Deutsche Post DHL Annual Report 2014

2014 Annual Report

Report on Economic Position

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

Overall Board of Management assessment of the economic position

Group achieves annual targets

Deutsche Post DHL Group reached the targets it had set for financial year 2014: the Group’s revenue, EBIT and operating cash flow all increased. The German parcel business in the Post - eCommerce - Parcel (PeP) division and the international business in the Express division continued to generate dynamic growth. Earnings in the Supply Chain division likewise benefited from a high level of new business and continuing restructuring programmes, whereas margin pressure and transformation costs had a noticeable impact on the Global Forwarding, Freight division. Capital expenditure increased to around €1.9 billion as planned. Operating cash flow registered a positive trend. The Group’s financial position remains solid on the whole in the opinion of the Board of Management.

Forecast/actual comparison

Forecast/actual comparison

Significant events

No significant events

There were no events with material effects on the Group’s net assets, financial position and results of operations in financial year 2014.

Results of operations

Selected indicators for results of operations
        2013
adjusted1
  2014
Revenue   m   54,912   56,630
Profit from operating activities (EBIT)   m   2,865   2,965
Return on sales2   %   5.2   5.2
EBIT after asset charge (EAC)   m   1,501   1,551
Consolidated net profit for the period3   m   2,091   2,071
Earnings per share4     1.73   1.71
Dividend per share     0.80   0.855
  1. 1 Note 4.
  2. 2 EBIT/revenue.
  3. 3 After deduction of non-controlling interests.
  4. 4 Basic earnings per share.
  5. 5 Proposal.

Changes in reporting and portfolio

The amendments to IFRS 10 (Consolidated Financial Statements) and IFRS 11 (Joint Arrangements) have been required to be applied since 1 January 2014. This had a minor overall impact on a number of items in the balance sheet and income statement. Detailed information can be found in the Notes.

Since all joint ventures, associates and other equity investments held by Deutsche Post DHL Group operate in the Group’s core business, we now report the income and expenses of these investments under profit from operating activities (EBIT). They had previously been included in net financial income/net finance costs.

Our domestic parcel business in Belgium, the Czech Republic, India, the Netherlands and Poland was consolidated in the Post - eCommerce - Parcel division at the beginning of the year. This business was previously part of the Express and Global Forwarding, Freight divisions.

In addition, the US company Sky Courier Inc. was reassigned from the Express division to the Global Forwarding, Freight division in the first quarter.

The Belgian company Speedpack NV was transferred from the Global Forwarding, Freight division to the PeP division effective 1 April 2014.

The prior-period amounts have been adjusted. We have not drawn attention to this again in the following explanations to the Group management report.

DHL Global Forwarding & Co. LLC, Oman, was consolidated in May 2014 due to contractual changes. The company had previously been accounted for using the equity method.

In the Global Forwarding, Freight division, we sold the activities of Hull Blyth Angola Ltd. not belonging to the core business and Hull Blyth Angola Viagens e Turismo Lda. effective 31 July. All of the company’s assets and liabilities had previously been reclassified as held for sale.

Effective 18 December, we acquired StreetScooter GmbH, Aachen. The company assists us in further improving the CO2 efficiency of our vehicle fleet by developing cost-effective electric vehicles for us.

Consolidated revenue up 3.1%

Consolidated revenue rose by 3.1% to €56,630 million in financial year 2014, although negative currency effects reduced revenue by €407 million. The proportion of revenue generated abroad remained stable year-on-year at 69.3% (previous year: 69.1%). Changes in the portfolio reduced revenue by €152 million. At €15,365 million, revenue was up by €915 million in the fourth quarter of 2014; positive currency effects increased this item by €322 million.

Other operating income rose from €1,962 million in the previous year to €2,016 million. It increased by €101 million in the reporting year due to a change in the assessment of settlement payment obligations assumed in the context of restructuring the US express business, and other factors.

Consolidated revenue

Higher transportation costs

Materials expense rose by €1,004 million to €32,042 million, especially due to higher transportation costs and the increase in goods purchased and held for resale for the business with the UK National Health Service in the Supply Chain division.

