Deutsche Post DHL Belgium Luxemburg Roadshow

Transcription

1 Deutsche Post DHL Belgium Luxemburg Roadshow Robert Schneider Daniel Stengel Investor Relations 4 5 April 2013

2 Following our strategic roadmap continuing to deliver Performance on track Structural growth drivers intact Confirmation of mid-term targets 2012 EBIT growth of 9% to 2.665bn Delivering on Mail stabilization with EBIT of 1.051bn DHL EBIT CAGR of 15.3% in Dividend proposal: 0.70, with 53% pay-out ratio Emerging markets drive growth across DHL divisions E-commerce trend fuels continued Parcel growth Continuous focus on simplifying customer solutions and our own processes MAIL: stabilization of EBIT at min. EUR 1bn DHL: 13-15% CAGR in ; leveraging our strong global footprint and structural growth drivers EBIT increase to drive strong FCF performance EBIT guidance 2013 of EUR bn 2

3 Agenda Strategy continues to deliver Structural trends sustain growth Mail: Parcel growth counters mail decline DHL: Exploiting strength in global growth markets 3

4 Solid operational performance in a challenging macro environment FY 2012 divisional overview EUR m Revenue EBIT 1) FY2011 FY2012 Change FY2011 FY2012 Change MAIL 13,973 13, % 1,107 1, % EXPRESS 11,691 12, % 916 1, % FORWARDING, FREIGHT 15,118 15, % % SUPPLY CHAIN 13,223 14, % % GROUP 52,829 55, % 2,436 2, % 1) EUR -61m yoy EBIT effect from VAT charge (EUR -151m MAIL, EUR -30m EXPRESS), EXPRESS Q2 effects (EUR +143m) and disposal gain in SUPPLY CHAIN in Q (EUR +23m) 4

5 2012 guidance fulfilled Group and Divisional 2012 EBIT Guidance ) Actual 2012 Group EUR 2.6bn EUR 2.7bn EUR 2.665bn Mail EUR bn EUR 1.051bn DHL divisions ~ EUR 2.0bn EUR 2.036bn Corp. Center/ Other ~ EUR -0.4bn EUR bn 1) Most recent guidance; initial 2012 guidance was for Group EBIT of EUR bn with DHL Divisions at ~ EUR 1.9bn 5

6 Net Debt (-)/Liquidity (+) Excluding the non-recurring items, strong Q4 free cash flow of EUR 887m would have driven financial position to solid net liquidity EUR m +2,244 1) -1, EUR -1,912m 2) pension funding EUR -298m state aid payment EUR -482m VAT agreement EUR -140m Cost of Change ,832-1,952 Dec 31, 2011 Operating Cash Net Capex Flow excluding non-recurring items Net dividend All other Dec 31, effects excl. nonrecurring non-recurring items items Dec 31, ) Excluding EUR -321m VAT effect in operating cash flow 2) Pension Funding in total amounts to EUR 1.986m, but for the issued convertible bond EUR 74m of the total funds are accounted for as equity and are therefore not considered in net debt 6

7 2012 dividend recommendation: Stable, within target ratio EUR % EUR % EUR ) 60% We will propose a dividend of EUR 0.70 to the AGM in May, i.e. dividend payments to DPDHL shareholders of EUR 846m 53% 40% Adjusted for non-recurring items this reflects a payout ratio of 53% In line with our dividend policy: target payout ratio of 40 60% Underlying Payout Ratio 1) 1) Adjusted for Postbank effects as well as non-recurring items 2) Proposal to AGM 7

8 Full-year 2013 Guidance EBIT Group EUR bn Mail EUR bn DHL divisions EUR bn Corp. Center/ Other ~ EUR -400m Free Cash Flow Free Cash Flow To at least cover 2012 dividend Gross Capex of EUR ~1.8 bn Net income growth in line with operating profit development 8

9 Agenda Strategy continues to deliver Structural trends sustain growth Mail: Parcel growth counters mail decline DHL: Exploiting strength in global growth markets 9

10 Structural trend Emerging Markets : DHL building on global footprint and leadership Emerging Markets drive growth across DHL Divisions Express Forwarding Supply Chain Revenue 1) : EUR bn 9.6 CAGR +9% 12.4 Revenue 1) : EUR bn 7.8 CAGR +14% 11.4 Revenue 1) : EUR bn 12.0 CAGR +6% % 24% +13% +20% 15% 32% % 26% +23% +14% 15% 26% % 7% 6% 11% 8% +21% Global TDI leadership with key strengths in growth markets Global No. 1 in air freight, No. 2 in ocean freight Market leader in contract logistics in Asia and Latin America Asia Pacific LATAM, MEA 1) Based on external 3rd party revenue, region according to customer invoice 10

