A successful start to the year for Deutsche Post DHL Group despite global challenges

BONN, Germany–(BUSINESS WIRE)–Deutsche Post DHL Group, the global logistics leader, continued its successful growth trajectory in the first quarter of 2022 despite global challenges. Turnover increased by 19.8% to 22.6 billion euros. After the significant jump in profits during the 2021 financial year, the Group also recorded an excellent first quarter of 2022 with an operating result (EBIT) of 2.2 billion euros (Q1 2021: 1.9 billion euros ). The Group succeeded in balancing the rise in energy prices and transport costs. At 9.6%, the EBIT margin is at a level comparable to that of the previous year (Q1 2021: 10.1%).

Global B2B activity was the main driver of growth in the first quarter of 2022. Global Forwarding, Freight and Supply Chain in particular, but also Express, benefited from a solid development in global trade and stronger B2B activity. Global Forwarding, Freight’s earnings nearly tripled on exceptionally positive performance in the air and ocean freight businesses. In domestic and international parcel business, as expected, B2C shipping volumes normalized in early 2022 after an exceptionally high level the previous year, due to Covid-related restrictions on public life in many areas geographical. As a result, the profits of eCommerce Solutions and Post & Parcel Germany were below the very good level of 2021.

Deutsche Post DHL Group’s large and resilient logistics portfolio pays off again

“The first quarter saw the expected normalization of e-commerce. However, we were able to overcompensate for this development with strong results in our global logistics business. Once again, our portfolio – balanced by region and sector – has proven to be a solid and resilient foundation for our success. Overall, we had a good start to the year and further increased our profits,” said Frank Appel, CEO of Deutsche Post DHL Group. Regarding the consequences of the war in Ukraine, Frank Appel added: “After the outbreak of the war, global trade has so far shown resilience, but we are closely monitoring the growing challenges of global economic development. “.

Outlook: short and medium term objectives confirmed

The group continues to expect an EBIT of 8.0 billion euros (+ / – 5%) for the current financial year. For 2024, the company continues to expect an increase in EBIT to around €8.5 billion. The short and medium term outlook for free cash flow and gross investments (capex) was also confirmed. Excluding acquisitions, the Group expects free cash flow of €3.6 billion (+/- 5%) for the current year, with a cumulative free cash flow forecast of around €11 billion. euros for the period 2022 to 2024. The investment outlook in 2022 remains at around 4.2 billion euros and for the period 2022-2024 at around 12 billion euros.

A strong financial position enables significant investments in profitable growth

The excellent financial situation of the Group continues to be reflected also in its cash flow: in the first quarter of 2022, the operating cash flow of the Group was almost at the level of the previous year at 2.4 billion euros (Q1 2021 : 2.5 billion euros). Free cash flow was around €1.1 billion (Q1 2021: €1.2 billion) excluding acquisitions, such as the finalized transaction of maritime freight specialist JF Hillebrand Group for an amount of 1.4 billion euros. The record result of the previous year was thus almost achieved once again. The company invested €564 million across all its divisions in the first quarter of 2022 (Q1 2021: €583 million).

“Our strong and stable financial strength allows us to invest heavily in our leadership position and strengthen our resilience. This allowed us to acquire Hillebrand in the first quarter of 2022 without having to raise external capital, while continuing to invest in the development of our core businesses. With capital expenditure of around €12 billion until 2024, we want to drive forward sustainable investments to expand our transport, warehousing and sorting capacities and support our customers with new low-emission solutions. to meet their carbon reduction targets,” said CFO Melanie Kreis. .

Overall, Deutsche Post DHL Group generated a net profit after non-controlling interests of €1.4 billion in the first quarter of 2022 (Q1 2021: €1.2 billion). Basic earnings per share increased accordingly to EUR 1.10, after EUR 0.96 in the prior year quarter.

Express: networks continue to be used very efficiently; EBIT slightly up year-on-year

Thanks to the continued strong use of its crisis-proof global networks, the Express division again achieved an excellent EBIT of EUR 971 million (Q1 2021: EUR 961 million). This contains asset impairments of EUR -24 million in Russia. Turnover increased by 15.9% to 6.4 billion euros. This is largely due to heavier shipments and higher fuel surcharges. As expected, international express time-definite (TDI) shipment volumes were down slightly from the prior year. The EBIT margin remained solid at 15.2% (Q1 2021: 17.5%).

Global Forwarding, Freight: dynamic growth in turnover and results

Global Forwarding, Freight achieved a exceptional quarterly result with an EBIT of 601 million euros (Q1 2021: 216 million euros). The division posted the highest quarterly revenue of all Group divisions for the first time, with revenue up 54.9% to 7.4 billion euros. This was mainly due to the intensification dynamics of prices and margins in international transport markets and slightly higher volumes in air and ocean freight. As a market leader, the division has been very successful in managing this volatile environment. The EBIT margin recorded an exceptionally strong improvement to 8.2% (Q1 2021: 4.5%).