Staff costs rose by 2.3% to €18,189 million. This was mainly attributable to the increase in the number of employees in the Supply Chain division and higher labour costs in the PeP division.

Depreciation, amortisation and impairment losses increased from €1,337 million to €1,381 million, due mainly to impairment losses on aircraft and aircraft parts amounting to €106 million.

At €4,074 million, other operating expenses were €211 million higher than in the previous year (€3,863 million). The increase was attributable to a large number of smaller factors.

Development of revenue, other operating income and operating expenses
    €m   +/– %    
Revenue   56,630   3.1  
  • Growth trends in the German parcel and international express businesses remain intact.
  • Currency effects reduce consolidated revenue by €407 million.
Other operating income   2,016   2.8  
  • Restructuring provisions for the US express business reversed.
Materials expense   32,042   3.2  
  • Higher transportation costs.
  • Higher cost of goods purchased and held for resale in the Supply Chain division.
Staff costs   18,189   2.3  
  • Increased number of staff, mostly in the Supply Chain division.
  • Higher labour costs in the PeP division.
Depreciation, amortisation and impairment losses   1,381   3.3  
  • Includes impairment losses on aircraft of €106 million.
Other operating expenses   4,074   5.5  
  • Large number of smaller factors.

Consolidated EBIT improves by 3.5%

Profit from operating activities (EBIT) improved year-on-year, rising by 3.5% to €2,965 million in the reporting year. In the fourth quarter of 2014, it rose by 1.9% to €905 million.

By contrast, net finance costs widened from €293 million to €388 million due in particular to lower interest income. The prior-year figure included interest income from the reversal of a provision for interest on tax liabilities.

At €2,577 million, the reporting year’s profit before income taxes was up slightly on the previous year (€2,572 million). Income taxes also increased, rising by €39 million to €400 million. The effective tax rate was 15.5%.

Consolidated EBIT

Net profit and earnings per share down

Consolidated net profit for the period declined from €2,211 million to €2,177 million. Of this amount, €2,071 million is attributable to shareholders of Deutsche Post AG and €106 million to non-controlling interest holders. Earnings per share also decreased, with basic earnings per share down from €1.73 to €1.71 and diluted earnings per share declining from €1.66 to €1.64.

Dividend of €0.85 per share proposed

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, the Board of Management and the Supervisory Board will therefore propose a dividend of €0.85 per share for financial year 2014 (previous year: €0.80) to shareholders. The distribution ratio based on the consolidated net profit for the period attributable to Deutsche Post AG shareholders amounts to 49.7%. The net dividend yield based on the year-end closing price of our shares is 3.1%. The dividend will be distributed on 28 May 2015 and is tax-free for shareholders resident in Germany. It does not entitle recipients to a tax refund or a tax credit.

Total dividend and dividend per no-par value share

EBIT after asset charge increases

EAC improved from €1,501 million to €1,551 million in 2014, due primarily to the improved profitability of the Express division. The asset charge rose by 3.7%, which was attributable predominantly to increased capital expenditure in the DHL divisions as well as to the changes in net working capital of the Post - eCommerce - Parcel and Global Forwarding, Freight divisions.

EBIT after asset charge (EAC)
€m
    2013
adjusted1
  2014   +/– %
EBIT   2,865   2,965   3.5
Asset charge   –1,364   –1,414   –3.7
EAC   1,501   1,551   3.3
  1. 1 Prior-period amounts adjusted due to a revised calculation basis.

 

The net asset base increased by €1,185 million to €16,515 million in the reporting year. Investments in IT systems, the purchase of freight aircraft and replacement and expansion investments in warehouses, sorting systems and the vehicle fleet increased year-on-year, as did intangible assets. Changes in net working capital additionally contributed to the rising trend.

The decline in operating provisions is due to the reversal of restructuring provisions in the Express division, amongst other factors. The increase in other non-current assets and liabilities contributed to the rise in the net asset base.

