Deutsche Post DHL Investor Relations. March 2014

Transcription

1 Deutsche Post DHL Investor Relations March 2014

2 Agenda 1 Strategy 2015: Towards sustainable growth 2 Structural trends lend support 3 Divisional highlights and roadmaps 4 Appendix Investor Relations March 2014 Deutsche Post DHL Page 2

3 Highlights 2013 Successful year for DPDHL supported by strong execution and continued growth in key markets Delivered EBIT targets despite weak economic conditions Key business trends intact throughout 2013 E-commerce & quality driving Parcel growth TDI growth fuels strong margin expansion in Express Continued soft freight markets Strong Free Cash Flow reflecting solid operating performance, increased management focus as well as some timing effects Significant net profit growth dividend proposal: EUR 0.80 Delivered on all aspects of 2013 guidance Investor Relations March 2014 Deutsche Post DHL Page 3

4 All aspects of 2013 guidance fulfilled EBIT Group Guidance ) EUR bn Actual 2013 EUR 2.861bn (+7.4%) MAIL EUR bn EUR 1.226bn DHL divisions EUR bn EUR 2.057bn Corp. Center/ Other ~ EUR -0.4bn EUR bn Net income Net income growth to exceed operating profit growth EUR 2.091bn (+27.5%) Capex Around EUR 1.7bn EUR 1.755bn Free Cash Flow To cover FY 2012 dividend (EUR 846m) EUR 1.653bn 1) Most recent guidance, initial 2013 guidance was: Group EBIT of EUR bn with DHL Divisions at EUR bn; net income growth in line with operating profit development; Capex of around EUR 1.8 bn Investor Relations March 2014 Deutsche Post DHL Page 4

5 Strategy 2015: All divisions have a clear roadmap Divisional priorities MAIL Strategy 2015 Sustainably stabilize EBIT by improving efficiency and investing in growth in the parcel business and in new markets Increase market share by expanding network and services while improving margins Transform business model (Transformation/NFE) and drive sustainable growth in difficult market environment Growth through Excellence Generate profitable growth based on industry expertise in outsourcing and emerging markets Investor Relations March 2014 Deutsche Post DHL Page 5

6 Profitability improvement sees further progress but still more work to be done 2013 shows expected margin acceleration in Express Margin improvement >100bps in 2013 driven by: Increasing core TDI share in product mix Efficiency gains and scale effects in ground and air 7.1% 7.8% 8.7% 7.8% 1) 8.9% Margin stable as cost containment made up for: Weak volume environment 2.8% 2.9% 3.3% 3.3% Increase in NFE costs Margin slightly up, reflecting: Benefits from internal optimization programs and new contracts 2.1% 2) 2.7% 2.9% 3.1% Weak economic environment, esp. in Europe One-off effects net out over the full year FY 2010 FY 2011 FY 2012 FY ) 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) Investor Relations March 2014 Deutsche Post DHL Page 6

7 Full-Year 2014 Guidance EBIT Group EUR bn MAIL ~ EUR 1.2bn DHL divisions Corp. Center/ Other Free Cash Flow EUR bn Free Cash Flow Better than EUR -400m To at least cover 2013 dividend Tax rate around 20% Gross Capex of around EUR 1.9bn Investor Relations March 2014 Deutsche Post DHL Page 7

8 2015 targets confirmed: Group EBIT of EUR bn After foreign domestic parcel businesses shift from DHL to MAIL, update of guidance distribution between these divisions Group 2015 Previous EUR bn 2015 Update EUR bn MAIL Min EUR 1.0bn Min EUR 1.1bn DHL Divisions EUR bn EUR bn Corp. Center/ Other ~ EUR -350m ~ EUR -350m Investor Relations March 2014 Deutsche Post DHL Page 8

9 Operating cash flow development OCF, in EUR m Strong Q4 OCF generation again confirms positive trend 1,561 1,262 1,357 3) ) ) Q1 Q2 Q3 Q4 1) Q2 2012: excl. EUR -21m effect from VAT settlement 2) Q3 2012: excl. EUR -300m effect from VAT settlement 3) Q4 2012: excl. EUR -1,986m Pension funding Investor Relations March 2014 Deutsche Post DHL Page 9

