Deutsche Post DHL Group results Q 203 Solid start into the year Larry Rosen, CFO Bonn, 4 May 203
Q 203 Highlights (/2) Delivering solid results in still challenging macro-environment EBIT increase reflects slight revenue growth and further margin improvement including good cost management Unchanged strong volume trends in Parcel and TDI Delivering on our focus areas Express margin starting to accelerate Significant progress in cash generation Full year guidance confirmed Deutsche Post DHL Page 2
Q 203 Highlights (2/2) Strategic and Financial Performance Trends intact Key growth trends DHL emerging markets sales growth yoy change revenue, organic yoy Parcel Germany volume / day +0.9% Asia Pacific +4.9% Express TDI volumes / day +9.6% Latin America +2.8% Forwarding, Freight revenue -.9% Africa / Middle East +3.3% Supply Chain revenue +2.2% DHL, Q EBIT margin by Division 4.2% Express Forwarding, Freight Supply Chain 7.8% 7.7% 8.4% 8.0% ).7% 2.4% 2.4% 2.4% 2.7% 2.4% 2.0%.8% 2.8% 2) 200 20 202 203 200 20 202 203 200 20 202 203 ) Excl. EUR 2m disposal gain (Domestic Express Romania) 2) Excl. EUR 2m charge for customer bankruptcy (Chapter ) Deutsche Post DHL Page 3
Group P&L Q 203 Delivering a solid start to the year EUR m Revenue EBIT t/o Mail t/o DHL Financial result Taxes Q 202 3,364 69 392 4 69-204 Q 203 3,444 7 382 427-44 -47 Chg. +0.6% +2.9% -2.6% +3.9% NA +27.9% Revenue grew +0.6% reflecting fewer working days and FX headwind. Organic revenue growth was.5% (not adjusted for lower working day effect) EBIT improvement mainly driven by further increase at DHL Express. MAIL performed well despite 2.6 fewer working days Financial result comparison base is skewed by final Postbank accounting effect of EUR +86m in previous year Tax rate at 22% against background of recent tax audit closures Consolidated net profit ) EPS (in EUR) 529 0.44 498 0.4-5.9% -6.8% Consolidated net profit and EPS decline due to positive Postbank deconsolidation effect in Q 202. Excl. this final Postbank effect, EPS was up by 46% ) Attributable to Deutsche Post AG shareholders Deutsche Post DHL Page 4
Free Cash Flow Q 203 Significant Free Cash Flow improvement with EUR 56m increase EUR m Cash from operating activities before changes in Working Capital Changes in Working Capital Net cash used in operating activities after changes in Working Capital Net Capex Q 202 637-994 -357-258 Q 203 698-578 20-247 Operating Cash Flow increase driven by EBIT growth, better working capital trend as well as lower restructuring cash-outs Working capital improvement reflects better payables / receivables management as well as EUR 39m positive base effect as Q 202 was burdened by cessation of a factoring program As usual, Q cash flow contains yearly payment for Civil Servant Pensions (EUR 540m) FFO/Debt at 29.6% (year-end 202: 30.5%) Net M&A 2 8 Net Interest -43-3 Free Cash Flow -656-40 Deutsche Post DHL Page 5
Net Debt (-)/Liquidity (+) Net financial liquidity reduced as usual in Q due mainly to civil servants pension payment (EUR 540m) EUR m 698 Includes ca. 75% of annual contribution to civil servant pension fund (EUR -408m) -.952-578 -247-7 -2.250 Dec 3, 202 Operating Cash Flow Changes in Net capex All other March 3, 203 (before changes in Working effects ) working capital) Capital ) o.w. derivatives valuation effects of EUR 7m; net interest paid EUR - 3m Deutsche Post DHL Page 6
Balance sheet impact of IAS 9R implementation IAS 9R implementation as of Jan, 203 in EURm Plan assets Unrecognized gains/losses Net Pension Provision Total Defined Benefit Obligation EUR 4,748m 9,758 3,082,908 Dec 3, 202 as reported under IAS 9 unrecognized gains/losses included within net pension provisions Total Defined Benefit Obligation EUR 4,776m 9,758 5,08 Dec 3, 202 as restated under IAS 9R Total Defined Benefit Obligation EUR 5,026m 9,757 5,269 Mar 3, 203 as reported under IAS 9R Highlights Restated 202 balance sheet: Net pension provision increased by EUR 3.bn Equity reduced by EUR 3.0bn (Difference mainly due to tax effects) Q 203 development: Re-measurement of pension provision and decrease of equity mainly due to slightly lower discount rates vs. year-end 202 Plan assets development reflects investment return, forex effects as well as pension payments No cash impact from accounting change to IAS9R Deutsche Post DHL Page 7