Net asset base (non-consolidated)
€m
    31 Dec. 2013
adjusted1
  31 Dec. 2014   +/– %
Intangible assets and property, plant and equipment   18,681   19,540   4.6
Net working capital   –681   –512   –24.8
Operating provisions (excluding provisions for pensions
       and similar obligations)
 
–2,654
 
–2,505
 
–5.6
Other non-current assets and liabilities   –16   –8   –50.0
Net asset base   15,330   16,515   7.7
  1. 1 Prior-period amounts adjusted due to a revised calculation basis.

Business performance in the divisions

Overview

Key figures by operating division
€m
    2013
adjusted
  2014   +/– %   Q4 2013
adjusted
  Q4 2014   +/– %
                         
Post - eCommerce - Parcel                        
Revenue   15,291   15,686   2.6   4,183   4,353   4.1
of which Post   9,975   10,026   0.5   2,665   2,693   1.1
eCommerce - Parcel   5,316   5,660   6.5   1,518   1,660   9.4
Profit from operating activities (EBIT)   1,286   1,298   0.9   374   425   13.6
Return on sales (%)1   8.4   8.3     8.9   9.8  
Operating cash flow   1,038   1,085   4.5   366   478   30.6
                         
Express                        
Revenue   11,821   12,491   5.7   3,100   3,411   10.0
of which Europe   5,432   5,670   4.4   1,444   1,528   5.8
Americas   2,207   2,259   2.4   579   627   8.3
Asia Pacific   4,069   4,456   9.5   1,063   1,237   16.4
MEA (Middle East and Africa)   924   924   0.0   229   246   7.4
Consolidation/Other   –811   –818   –0.9   –215   –227   –5.6
Profit from operating activities (EBIT)   1,083   1,260   16.3   312   348   11.5
Return on sales (%)1   9.2   10.1     10.1   10.2  
Operating cash flow   1,379   1,689   22.5   556   578   4.0
                         
Global Forwarding, Freight                        
Revenue   14,787   14,924   0.9   3,774   3,960   4.9
of which Global Forwarding   10,813   10,892   0.7   2,754   2,918   6.0
Freight   4,117   4,180   1.5   1,059   1,082   2.2
Consolidation/Other   –143   –148   –3.5   –39   –40   –2.6
Profit from operating activities (EBIT)   478   293   –38.7   138   71   –48.6
Return on sales (%)1   3.2   2.0     3.7   1.8  
Operating cash flow   641   181   –71.8   372   205   –44.9
                         
Supply Chain                        
Revenue   14,227   14,737   3.6   3,699   3,953   6.9
of which Supply Chain   12,889   13,329   3.4   3,329   3,564   7.1
Williams Lea   1,345   1,407   4.6   371   383   3.2
Consolidation/Other   –7   1     –1   6  
Profit from operating activities (EBIT)   441   465   5.4   178   161   –9.6
Return on sales (%)1   3.1   3.2     4.8   4.1  
Operating cash flow   635   673   6.0   376   436   16.0
  1. 1 EBIT/revenue.

POST - ECOMMERCE - PARCEL Division

Revenue increases by 2.6%

In the reporting year, with 0.3 additional working days in Germany, revenue in the division was €15,686 million, 2.6% above the prior-year figure of €15,291 million. Operations in both business units performed well, with our international and domestic parcel business, predominantly in Germany, accounting for most of the gain. Negative currency effects of €6 million were recorded.

Mail business increases revenue as volume declines

In the Post business unit, revenue was €10,026 million, slightly above the prior-year figure of €9,975 million. This is attributable primarily to the price increases for both a standard letter and our Infopost product since overall volumes continued to decline. Revenue in the fourth quarter of 2014 was €2,693 million (previous year: €2,665 million).

The domestic mail business performed well mainly as a result of the price increases. Volumes were slightly below the prior-year level. This decline can be attributed to the additional mail correspondence seen in advance of the SEPA migration in 2013 in addition to the general market trend and other factors. Revenue in the international import/export business in the reporting year declined noticeably compared to the prior-year level due to changes in the mix.