11 Structural trend E-Commerce : Strong growth driver in Germany and beyond Continued e-commerce boom in Germany Cross-border services All-time parcel volume record in Dec More than 7 m parcels/day during absolute peak (18-20 Dec.2012) Up to 0.5 m parcels/day more than 2011 Continued investment in further growth: At least 25 mechanized delivery sites by end-2013 Double-digit million investment in largest parcel center in Obertshausen Investment in convenience logistics network (successful pilot in Cologne, majority share in online supermarket allyouneed.com) New DHL Easy Return service for EU-based online retailers (launch in Sept by DHL Global Mail) DHL Express TDI service used for timecritical B2C shipments Global E-Fulfillment solutions End-to-end services from Webshop to delivery (offered by DHL Supply Chain) Solutions in place for more than 60 top global brands already 11

12 Structural trend Simplifying industry solutions DHL leads the growing Outsourced Contract Logistics market Huge outsourcing market 1) potential Top 3 market shares, 2011 EUR bn Largest providers Other ~12% Outsourced Contract Logistics In house Logistics 88% ~12% 7.7% DSC 1,121 CAGR 2.4% 2.1% CEVA K+N Largest providers % ) DHL Supply Chain projection based on forecasts from IHS Global Insight and Transport Intelligence 12

13 Mid-term EBIT Targets: EUR bn Group EBIT in 2015 Confirmed and on track MAIL: EBIT stabilization at min. EUR 1bn Fully delivered in DHL: EBIT CAGR of 13 15% CAGR of 15.3% 1) in DHL margin improvements on track EXPRESS Ongoing capacity and service quality investments weight on 2012 margins as expected Margin acceleration expected in % 7.8% 8.7% 7.8% 2) FORWARDING, FREIGHT SUPPLY CHAIN Excl. NFE implementation costs, EBIT margin expansion would have been even greater NFE implementation to intensify in 2013: high double digit EUR million yoy increase in NFE costs expected Focus on Contract Lifecycle Management and more integrated solutions delivered steady margin improvement 2.8% 2.1% ) 2.9% % 2.7% 2.9% 1) 2012 EBIT excl. EUR 113m one-off items from VAT, restructuring provision release and disposal gain in Q2 2012; CAGR of 18.6% based on reported 2012 EBIT 2) EXPRESS FY2012 margin excl. EUR 113m one-off items from VAT, restructuring provision release and disposal gain in Q ) FY2010 margins excl. non-recurring items (restructuring)

14 2015 Targets confirmed: MAIL EBIT stabilization, 13 15% growth in DHL EBIT to EUR bn Group EBIT of EUR 3.35 bn to 3.55 bn in 2015 MAIL EBIT stable at a minimum of EUR 1bn DHL DHL EBIT, in EUR bn CAGR 13-15% 2.0 ~2.1 2) ) Corporate Centre/Other Improvement to EUR -350m by ) Underlying EBIT 2) 2013 Guidance of EUR bn 14

15 Free Cash Flow Outlook Multiple levers to drive FCF improvement over the next years Major drivers EBIT Changes in provisions Changes in W/C Income taxes paid Net Capex Net M&A Expected Trend from 2013 onwards In line with 2015 guidance: Group EBIT up to EUR bn Utilization of restructuring provisions tailing off, pension payments declining slowly Increasing as business grows but strong focus on working capital management To increase driven by EBIT growth Normalization from current expected gross levels of EUR ~1.8bn in 2013 No need or ambition for major M&A Free Cash Flow EBIT increase to drive strong FCF performance 15

16 Finance Policy Target / maintain rating BBB+ External cash usage Dividend payout ratio to remain between 40 60% of net profit (continuity and Cash Flow position considered) Excess liquidity will be used for Share buybacks and/or extraordinary dividends Stepwise pension funding 1) 0,60/ 0,65/ 0,70 per share for the years 2009, 2010,

17 Agenda Strategy continues to deliver Structural trends sustain growth Mail: Parcel growth counters mail decline DHL: Exploiting strength in global growth markets 17

