR 378m and EUR -190m for share buy back program -27-3,508 in EUR m Net debt (Dec 31, 2015) OCF before change in W/C Changes in W/C Net capex Net interest Dividend Paid Net Other effects incl. M&A Net debt (Jun 30, 2016) INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 41

42 PENSION FUNDING EXERCISE 2016 Taking advantage of low interest rate environment to increase funding ratio with (small) positive impact on OCF and net income Bond issuance, March 23, 2016: - EUR 750m, 5-year, 0.375% coupon - EUR 500m, 10-year, 1.250% coupon 1.25bn proceeds at average coupon of 0.725% Pension funding, EUR 1 bn, April 1, Accounted as utilization of provision, hence reducing Q2 OCF/FCF by the funding amount - Additional return on plan assets to reduce pension benefits payments out of OCF - Funding ratio now at 67% vs 62% at end of Q1 Expected higher return on plan assets vs. average coupon should lead to small positive effect on net income and OCF No change of debt ratings expected 17,596 6,641 Increase due to interest rate movement Increase due to pension funding 18,225 6,091 10,955 12,134 Mar 31, 2016 Jun 30, 2016 Discount Rate Germany UK Other Total Total DBO Net Pension Provison Plan Assets Mar 31, % 3.5% 2.18% 2.59% Jun 30, % 3.00% 1.93% 2.28% in EUR m INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 42

43 EBIT BRIDGE Step up in 2016 EBIT driven by operating performance and non-recurrence of 2015 effects In EUR m 3,400-3, m ~380m ~ -240m 2, m ~200m + NFE write down + NFE roll back + H2 one-offs + DSC restructuring + PeP Strike effect + DGFF restructuring - DGFF, Sinotrans stake sale - EXP write up - DSC real estate (King s Cross) PeP: Exp: - Stamp price increase - Next wage increase in Q4 - TDI growth - FX countermeasures DGFF: - Turnaround continues - Restructuring benefits DSC: - Restructuring benefits - Revenue growth 2015 As announced on OCT 28 Major 2015 one time investments and costs Major positive 2015 one time effects 2016 organic operating improvement: ~10-20% 2016e INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 43

44 STABLE CAPITAL INTENSITY EXPECTED Gross Capex / Sales ratio - Group & by division 7,0% 6,0% 5,0% Gross Capex intensity, average EXPRESS ~4% PeP ~3% 4,0% 3,0% SUPPLY CHAIN ~2% 2,0% FORWARDING ~1% 1,0% 0,0% GROUP AVERAGE ~3% EXPRESS GROUP PeP SUPPLY CHAIN DGF INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 44

45 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 PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR BUY ANY SECURITY, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS PRESENTATION IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW. COPIES OF THIS PRESENTATION AND ANY DOCUMENTATION RELATING TO THE OFFER ARE NOT BEING, AND MUST NOT BE, DIRECTLY OR INDIRECTLY, MAILED OR OTHERWISE FORWARDED, DISTRIBUTED OR SENT IN OR INTO OR FROM AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. THIS DOCUMENT REPRESENTS THE COMPANY S JUDGMENT AS OF DATE OF THIS PRESENTATION. INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 45

46 INVESTOR RELATIONS CONTACTS Martin Ziegenbalg, Head of Investor Relations Robert Schneider Sebastian Slania Sarah Bowman Christian Rottler INVESTOR RELATIONS CURRENT PRESENTATION AUGUST 2016 PAGE 46