In the Dialogue Marketing business, we were able to increase revenue despite declining volumes compared with the previous year. The prices for the Standard, Kompakt and Maxi formats of our Infopost product were raised by three cents on 1 July 2014. In addition, we accelerated our advertising activities with regard to retail and mail-order businesses. Both revenue and sales in unaddressed advertising mail decreased slightly. We generated growth through new customers and by expanding the delivery area for our unaddressed product Einkauf aktuell; however, this growth did not offset the declines in Postwurfsendung items.

Post: volumes
Mail items (millions)
    2013
adjusted
  2014   +/– %   Q4 2013
adjusted
  Q4 2014   +/– %
Total   20,804   20,498   –1.5   5,724   5,433   –5.1
of which Mail Communication   8,958   8,891   –0.7   2,390   2,309   –3.4
of which Dialogue Marketing   9,716   9,523   –2.0   2,765   2,561   –7.4

eCommerce - Parcel business unit continues to grow

Worldwide online retailing continues to have a positive impact on our parcel business. By expanding our portfolio and improving our services, we are laying the logistical foundation around the world to ensure that the strong growth in this market is sustained. In the reporting year, revenue in the eCommerce - Parcel business unit was €5,660 million, exceeding the prior-year figure of €5,316 million by 6.5%.

The volume in the German parcel business rose sharply again in 2014, surpassing the prior-year figure by 7.0%. We extended our product portfolio again and significantly expanded our services. Revenue exceeded the prior-year figure by an even wider margin due to changes in the mix. In the fourth quarter of 2014, the positive trend accelerated further.

Our other domestic parcel business in Europe performed just as well. Since we consolidated this business into the Post - eCommerce - Parcel division, revenue and sales have increased considerably compared with the prior year.

Our worldwide e-commerce activities also continue to perform well. Revenue increased in the reporting year due to solid growth in the Americas and India. In contrast, volumes remained below the prior-year figure because we began to reassess our customer portfolio, particularly in the USA.

Parcel Germany: volumes
Parcels (millions)
    2013
adjusted
  2014   +/– %   Q4 2013
adjusted
  Q4 2014   +/– %
Parcel Germany   965   1,033   7.0   285   309   8.4

Increased costs slow earnings growth

Although revenue rose significantly compared with the previous year, EBIT improved only slightly to €1,298 million (previous year: €1,286 million). Increased material and labour costs, in particular, as well as the continued expansion of our parcel network, noticeably slowed the improvement in earnings. The return on sales was 8.3% (previous year: 8.4%). In the fourth quarter of 2014, EBIT was €425 million (previous year: €374 million), which improved return on sales from 8.9% to 9.8% quarter-on-quarter.

Operating cash flow in the reporting year was €1,085 million, exceeding the prior-year figure of €1,038 million by 4.5%, which is mainly a result of lower net cash outflow from working capital. At €–278 million, working capital was significantly less favorable than the prior-year level (€–457 million).

EXPRESS Division

Revenue in time-definite business grows at a high level

Revenue in the division increased by 5.7% to €12,491 million in the reporting year (previous year: €11,821 million). Our business continued to grow: excluding negative currency effects of €193 million and the effect from the sale of the domestic express business in Romania in the first quarter of 2013, revenue in the reporting year increased by 7.3%. In the fourth quarter of 2014, revenue climbed year-on-year by 10.0%.

In the Time Definite International (TDI) product line, both per-day shipment volumes and daily revenues rose by 7.8% compared with the prior year. An increase of 7.8% in the final quarter affirmed the growth in per-day volumes.

In the Time Definite Domestic (TDD) business, our customers sent 1.7% more shipments each day year-on-year in 2014. Daily revenues in the reporting year remained at the prior-year level. In the fourth quarter of 2014, daily shipment volumes went up by 3.9%.