18 MAIL: Parcel growth counters letter mail decline Mail Communication volumes Highlights m units -3.6% 2,059 1,984 7, % 7,578 Limited Mail volume decline as expected potential future decline is also limited vs. other markets as German addressed mail items per capita are already low 1) Q Q FY 2011 FY 2012 GER FR NL UK US Parcel volumes m units +7.2% Q Q % FY 2011 FY 2012 Continued structural growth in Parcel, mostly offsetting the decline in German letter mail -340 Combined FY 2012 revenue decline of letter businesses (Mail Communication, Dialogue Marketing, Press Services) FY 2012 revenue increase in Parcel Further cost optimization, stable headcount Stamp price increase effective per Jan 1, ) UPU postal statistics database, regulatory authorities, Ofcom analysis 18

19 MAIL: Divisional results Q Strong EBIT driven by increasing seasonal contribution from Parcel growth EUR m Q Q Chg. Stable revenue as growth of parcel business offsets the expected decline in Mail Communication Revenue 3,853 3, % EBIT growth driven by Strong growth in Parcel EBIT Operating Cash Flow , % <-100% Improvements in Global Mail Continuous focus on cost management Q effects of wage agreements Capex % Operating Cash Flow impacted by EUR 1.9 bn contribution to pension fund. Underlying OCF supported by strong EBIT performance Capex mainly related to investments in Parcel network upgrade 19

20 MAIL: EBIT stabilization at a minimum of EUR 1bn on track EBIT stabilization: levers delivering despite expected headwinds EBIT Levers delivering Parcel growth: Parcel vol/wd 1) up 11.1% in 2012 (continued e-commerce boom) Digital services: Mid-term contribution Pricing: Mail price increase as of Jan. 1st, 2013 Ongoing cost optimization: Network & labor flexibility/productivity improvement Stabilization EBIT Headwinds as expected E-substitution: Mail Communication vol/wd 1) down 1.8%% yoy in 2012 Digital services: Short-/medium-term investing phase Factor cost increases FY 2012 moreover impacted by one-off effects: VAT settlement, Neckermann insolvency, fewer working days 1) Volume per working day 20

21 Agenda Strategy continues to deliver Structural trends sustain growth Mail: Parcel growth counters mail decline DHL: Exploiting strength in global growth markets Express Global Forwarding, Freight Supply Chain 21

22 DHL Express: Strong TDI growth continues Time Definite International (TDI) Revenues per day in EUR m Q Time Definite International (TDI) Shipments per day 000s % +10.5% Q FY % +9.4% 31.2 FY Highlights Market leadership further expanded throughout the year driven by Focus on TDI Leading international express network with strongest market positions in high growth regions, esp. Asia Further capacity enhancements and improvement of service levels Best rated provider in terms of overall global customer satisfaction, customer loyalty index, product and service range 1) Opening of new North Asia hub in Shanghai in summer Also upgraded hub/gateway capacities in Cincinnati, Miami and Mexico Q Q FY 2011 FY ) CI Report 2012; providers in scope: DHL, FedEx, TNT, UPS 22

23 EXPRESS: Divisional results Q Ongoing strong volume growth drives further EBIT improvement EUR m Q Q Chg. Revenue increase driven by ongoing strong growth in our Time-Definite International (TDI) volumes. Organic growth was 6.8% Revenue EBIT Operating Cash Flow 3, , % 14.3% 9.5% Strong EBIT performance driven by high volume growth and increased capacity utilization in Q4 Operating Cash Flow improvement reflects strong profit generation and strict working capital management Capex % Capex remained on high level due to investments in our air network, ground infrastructure and services 23

24 EXPRESS: 2015 EBIT target and key levers % CAGR +13% 15% CAGR EUR 785 m 1) EUR 916 m EUR 1,108 m 1. Leverage strength in fastest growing regions 2. Focus on TDI 3) 3. Further improve customer satisfaction EUR 288 m 4. Continue investments in network and service 5. Leverage cross BU opportunities EUR 497 m 2) 6. Manage cost through operating leverage 7. Increase brand awareness 2010 Business stabilization 2011 Invest for growth 2012 Market share growth 2013 Margin acceleration 2014 Convergence 2015 Renewal 1) Underlying EBIT and before the transfer of Czech domestic business to DHL Freight; 2) Reported EBIT; 3) Time Definite International 24

25 The most international company in the world Presence in over 220 countries and territories, pioneering Express business in many locations 25

26 Market Position in TDI Value Share ( ) Market share expansion continues across all regions Americas [7,352 m ] DHL 16% TNT Others 1% 3% Europe [6,813 m ] FedEx 10% Others 12% Global [21,983 m ] UPS 30% FedEx 50% TNT 14% UPS 23% DHL 41% TNT 7% Others 13% UPS 21% DHL 32% MEA [330 m ] Others 29% Asia Pacific [7,487 m ] Others 23% FedEx 27% UPS 3% FedEx 9% TNT 10% DHL 49% TNT 6% UPS 10% FedEx 21% DHL 40% 4 ppt increase vs previous year Source: MI study 2012, annual reports and desk research AM: AR, BR, CA, CL, CO, CR, MX, PA, VE, US; EU: AT, BE, CH, CZ, DE, DK, ES, FR, IL, IT, NL, NO, PL, RU, SE, TR, UK; MEA: AE, ZA ; AP: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN 26