Highlights Mail Q 203 MAIL Division coped well with lower number of working days Mail communication volumes m units +.4% 2.024.780.790.984 2.053 Key facts Q was affected by 2.6 fewer working days Strong growth of German Parcel business continued at +0.9% volume / working day Mail Communication volumes supported by shifts from discontinuation of product Infobrief (Dialogue Marketing) Mail Communication revenue benefits from price increase as of Jan st Q 2 Q2 2 Q3 2 Q4 2 Q 3 Parcel volumes m units +6.4% 234 28 29 284 249 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Deutsche Post DHL Page 8
Mail Divisional Results Q 203 Only modest decline in profitability despite wage increase and adverse working day effect EUR m Q 202 Q 203 Chg. Revenue slightly up despite adverse working day effect, reflecting stamp price increase and ongoing parcel growth Revenue EBIT Operating Cash Flow Capex 3,557 392-206 35 3,62 382 05 45 +.5% -2.6% NA +28.6% yoy working days in Germany in 203 Q Q2 Q3 Q4-2.6 +.0 +.0 +0.0 Modest decline in EBIT due to strong business development in Parcel & Global Mail as well as price increase almost offsetting wage increase ) and working day effect Operating cash flow contains usual annual cash contribution to civil servant pension fund Operating Cash Flow improvement driven by working capital management, even beyond positive base effect from discontinuation of a factoring program in Q 202 (EUR 39m) ) 4% increase as of April st, 202 according to 202 wage agreement (Jan, 202 April 30, 203) Deutsche Post DHL Page 9
DPDHL leveraging four pillars of parcel growth in Germany Market trends DPDHL Paket Vertical ecommerce growth Sustainable ecommerce market growth expected for next 5 7 years due to increasing adoption and intensification of online buying Horizontal ecommerce growth Tipping point for ecommerce adoption of FMCG ), food and furniture achieved Dynamic and large B2B market German B2B market growing Significant increase of B2C exports Germany as ecommerce hub for international B2C due to geographic position and large domestic market ) Fast Moving Consumer Goods driven by consumer experience Offering of various delivery options (e.g. Packstation or dedicated neighbor) crucial for customer satisfaction and operations efficiency dependent on logistic infrastructure DHL Convenience-Logistics solutions (e.g. evening delivery) drive market development & scalability with huge growth potential for DHL Infrastructure investment into sorting and delivery capacities key to expand B2B market share until 205 enabled by dedicated solutions DHL Paket with end-to-end service including scalable fulfillment, access to local postal operators and international return solutions Deutsche Post DHL Page 0
Highlights Express Q 203 Strong TDI volume development continued Time Definite International (TDI) Revenues per day ) in EUR m +7.2% 3.9 35. 32.8 36.5 34.2 Key facts Strong TDI volume growth again driven by positive development in all regions: Europe +%; Americas +7%; APAC +0%; MEA +6% Upgrade of network capabilities continued, e.g. direct Japan-US connection, investments in US, Mexico, China and Germany hubs Q 2 Q2 2 Q3 2 Time Definite International (TDI) Shipments per day 000s +9.6% Q4 2 564 602 575 643 Q 3 68 Q 2 Q2 2 Q3 2 Q4 2 Q 3 ) Currency translation impacts are eliminated. Hence, 202 and 203 data are aggregated with the same currency rate Deutsche Post DHL Page
Express Divisional Results Q 203 Margin improvement starts to come through EUR m Q 202 Q 203 Chg. Revenue 3,020 3,037 +0.6% EBIT 232 254 +9.5% Operating Cash Flow -45 6 NA Capex 27 8-36.2% Revenue growth remains driven by volume increase in core TDI product. Revenue up 2.4% excl. adverse currency effects and AU and NZ domestic business disposal effects (not adjusted for working days) EBIT increase reflects gradually improving asset utilization as well as ongoing cost optimization and EUR 2m disposal gain (Domestic Express Romania). EBIT margin up from 7.7% to 8.4% (incl. disposal gain) Operating cash flow improvement shows benefit of strengthened working capital management as well as lower cash-out for restructuring Capex decline mainly due to phasing Deutsche Post DHL Page 2