Effective 1 January 2014, we transferred the Indian subsidiary Blue Dart as well as the domestic express business in the Netherlands, Belgium and Poland to the PeP division. Since then our focus in the Express division in these countries has been on our core competence, international business. The subsidiary Sky Courier Inc. in the United States was transferred to the Global Forwarding, Freight division.

EXPRESS: revenue by product
€m per day1
    2013
adjusted
  2014   +/– %   Q4 2013
adjusted
  Q4 2014   +/– %
Time Definite International (TDI)   34.7   37.4   7.8   37.5   40.0   6.7
Time Definite Domestic (TDD)   3.9   3.9   0.0   4.1   4.3   4.9
  1. 1 To improve comparability, product revenues were translated at uniform exchange rates. These revenues are also the basis for the weighted calculation of working days.

 

EXPRESS: volumes by product
Thousands of items per day1
    2013
adjusted
  2014   +/– %   Q4 2013
adjusted
  Q4 2014   +/– %
Time Definite International (TDI)   643   693   7.8   694   748   7.8
Time Definite Domestic (TDD)   361   367   1.7   380   395   3.9
  1. 1 To improve comparability, product revenues were translated at uniform exchange rates. These revenues are also the basis for the weighted calculation of working days.

TDI volumes in Europe region see final-quarter double-digit increases

Revenue in the Europe region was €5,670 million, 4.4% above the prior year’s figure of €5,432 million. The figure for the reporting year included negative currency effects of €37 million, which related mainly to our business activities in Russia and Turkey. Excluding these effects and the effect from the sale of the domestic express business in Romania in the first quarter of 2013, revenue growth in 2014 was 5.2%. Daily revenues in the TDI product line grew by 4.6%, due primarily to the 6.0% increase in daily shipment volumes. In the fourth quarter of 2014, daily revenues in international shipments increased by 4.5% compared with the prior-year quarter; shipment volumes were even up by 10.2%.

Business growth stable in the Americas region

Revenue in the Americas region increased by 2.4% in the reporting year to €2,259 million (previous year: €2,207 million). The figure for the reporting year included major negative currency effects of €99 million, which related mainly to our business activities in South America – above all Venezuela and Argentina. Excluding these effects, revenue in the region rose by 6.8% in the reporting year. In the TDI product line, daily revenues and per-day volumes increased by 6.8% and 7.0%, respectively. In the fourth quarter of 2014, daily shipment volumes slightly exceeded the prior-year level by 0.5%.

Performance in Asia Pacific region remains dynamic

In the Asia Pacific region, we increased revenue by 9.5% to €4,456 million (previous year: €4,069 million). The figure for the reporting year included negative currency effects of €41 million. Excluding these effects, the revenue increase was a strong 10.5%. Daily revenues in the TDI product line were up by 11.3% in 2014, due primarily to the 9.6% rise in daily shipment volumes. The encouraging growth was also maintained in the fourth quarter: revenues in daily international shipments increased by 11.1% whilst shipment volumes grew by 8.0%.

Time-definite shipments rise in the MEA region

In the MEA region (Middle East and Africa), revenue in the reporting year was €924 million and thus at the prior-year level. Excluding negative currency effects of €11 million, revenue grew by 1.2% in the reporting year. In the TDI product line, daily revenues increased by 8.7% and per-day volumes by 10.5%. In the fourth quarter of 2014 daily revenues in international shipments increased by 8.8%, and shipment volumes by 10.0%, compared with the previous quarter.

EBIT exceeds high prior-year figure again

In the reporting year, EBIT in the division increased year-on-year by 16.3% to €1,260 million (previous year: €1,083 million). Increased revenues, the higher operating profitability of our network and strict cost management in particular contributed to this improvement. The EBIT figure for the previous year included a €12 million deconsolidation gain on the divestment of the domestic express business in Romania. The reversal of restructuring provisions in the United States resulted in income that was offset mainly by impairment losses on aircraft. Return on sales in the reporting year rose from 9.2% to 10.1%. In the final quarter, EBIT climbed by 11.5% to €348 million, which improved return on sales from 10.1% to 10.2%.