27 Agenda Strategy continues to deliver Structural trends sustain growth Mail: Parcel growth counters mail decline DHL: Exploiting strength in global growth markets Express Global Forwarding, Freight Supply Chain 27

28 FORWARDING, FREIGHT: Good operating performance in a volatile environment Air freight 000s Tons -5.3% -3.2% 4,378 4,147 1,105 1,070 Q Q FY 2011 FY 2012 Ocean freight 000s TEU 1) +4.3% +2.8% 2,724 2,840 Highlights Decline in air freight volumes and slow growth in ocean freight volumes reflect weak global trade growth, structural factors and ongoing shift from air to ocean freight Q4 Air freight volume decline moderated due to higher Asian demand. Modest ocean freight growth in Q4 due to the lack of a peak season FY 2012 Forwarding gross profit margin increased from 22.2% to 22.9% NFE project implementation progressing fully in line with plans Q Q FY 2011 FY ) Twenty Foot Equivalent Unit 28

29 FORWARDING, FREIGHT: Divisional results Q Solid EBIT and Cash Flow performance in a still soft environment EUR m Q Q Chg. Revenue up 0.8%, mainly driven by positive exchange rate impact. Air Freight volumes remained soft, Ocean Freight volumes increased Revenue EBIT Operating Cash Flow 3, , % 27.7% -9.5% EBIT growth of 28% supported by selective growth strategy and overhead cost management. EBIT continues to include operational expenses for NFE implementation Capex % Operating Cash Flow slightly down yoy due to timing effects Capex reflects timing effects of NFE implementation 29

30 GLOBAL FORWARDING, FREIGHT: 2015 EBIT target and key levers % CAGR Volume & Gross Profit Improvement Volume growth due to exposures to emerging markets +13% 15% CAGR EUR 512 m GP 2) margin improvement due to enhanced IT (enhanced buying due to better transparency) EUR 383 m 1) EUR 440 m Cost Improvements Productivity gains due to economies of scale Indirect costs savings due to optimization of regional and country organizational structures Efficiency gains due to new IT (NFE) Road Freight ) EBIT before the transfer of the Czech domestic business from DHL Express to DHL Freight 2) Gross Profit 30

31 New Forwarding Environment (NFE) NFE purpose Timetable NFE is our business & IT transformation program which will increase customercentricity and simplify business processes based on state-of-the-art IT capabilities. Forerunner roll-out completed moved to implementation phase High double digit EURm increase in Opex expected in 2013 Full roll-out expected to be complete by 2014/ State of the Art Customer Service Transparency of shipments Reduced direct operating costs and complexity High reliability of data due to higher automation and standardization Provider of Choice 2 Investment of Choice Employer of Choice Higher profitability Enhanced steering capabilities Higher leverage of purchase power Industry leadership Accessibility of data & information Simplified work Clear roles & responsibility 31

32 Agenda Strategy continues to deliver Structural trends sustain growth Mail: Parcel growth counters mail decline DHL: Exploiting strength in global growth markets Express Global Forwarding, Freight Supply Chain 32

33 SUPPLY CHAIN: Benefitting from continued outsourcing demand New signings, EUR bn 1) Revenue by Sector FY 2012 Others Williams Lea 6% Retail Energy 9% 25% 3% Automotive 9% Business performance Steady revenue growth continues despite volatile macro-economic environment More integrated and sector-specific solutions enable New wins with higher margins New business signings again worth more than EUR 1bn of annual revenue Continuous improvement along the entire contract lifecycle further contributing to steady improvement of EBIT margin, reaching 2.9% in 2012 Technology 11% 19% Life Sciences & Healthcare 18% Consumer 1) Annualized revenue 33

34 SUPPLY CHAIN: Divisional Results Q Ongoing steady performance across all metrics EUR m Revenue EBIT Operating Cash Flow Capex Contracts won Annualized revenue Supply Chain New gains Q , Q , Chg. 5.2% 57.5% 50.3% 16.4% Revenue increase supported by growth in all regions as well as small positive currency impacts. Organic growth of 2.4% Strong EBIT growth reflects steady improvement in our contract portfolio, new start-ups and continuous cost management as well as a positive base effect from integration costs (Tag Group) contained in Q EBIT Operating Cash Flow increase mirrors EBIT growth, supported by enhanced working capital focus New contracts signings remain strong despite subdued economic environment in mature regions. Q4 saw strongest signings in the consumer sector 34