Supply Chain: double-digit growth rates

The Supply Chain division successfully continued its growth trajectory and benefited from continued strong sales momentum. This dynamic results mainly from the increase in warehousing and distribution activities for customers in the stationary distribution sector, but also in e-commerce. Overall, turnover increased by 17.7% to 3.8 billion euros. EBIT increased by 22.8% to EUR 205 million. Thanks to the targeted use of digitization, automation and standardization, the division improved its profitability and increased the EBIT margin to 5.4% (Q1 2021: 5.2%).

eCommerce solutions: stable development of revenues and profits

After the massive jump in eCommerce Solutions revenue and profit in the previous year, both key figures stabilized in line with the expected normalization of parcel volumes. EBIT again exceeded the three-digit million range with 102 million euros (Q1 2021: 117 million euros). At 1.4 billion euros, turnover was 0.6% lower than the previous year. Pricing actions offset the expected drop in shipment volumes. According to the respective corona restrictions, the parcel volumes developed differently from region to region. Levels returned to normal, notably in the Netherlands and the United States, with significantly higher volumes in India. Despite the normalization of online retail and a slight increase in operating costs, the EBIT margin remained at a high level of 7.1% (Q1 2021: 8.0%).

Post and parcel Germany: earnings expectations met

Post & Parcel Germany’s EBIT amounted to 355 million euros in the first quarter, as expected, below the exceptionally strong prior year (Q1 2021: 556 million euros). In the Parcels business unit, shipping volumes normalized as expected. At the same time, the letter mail business experienced stable development. As a result, revenues were slightly below the exceptionally high level of the previous year at €4.2 billion (Q1 2021: €4.6 billion). Due to lower capacity utilization in the parcel business, the EBIT margin also decreased year-on-year to 8.4% (Q1 2021: 12.2%). Measures to increase efficiency succeeded in countering the growing cost pressure, but could not fully offset it, as additional pandemic-related costs were also incurred.

– To finish –

Note to editors: Interview with CFO Melanie Kreis can be found on our homepage. The Group’s investor webcast can be viewed on our website from 10:00 a.m. It can be accessed at www.dpdhl.com/ir.

Deutsche Post DHL Group is the world leader in logistics. The Group connects people and markets and is a catalyst for global trade. It aspires to be the first choice of customers, employees and investors worldwide. The Group contributes to the world through responsible business practices, corporate citizenship and environmental activities. By 2050, Deutsche Post DHL Group aims to achieve zero-emission logistics.

Deutsche Post DHL Group is home to two strong brands: Deutsche Post is Europe’s leading postal service. DHL offers a full range of international express, freight forwarding and supply chain management services, as well as e-commerce logistics solutions. Deutsche Post DHL Group employs approximately 590,000 people in more than 220 countries and territories around the world. The Group achieved a turnover of more than 81 billion euros in 2021.

THE logistics company for the world.

Group financial highlights for the first quarter

1st trimester

1st trimester

Switch

in €m

2021

2022

in %

Revenue

18,860

22,593

19.8

– of which international

13,388

17,123

27.9

Profit from operating activities (EBIT)

1,911

2,159

13.0

Consolidated net income1)

1,190

1,351

13.5

Basic earnings per share (in €)

0.96

1.10

14.6

Diluted earnings per share (in €)

0.94

1.08

14.9

Divisional revenue in the first quarter

1st trimester

1st trimester

Switch

in €m

2021

2022

in %

To express

5,499

6,373

15.9

Worldwide Shipping, Freight

4,752

7,359

54.9

Supply chain

3,241

3,815

17.7

E-commerce solutions

1,454

1,445

-0.6

Post and parcel Germany

4,555

4,245

-6.8

Group/Consolidation functions

-641

-644

-0.5

Group

18,860

22,593

19.8

Divisional EBIT in the first quarter

1st trimester

1st trimester

Switch

in €m

2021

2022

in %

DHL

1,461

1,879

28.6

– To express

961

971

1.0

– Worldwide shipping, freight

216

601

>100

– Supply chain

167

205

22.8

– E-commerce solutions

117

102

-12.8

Post and parcel Germany

556

355

-36.2

Group/Consolidation functions

-106

-75

29.2

Group

1,911

2,159

13.0

1) After non-controlling interests

About Erin Redding

Check Also

September 5, 2022 Russia-Ukraine News

The last operating reactor at the Zaporizhzhia nuclear power plant has been disconnected from the …