As a result of the improved operating profit, operating cash flow increased in the reporting year by 22.5% to €1,689 million (previous year: €1,379 million).

GLOBAL FORWARDING, FREIGHT Division

Freight forwarding volumes recovered slightly during the year

Revenue in the division increased by 0.9% to €14,924 million in the reporting year (previous year: €14,787 million). Excluding negative currency effects of €339 million, revenue was 3.2% above the previous year. After declining in the first half of the year, the freight forwarding business recovered slightly over the course of the year. In the fourth quarter, revenue was up year-on-year by 4.9% to €3,960 million (previous year: €3,774 million). The fourth-quarter figure included positive currency effects of €15 million. Excluding currency effects, revenue saw a 4.5% year-on-year increase. Our revenue continued to be impacted by reduced prices.

In the Global Forwarding business unit, revenue in the reporting year increased slightly by 0.7% to €10,892 million (previous year: €10,813 million). Excluding negative currency effects of €281 million, the increase was 3.3%. Gross profit declined by 4.9% to €2,403 million (previous year: €2,526 million).

Implementation of our NFE strategic project is on-going.

Volume rise in air and ocean freight confirmed

Revenues and volumes in air and ocean freight increased year-on-year in the reporting year.

Our air freight volumes grew in financial year 2014 by 2.4% compared with the previous year. Margin pressure continued to rise over the course of the year. In light of the falling oil price, major customers engaged in aggressive competitive bidding in the second half of the year. Furthermore, airlines reduced their capacities, in particular along the very busy routes from Asia. Our revenue in the reporting period grew by 2.2%; however, gross profit declined by 8.9%. In the fourth quarter, volumes were 2.7% and revenue 6.6% above the prior-year quarter.

Ocean freight volumes for 2014 as a whole were up by 4.6% year-on-year, driven mainly by newly acquired customers and increased volumes from existing customers. Asia remains the largest growth engine. Despite the fact that new, larger vessels are being put into operation, ocean carriers continued to reduce effective capacity and therefore maintain the balance between supply and demand. At the same time, rates were increased, which added pressure to the margins. Our ocean freight revenue increased by 1.3% in the reporting year. Although we implemented strict operational cost control measures, gross profit declined by 4.1%. In the fourth quarter, volumes were 3.4% and revenue 9.3% above the prior-year quarter.

Our industrial project business (see table Global Forwarding: revenue, reported as part of Other in the Global Forwarding business unit) saw weaker performance compared with the prior year. In the reporting year, the share of revenue related to industrial project business and reported under Other was 34.7% and therefore down year-on-year (previous year: 37.1%). Gross profit therefore declined by 10.8% compared with the prior-year period.

Global Forwarding: revenue
€m
    2013
adjusted
  2014   +/– %   Q4 2013
adjusted
  Q4 2014   +/– %
Air freight   5,006   5,114   2.2   1,324   1,411   6.6
Ocean freight   3,532   3,578   1.3   848   927   9.3
Other   2,275   2,200   –3.3   582   580   –0.3
Total   10,813   10,892   0.7   2,754   2,918   6.0
Global Forwarding: volumes
Thousands
        2013
adjusted
  2014   +/– %   Q4 2013
adjusted
  Q4 2014   +/– %
Air freight   tonnes   3,953   4,048   2.4   1,047   1,075   2.7
of which exports   tonnes   2,215   2,272   2.6   591   600   1.5
Ocean freight   TEUs1   2,807   2,935   4.6   707   731   3.4
  1. 1 Twenty-foot equivalent units.

Revenue in European overland transport business grows steadily

In the Freight business unit, revenue was up by 1.5% to €4,180 million in financial year 2014 (previous year: €4,117 million) despite negative currency effects of €59 million. Business grew primarily in Central and Eastern Europe, Germany, Turkey, Sweden and France. Gross profit declined by 1.6% to €1,079 million in the reporting year (previous year: €1,097 million), due primarily to negative currency effects.