35 SUPPLY CHAIN: 2015 EBIT Target and Key Levers % CAGR Contract Lifecycle Management EUR 362m EUR 416m Drive continuous improvement in project selection, design, execution and overall performance Standardization & Replication +13% 15% CAGR EUR 272m 1) Identify, leverage, and grow best practice globally Sector Focus Differentiate with sector-specific solutions Leverage expertise to drive growth, especially in first time outsourcing and Emerging Markets ) EBIT excluding restructuring 35

36 Contract Lifecycle Management Continuous feedback loops improve project selection, design, execution and overall performance Opportunity Assessment Helps to refine 10,000 potential opportunities into 4,600 defined opportunities Consultative Selling & Solution Design Further refines and defines the win strategy on 3,000 qualified projects Approval & Closure Implementation & Operational Execution Use of standardized methodologies ensures continuous process optimization 7 Contract Renewal Good visibility and best practice account management ensure high customer retention 6 Account Management A.M. Excellence Principles including Joint Business Plans earn customer loyalty 5 Performance Review Post implementation review along 3 bottom lines to ensure that project is fully aligned with our principles 36

37 Continued focus on execution of Strategy 2015 SUMMARY Successful delivery on all targets in a volatile year Key business drivers intact for all divisions Continued strong focus on further optimization of our businesses in line with our strategy EBIT increase to drive strong Free Cash Flow performance Still lower-than-trend macro environment, but we are committed to deliver on our 2013 and longer term targets 37

38 Agenda Strategy continues to deliver Structural trends sustain growth Mail: Parcel growth counters mail decline DHL: Exploiting strength in global growth markets Appendix 38

39 Deutsche Post DHL at a Glance 2012 key figures Group: Sales: EUR 55,512m; EBIT: EUR 2,665m; Employees 1) : 428,287 Domestic German Mail and Parcel International and Domestic Express Global Air, Ocean and Road Freight Global Supply Chain Solutions Sales: EUR 13,972m Sales: EUR 12,778m Sales: EUR 15,666m Sales: EUR 14,340m EBIT: EUR 1,051m EBIT: EUR 1,108m EBIT: EUR 512m EBIT: EUR 416m Empl. 1) : 146,923 Empl. 1) : 84,623 Empl. 1) : 43,590 Empl. 1) : 140,193 The postal service for Germany The logistics company for the world Corporate Center / Other: Sales: EUR 1,203m; EBIT: EUR -422m 1) Average FTEs FY

40 Group P&L FY 2012 Profitable growth continued in difficult macro environment EUR m FY 2011 FY 2012 Chg. Sales growth of 5.1% driven by DHL Divisions and positive currency effects. Organic revenue growth of +2.2% with +3.1% at DHL Revenue 52,829 55, % EBIT 1) 2,436 2, % t/o MAIL 1,107 1, % t/o DHL 1,718 2, % Financial result % EBIT increase of 9.4% includes EUR -61m net effects from extraordinary items 1). EBIT growth driven by double-digit growth in all DHL Divisions FY 2012 financial result impacted by Postbank disposal effect of EUR +186m (FY 2011: EUR 301m) and VAT related interest costs of EUR -115m Taxes Consolidated net profit 2) , , % +42.6% Increase in taxes reflects strong operating performance. Full-year tax rate reduced to 20.5% due to further activation of tax loss carry-forwards EPS (in EUR) % Net Profit excl. Postbank, VAT and nonrecurring EXPRESS Q2 effects improved by 10.3%, in line with operating performance 1) EUR -61m yoy EBIT effect from VAT charge (EUR -151m MAIL, EUR -30m EXPRESS), EXPRESS Q2 effects (EUR +143m) and disposal gain in SUPPLY CHAIN in Q (EUR +23m) 2) Attributable to Deutsche Post AG shareholders 40

41 Group P&L Q As expected, strong operational performance in all Divisions EUR m Revenue EBIT t/o MAIL t/o DHL Q , Q , Chg. +3.2% +38.1% +51.6% +25.3% Revenue increased 3.2% with flat contribution from Mail and +4.4% DHL growth driven by Express and Supply Chain. Group organic growth was +1.8% Expected strong Q4 EBIT reflects Structural and seasonal Parcel strength driving EBIT increase in MAIL Strong year-end in all DHL Divisions Financial result % Base effects from one-off cost factors as flagged in Q Taxes Consolidated net profit 1) EPS (in EUR) <-100% >+100% >+100% Change in Financial Result mainly due to Postbank effects (Q4 11: EUR -194m) Net profit excl Postbank effects is up by 46.9%, reflecting EBIT growth and lower tax rate 1) Attributable to Deutsche Post AG shareholders 41