DHL Express volumes around the world benefit from leadership in Asian TDI markets Strongest exposure to Asian growth Break-down of DHL Express global shipments by origin/destination: TDI leader (revenue) in all polled APAC markets ) Inbound Asia Others Intra- Asia Outbound Asia >50% of global DHL TDI shipments touch Asia DHL Express TDI market position Market share data available No market share data available ) Source: MI study 202, annual reports and desk research; APAC: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN Deutsche Post DHL Page 3
Highlights Global Forwarding, Freight Q 203 Volume developments reflect still weak macro environment Air freight 000s Tons -5.9% 992.046.039.070 933 Key facts Q 2 Q2 2 Q3 2 Q4 2 Q 3 Volume trends reflect weak demand from Tech and Engineering & Manufacturing as well as ongoing shift from AFR to OFR Industry freight rates remain volatile as subdued demand countered by active supply management Maintaining strong focus on contract selection and internal cost management NFE implementation advancing successfully Ocean freight 000s TEU ) +2.% 672 76 75 70 Q 2 Q2 2 Q3 2 Q4 2 686 Q 3 ) Twenty Foot Equivalent Unit Deutsche Post DHL Page 4
Global Forwarding, Freight Divisional Results Q 203 Countering market weakness with internal cost discipline EUR m Q 202 Q 203 Chg. Revenue 3,686 3,65 -.9% EBIT 87 88.% Operating Cash Flow 25 7-43.2% Revenue retreats slightly driven by continued weakness in AFR market EBIT stable despite small GP decline, reflecting further improvement in GP/EBIT conversion. EBIT includes operational expenses for NFE implementation Cash flow below strong level of last year due to temporary build-up of working capital Capex 32 9-40.6% Deutsche Post DHL Page 5
Highlights Supply Chain Q 203 Steady business growth, record Q new contract wins Revenue by sector Q 203 Others Milestones Revenue growth especially driven by Automotive, Retail and Airline Business Solutions APAC and MEA showed highest revenue growth rates (+0% each), compensating for weakness in some European markets A record first quarter with new contract wins of around EUR 430m in annualized revenue (Q 202: EUR 90m) Williams Lea Energy Automotive Technology 3% 0% % 9% Life Sciences & Healthcare 5% 8% Retail 25% 9% Consumer Deutsche Post DHL Page 6
Supply Chain Divisional Results Q 203 Business delivering in line with expectations, including strong cash flow EUR m Q 202 Q 203 Chg. Revenue 3,409 3,483 +2.2% EBIT 92 84-8.7% Operating Cash Flow 39 76 +94.9% Capex 65 47-27.7% Contracts won Annualized revenue New gains 90 430 Revenue growth held back by currency effects and subdued economic development in Europe. Increased volume and contract start-ups nevertheless still drive organic revenue growth of 3.6% EBIT contains EUR 2m impact from USbased customer going into Chapter. Excluding this charge, EBIT was slightly up as good business development in Asia and the Americas made up for weak activity in parts of Europe Operating cash flow trend continues to be positive Capex reflects investments in new contracts Deutsche Post DHL Page 7
Full-year 203 Guidance confirmed EBIT Group EUR 2.70 2.95bn Mail EUR.0.20bn DHL divisions EUR 2.00 2.5bn Corp. Center/ Other ~ EUR -400m Free Cash Flow Free Cash Flow To at least cover 202 dividend Gross Capex of EUR ~.8bn Net income growth in line with operating profit development Deutsche Post DHL Page 8
Wrap Up Solid start to the year despite headwinds from working day pattern and continued low growth in mature economies Strategic focus on and investments into key growth markets TDI and Parcel continue to pay off Unchanged, intensive focus on margin improvement and cash flow performance Fully on track to deliver on mid-term target for Group EBIT of EUR 3.35 3.55bn in 205 Deutsche Post DHL Page 9
Deutsche Post DHL Group results Q 203 Solid start into the year Larry Rosen, CFO Bonn, 4 May 203
Working days Germany 202 203 204 205 Q 64.2 6.6 62.2 62.2 Q2 59.3 60.3 59.3 59.3 H 23.5 2.9 2.5 2.5 Q3 64.8 65.8 65.8 66 9M 88.3 87.7 87.3 87.5 Q4 60.2 60.2 60.9 63 H2 25 26 26.7 29 FY 248.5 247.9 248.2 250.5 Deutsche Post DHL Page 2