EBIT includes high NFE expenses

EBIT in the division was €293 million in the reporting year and therefore significantly below the prior-year level of €478 million. The impact of high NFE expenses continues to be felt. At the same time, gross profit margins remained at a historically low level due to higher pressure on margins, despite strict cost management. The return on sales declined to 2.0% (previous year: 3.2%). In the fourth quarter of 2014, EBIT fell year-on-year, from €138 million to €71 million.

Moreover, net working capital in the reporting year worsened due to increased outstanding receivables, leading to an operating cash flow of €181 million (previous year: €641 million).

SUPPLY CHAIN Division

Positive revenue performance

Revenue in the division increased in the reporting year by 3.6% to €14,737 million (previous year: €14,227 million). Positive currency effects of €132 million almost offset the loss of revenue from prior-year disposals of €147 million. Excluding these effects, revenue growth was 3.7%. In the fourth quarter of 2014, revenue increased year-on-year by 6.9% from €3,699 million to €3,953 million. Excluding the positive currency effects, revenue grew by 1.9%.

Revenue in the Supply Chain business unit was €13,329 million in 2014, an increase of 3.4% (previous year: €12,889 million). Excluding business disposals and positive currency effects, growth was 3.8%. On this basis, growth in the emerging markets was better than that of the business unit as a whole. Compared with the previous year, the Automotive and Life Sciences & Healthcare sectors represented a higher proportion of revenue, offset by a slightly lower share in the Retail sector. Revenue from the top 20 customers increased by 1.5%.

SUPPLY CHAIN: revenue by sector, 2014

In the Americas region, revenue no longer includes Exel Direct in the United States, which we disposed of in the second quarter of 2013. Our revenue in Canada was impacted negatively by the loss of a contract in the Retail sector at the end of the second quarter of 2014. We generated the highest revenue growth in the USA and Brazil, predominantly from new business in the Consumer and Energy sectors.

In the Asia Pacific region, we achieved substantial revenue growth from additional volumes and new business, particularly in Japan, Australia and China. In Japan, we benefited from new business in the Technology sector that was gained in the second half of 2013. Revenue growth in Australia came primarily from the Life Sciences & Healthcare sector. In China, revenue increased significantly due to new business and higher volumes in the Automotive and Consumer sectors. However, the overall rise in revenue in the region was offset partly by negative currency effects, due primarily to the Japanese yen.

In Europe, volumes in the Automotive and Retail sectors increased as a result of higher end-customer demand. Revenue in the Life Sciences & Healthcare sector improved due to additional business with the UK National Health Service. Prior-year disposals and the strong pound sterling also affected revenue growth.

In the Williams Lea business unit, revenue grew by 4.6% to €1,407 million in the reporting period, driven mainly by higher volumes in the public sector in the UK and the new Marketing Solutions sourcing business in Asia.

SUPPLY CHAIN: revenue by region, 2014

New business worth around €1,220 million secured

In the reporting year, the Supply Chain business unit concluded additional contracts worth around €1,220 million in annualised revenue with both new and existing customers in the reporting year. The Consumer, Retail, Automotive, Life Sciences & Healthcare and Technology sectors accounted for the majority of the gains. The annualised contract renewal rate remained at a consistently high level.

EBIT further improved in the reporting year

EBIT in the division was €465 million in the reporting year (previous year: €441 million). The previous year included a gain of €50 million from the adjustment of pension plans as well as charges of €30 million for restructuring, charges associated with the Chapter 11 insolvency filing of a major customer and expenses arising from business disposals. The improved EBIT can be attributed both to the high level of new business and to continuing restructuring programmes. The return on sales was 3.2% (previous year: 3.1%). In the fourth quarter of 2014, EBIT decreased from €178 million to €161 million, reflecting primarily the prior-year net gain from the pension plan adjustment and restructuring costs.

Operating cash flow for the reporting year increased to €673 million, from €635 million in the previous year.

Geprüft
© 2015 Deutsche Post AG
Deutsche Post DHL

2014 Annual Report

WHEN YOU
THINK OF
LOGISTICS

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TO THINK
OF US.