42 Cash conversion FY 2012 Cash utilization driven by capex, change in provision and dividend in m +1,339 4, Adjusted for: Pension Funding -1,986 m Restructuring -239 m VAT -203 m 2, Adjusted for: Disposal Gain -44 m VAT 63 m 2,244-1,414 Adjusted for: VAT Interest -161 m , ,885 EBIT Depreciation EBITDA Change Taxes Others in Provisions incl. changes in W/C Adjusted for: Provision Release 99 m Disposal Gain 44 m VAT -181 m OCF excl. nonrecurring items Net Capex Net M&A Interest paid FCF excl. nonrecurring items Dividend Pension Funding VAT Cost Reported of FCF Change 42

43 Cash conversion DPDHL transitioning to high Cash Flow generation EBIT Performance Mail High, but decreasing High, but decreasing Stable Stable DHL Low Improving Strong improvement High Level of Capex Average Low High Average Level of M&A Very high Very low Very low Very low Restr. cash requirement Low Very high Low Very low Special factors State aid ( ) State aid (+) Postbank sale (+) State aid ( ) VAT ( ) State aid (+)? 43

44 Pensions: Effects of lower discount rates and pension funding EUR m Total Defined Benefit Obligation (DBO) EUR 13,259m Lower discount rates 1) lead to higher DBO Total DBO EUR 14,748m Total DBO EUR 14,748m Plan assets 7,369 7,772 Bond issue used to increase plan assets by EUR 1,986m 9,758 Unrecognized gains/losses Net Pension Provision 1,898 3,992 unrecognized losses increased 3,082 3,894 pension provision reduced 3,082 1,908 Dec 31, 2011 Dec 31, 2012 Excl. pension funding Dec 31, 2012 as reported Funding ratio 2) improved from 56% (Dec 31, 2011) to 66% (Dec 31, 2012) 1) Discount rates per : Germany 3.70%, Great Britain 4,50%, Other Eurozone 3,70%, Switzerland 1.75%, USA 4.00%; 2) Funding ratio = plan assets / total DBO 44

45 Pensions: Effects of IAS 19R implementation IAS 19R implementation as of Jan 1, 2013 EUR m Plan assets Unrecognized gains/losses Net Pension Provision Total Defined Benefit Obligation 14,748m 9,758 3,082 1,908 Dec 31, 2012 as reported unrecognized gains/ losses included within net pension provisions Total Defined Benefit Obligation 14,748m 9,758 4,990 Dec 31, 2012 Preliminary according to IAS 19R Expected effects in ) Staff costs to increase by ~ EUR 10m. This is mainly based on lower discount rates 2) Finance costs ~ EUR 90m lower, reflecting the mix of Lower income as return rate on plan assets is assumed to be equal to discount rate Higher income on plan assets through ~ EUR 2.0bn funding Lower cost due to lower discount rates Balance sheet: unrecognized gains/losses included within net pension provision; equity position to be reduced by a similar amount (per : EUR 3.1bn) No cash impact from accounting change to IAS19R 1) Compared to 2012 as reported 2) Discount rates per : Germany 3.70%, Great Britain 4,50%, Other Eurozone 3,70%, Switzerland 1.75%, USA 4.00% 45

46 The new price-cap formula offers opportunities for future price increase The new price-cap formula Price-cap = inflation x-factor x-factor reduced from 1.8% to 0.6% Reference period 1) brought forward by 6 months Regulation valid until December 31, 2013 provides opportunities for potential future price increases No price increase for 2012 instead buffer of 1.2% carried over to ) 2.2% inflation in 2013 reference period allows for additional pricing headroom of 1.6% Average price increase of 2.8% 3) on Jan 1, 2013, standard letter stamp increase from 0.55 to 0.58 Indicative example based on 2011 revenue EUR billions 3.5 4) %! After 15 years, we have the opportunity to compensate volume decreases also by increasing prices 1) For relevant CPI = German Consumer Price Index; 2) 1.2% = 1.8% inflation rate minus 0.6% x-factor; based on arithmetic average of the monthly CPI values from July June 2011; 3) 2,2% inflation rate - 0.6% x-factor + 1.2% carryover = 2.8% price increase, based on weighted average across the relevant Mail product portfolio as per price-cap regulation; reference period for 2013 price cap is July June 2012; 4) 2011 revenues affected by under price-cap regime 46

