Deutsche Post DHL Annual Report 2014

2014 Annual Report

Expected Developments

Excerpts from Deutsche Post AG's 2014 Group Annual Report.

Overall Board of Management assessment of the future economic position

Consolidated EBIT of €3.05 billion to €3.20 billion expected

We expect the global economy to continue to experience regional variations in 2015 and to demonstrate only moderate growth on the whole. A similar development is anticipated for world trade. Our strong position as market leader in the German mail and parcel business and in nearly all of our international logistics activities is the best possible basis for further growth. Our strategic focus on business driven by e-commerce and emerging economies that exhibit strong structural growth are the main factors we see as supporting the long-term performance of our business. The Board of Management expects consolidated EBIT to reach €3.05 billion to €3.20 billion in financial year 2015. The Post - eCommerce - Parcel division is likely to contribute at least €1.3 billion to this figure. Compared with the previous year, we expect an additional improvement in overall earnings to €2.1 billion to €2.25 billion in the DHL divisions. Within the DHL divisions we expect a further increase in earnings for Express, whilst the transformation in the Global Forwarding, Freight division and investments in the Supply Chain division will dampen those divisions’ earnings. The Corporate Center/Other result is projected to remain at around €–0.35 billion. Due in particular to the forecast increase in EBIT, we also expect EAC to grow in financial year 2015. Free cash flow is expected to at least cover the dividend payment for financial year 2014 projected to be paid in May 2015.

Revenue and earnings forecast

Consolidated EBIT of €3.05 billion to €3.20 billion expected

The world economy again registered below-average growth in the reporting year. We expect the global economy to continue to experience regional variations in 2015 and to grow only moderately on the whole. The global trading volumes relevant to our business are likely to perform similarly. Revenue performance is expected to reflect our strategic focus on business driven by e-commerce and emerging economies evidencing strong structural growth.

Against this backdrop, we expect consolidated EBIT to reach €3.05 billion to €3.20 billion in financial year 2015. The Post - eCommerce - Parcel division is likely to contribute at least €1.3 billion to this figure. Compared with the previous year, we expect an additional improvement in overall earnings to €2.1 billion to €2.25 billion in the DHL divisions. Within the DHL divisions, Express is expected to show continued earnings growth, whereas transformation in Global Forwarding, Freight and investments in Supply Chain will dampen EBIT growth in the latter divisions. The Corporate Center/Other result is projected to remain at around €–0.35 billion.

In line with our Group strategy, we are targeting organic growth and anticipate only a few small acquisitions in 2015, as in the previous year.

We are reiterating the earnings forecast for 2016 that we presented in August 2014: consolidated EBIT is expected to reach between €3.4 billion and €3.7 billion in 2016. The PeP division is likely to account for more than €1.3 billion of this and the earnings contribution of the DHL divisions is forecast to range from €2.45 billion to €2.75 billion.

Our finance strategy calls for a payout of 40% to 60% of net profits as dividends as a general rule. At the Annual General Meeting on 27 May 2015, we intend to propose to the shareholders that a dividend per share of €0.85 be paid for financial year 2014 (previous year: €0.80).

Development of further indicators relevant for internal management

EAC increases slightly

As a result of the projected growth in EBIT, we expect that EAC will also grow in 2015. The divisions will be under the same impact with regard to EAC as laid out in the EBIT outlook. However, as our investing activities continue and the net base will increase as a result, the rise in EBIT after asset charge may fall slightly short of EBIT growth. Free cash flow is expected to at least cover the dividend payment for financial year 2014 projected to be made in May 2015.

Employee Opinion Survey results again positive

We intend to keep up the positive results that our Employee Opinion Survey achieved in the reporting year. For 2015, we expect to see an increase to 72% in the approval rating for the key performance indicator Active Leadership.

Transparent presentation of greenhouse gas efficiency

We intend to increase transparency in our greenhouse gas efficiency because it is the target of our GoGreen environmental protection programme. It will be measured using a CO2 Efficiency Index (CEX), which is based upon division and business unit-specific emission intensity figures that show the ratio of the respective emissions to a matching performance indicator. Our goal therefore remains to consider CEX as a non-financial indicator relevant for internal management in the Group.

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© 2015 Deutsche Post AG
Deutsche Post DHL

2014 Annual Report

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