47 With DHL Parcel we are shaping a dynamically growing market environment E-commerce is growing strongly... E-commerce sales EUR billions 1) Share of retail spending Percent 2) 8 = 32 bn... and is driving parcel volumes German parcel market: growth of 5-7% p.a. until 2015 B2C growth 11-13% p.a. by e-commerce adoption independent of GDP development % p.a. +11% p.a. 20 = 80 bn B2B growth 3-5% p.a. depending on GDP and export development Convenience as a key driver for e-commerce: 3 out of 4 online shoppers believe e-commerce has improved their quality of life Over 40% claim they save time! We are profiting from a fast growing market 1) Bundesverband des Versandhandels; 2) TNS Infratest und MRSC, Einkaufen 4.0, Gesellschaft für Konsumforschung 47

48 Aim to increase market share and secure growth rates above market average No. of registered customers Millions Simplified services 5.0 Target 2015 Network upgrade Paket 2012 DHL-Fulfillment DHL-checkout will boost our B2C market share Percent Parcel Other will help to grow our B2B market share Percent Parcel Other ! Parcel revenue increase above market growth DHL Germany is a solid growth story 48

49 Parcel Germany: Strategic Focus Parcel Germany is shaping ecommerce as the leading service provider DPDHL only postal organization world-wide to offer nation-wide 24/7 access to all shipping needs 13,500 retail outlets 1,000 Parcel Boxes for 24/7 drop-off 2,500 automatic PACKSTATIONs to drop-off, frank, or use as delivery address Online Franking of all parcel products iphone and Android apps for all services To date 2mn registered Packstation customers 83% check whether vendor ships to Packstation before purchase 36% increase their online spend after registration for Packstation Target group in age segment years with high online affinity Source: Europäisches Handelsinstitut 49

50 We are continuously adapting our operations to the development of mail volumes by increasing efficiency We are improving our letter mail operations 3 Sorting Increase automation rate with state-of-the-art sorting technology (up to 95% of mail volumes) Flexible rerouting and reduction of sorting capacity during lowvolume periods Transport & Delivery Ongoing reduction of delivery districts and personnel (17% reduction since 2002) Increase of packed and sequenced mail directly transported to delivery districts (from 70% to over 90%) Preventive healthcare measures, new delivery equipment to significantly reduce sickness rate (currently 4.8%) Flexible workforce: over 4,000 employees on call at short notice; over 9,000 employees on short term contract resulting in ample cost flexibility! We have numerous cost reduction and optimization levers in place 50

51 Leverage cross business unit opportunities Leverage of one DHL helps to manage risks and recover high investments for network expansion Intercon. capacity utilization DGF contribution CAGR +30% 1.5 Weight Load Factor (Core TDI & Non Core (ACS) Volumes) Capacity million Tons WLF: 70% WLF: 79% WLF: 75% DGF contributes continuously around 18% to our overall cargo loads 1) DGF is our no. 1 ACS customer For DGF we improved from no. 8 in 2010 to the no. 3 supplier in Q ) Including regional capacities 51

52 Focus on TDI Express strategy to focus on TDI is crucial to further drive EBIT and margin development Revenue contribution by product (FY 2011) Other; 26% > Above DHL Express average < At or below DHL Express average Product TDI Margin > Aspiration Comment Focus Strategy Core competence with dedicated scheduled network TDD > Complementary offer TDD; 11% TDI; 63% Other (incl. DDI, DDD, ACS 1) Same Day) < Volume shift to TD platform Opportunistic offer for additional cost recovery Divest over time Positive TDI revenue share development Other, 42% TDI; 58% Other, 39% TDI; 61% Other, 37% TDI; 63% ) ACS: Air Capacity Sales 52

53 Manage cost through operating leverage Our overall network setup as well as concrete programs support the translation of volumes into additional EBIT Overhead cost Save >1% of revenue PuD and handling Save 2.5% per move p.a. One virtual airline Stabilize Reduction of Sales, general and admin expenses as % of revenue IT Convergence E-Com Tools Improved span of control NOEP (Network Optimization and Efficiency Program) to reduce ground handling cost Re-fleeting with shelf vehicles optimize processes and reduce fuel and emissions Capacity management to stabilize CpK (Cost per Kilo) Reduction of commercial air capacity by improved forecasting Flexible leasing arrangements Modernization of fleet to reduce fuel and carbon emissions Fuel price volatility: Industry wide transparent fuel surcharge mechanism FX rate exposure: Global currency portfolio as natural hedge on currency volatility 53

54 Maximized profitability: GP on product level reflects our size advantage and product portfolio 25,7% 20,7% DGF comparable 1) 21% DGF comparable 1) DGF Gross Profit margin 2012 (in %, Air Freight) 24,6% 22,6% Gross Profit margin 2012 (in %, Ocean Freight) 18.9% 19,2% DGF 20,7% 20,2% 17,6% Performance benchmarking on product level is impacted by differences in accounting key DGF competitors allocate value added services to AFR or OFR DGF has chosen to account for VAS separately under category called Others. This allows to measure true performance on product level When relevant VAS (customs, handling, cartage) are allocated to AFR & OFR to improve comparability, DGF s GP margin is in line with peers GP margin in AFR benefits from DGF s large scale, while OFR reflects its share of uncontrolled volumes What about fuel costs? Fuel costs have not a significant impact on DGF as they are passed through costs 1) Including value-added services; Note: GP margin absolute level not fully comparable due to different revenue recognition principles across competitors Source: Official company publications 54

55 SUPPLY CHAIN: Strategic programs in place delivering margin improvement and further growth Contract Lifecycle Management Standardization & Replication Sector Focus Continuous improvement across the entire contract lifecycle Project selection Design Execution Price / risk discipline Identify, standardize and grow global products and solutions Co-Packing Lead Logistics Provider Technical Service Airline Business Solutions Life Sciences & HC platform Differentiate through sectorspecific solutions Global expert communities Be the competent partner for outsourcing in target sectors Leverage DHL customer contacts and brand 55

56 3 Business Case Approval Well designed terms and conditions need to ensure a balance of risk and reward Commercial Area Customer Credit Risk Asset Protection Volumes Savings Liabilities Example Customer bankruptcy Customer requests early termination of contract Customer changes portfolio to larger products Customer expects significant savings from outsourcing Customer requires liability assurance Options Rigorous credit assessment process Maximize protection through clear terms & conditions Back-to-back contracts with service providers Lease commitments underwritten by customer Redeployment of assets leveraging our scale Balance of open and closed book contracts Minimum & maximum volumes Separate payment terms for fixed and variable costs Gain Share schemes with equitable split of rewards, balanced with risks Incentivizing outsourcing by generating more savings for the customer Liability cap (annual & per incident) linked to size of annualized Gross Profit Coverage of inventory loss or damage but exclusion of consequential loss Deutsche Post DHL Page 56 56

57 Structural trend Simplifying industry solutions : Group-wide sector management Key focus sectors Automotive Life Sciences & Healthcare Technology Energy Engineering & Manufacturing Example Life Sciences & Healthcare Logistics market volume: ~ EUR 50bn 1) DHL approach: Industry-specific infrastructure with ~ 120 sector qualified sites globally with ~ 1m sqm of Life Sciences graded warehousing space globally, e.g. Global DHL network of ~ 30 dedicated competence centers 22 depots for Clinical Trial Logistics Industry-specific solutions across all divisions, e.g. Medical Express (EXP) Cold Chain solutions (DGF/F) Good Manufacturing Practices (GMP) level value added services (SC) Industry-specific expertise with ~ 4,000 experts 1) Source: Transport Intelligence, pharmaceutical logistics market only,

58 Standardization & Replication of global products Global products development Overview of global products Assess Identify solutions with potential for growth and differentiation Co-Packing Marketing Solutions Develop Define standards and leverage best practice globally Lead Logistics Provider Grow Focus on target customers, enable teams, and grow the product globally Technical Services Airline Business Solutions Life Sciences & Healthcare Platform 58

59 Corporate Center / Other Aiming to reduce cost of Corporate Center / Other activities to -350m by 2015 CC / Other cost structure, 2011 Reduction to -350m by 2015 Investments into growth & crossdiv. initiatives (e.g. Go initiatives, Smart Truck, Cold Chain) 100% = ~400m 1) ~20% ~25% ~25% Corporate bodies (e.g. CB, SVB) and legal obligations/ foundations ) ) ~50% ~55% -400m -350m Core Corporate Center costs, e.g. Group Finance, e.g. Internal Audit, Treasury, Tax Corporate Communications Corporate Development Corporate Executive HR 1) excluding gains/losses from central FX hedging measures 59

60 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. 60

61 Investor Relations Contacts Martin Ziegenbalg, Head of Investor Relations Robert Schneider Sebastian Slania Sarah Bowman Daniel Stengel