10 2013 dividend recommendation: Dividend increase of 14% Dividend Proposal of EUR 0.80 per share EUR % EUR % EUR % EUR ) 49% 60% 40% Net profit growth driven by operating performance, better financial result and lower tax rate We will propose a dividend of EUR 0.80 to the AGM on May 27, 2014, i.e. dividend payments to DPDHL shareholders on May 28, 2014 of EUR 967m Adjusted for major non-recurring items this reflects a payout ratio of 49%: 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 Investor Relations March 2014 Deutsche Post DHL Page 10

11 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, 2011 Investor Relations March 2014 Deutsche Post DHL Page 11

13 Structural trend Emerging Markets tntact as developing markets posting above-average growth Emerging Markets drive growth across DHL Divisions Express Revenue 1) : EUR bn CAGR % 9.6 Forwarding Revenue 1) : EUR bn CAGR % 7.8 Supply Chain Revenue 1) : EUR bn CAGR % 15% 24% +9% +14% 16% 32% 14% 26% +14% +9% 17% 28% 7% 7% +12% +17% 12% 9% 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 Latin America, Middle East, Africa Asia Pacific 1) Based on external 3rd party revenue, region according to customer invoice Investor Relations March 2014 Deutsche Post DHL Page 13

14 Structural trend E-Commerce : A strong growth driver for DPDHL, in Germany and beyond MAIL: Sustained growth in Germany New all-time German Parcel volume record with >1bn parcels delivered in 2013 MAIL: Offer for B2C International EXPRESS: Premium B2C TDI remains the absolute core focus In addition, strong B2C growth due to demand for speed, insurance, tracking or exotic trade lanes by international e-shoppers DHL Express optimizing last-mile delivery to low-density areas SUPPLY CHAIN: E-Fulfillment solutions Serving selected domestic B2C markets outside Germany German in- and outbound B2C delivery & dedicated solutions for cross-border e-commerce Faster and higher quality response to serve e-commerce customer needs Integrated solutions for multichannel retailing Investor Relations March 2014 Deutsche Post DHL Page 14

15 Agenda 1 Strategy 2015: Towards sustainable growth 2 Structural trends support our growth 3 Divisional highlights and roadmaps 4 Appendix Investor Relations March 2014 Deutsche Post DHL Page 15

16 MAIL: Continued mix shift to parcel driven by E-Commerce Mail Communication volumes m units +3.1% 1) Business Highlights E-commerce drives mix shift towards Parcel: 1, % 1) 2,080 7,578 7,816 Parcel Other/Cons. Global Mail 20% 1% 12% 12% 26% 1% Q Q FY 2012 FY 2013 Letter 2) 67% 60% Parcel volumes m units +6.3% Q Q % 955 1,026 FY 2012 FY E-Post revenue guidance of ~ EUR 100m achieved Unchanged trend in letter volume decline, partly offset by election volumes, SEPA introduction and stamp price increase Factor costs increases, notably wage costs Transfer of selected foreign domestic parcel businesses from DHL to MAIL Division effective Jan 1, 2014 (2013 EBIT of ~ EUR 60m) 1) Increase in Mail Communication volumes supported by shift effect from discontinuation of product Infobrief (Dialogue Marketing) 2) As reported: aggregation of business segments Mail Communication, Dialogue Marketing and Press Services Investor Relations March 2014 Deutsche Post DHL Page 16

17 MAIL: Re-inventing the parcel delivery industry with smart consumer-centric solutions We foster e-commerce growth and improve delivery Pre-announcement of delivery Convenience logistics Parcelbox (Automated doorstep delivery) Making parcel delivery as convenient as receiving mail Nation-wide roll-out starting in Q Facilitating the lives of our customers Packstation (24/7 parcel pick-up and drop-off) De-coupling delivery from personal hand-over 2,650 locations with a capacity for 250,000 parcels per day (2014) Delivery address of choice Delivery day of choice Investor Relations March 2014 Deutsche Post DHL Page 17

18 MAIL: Proposed letter pricing regulation New price cap formula revised to CPI-0.2% Revised price cap regime offering more potential to partially offset factor cost inflation Proposed price cap of Federal Network Agency 1) Formula: x-factor reduced from 0.6 to 0.2% Regulation valid until Dec 31, 2018 Allowing potential average price increase of 1.6% on Jan 1, ) Directly impacted Mail revenues of EUR 3.3bn 3) 1) Federal Network Agency = Bundesnetzagentur; CPI = German Consumer Price Index 2) 1.6% = 1.8% inflation rate minus 0.2% x-factor; based on arithmetic average of the monthly CPI values for reference period from July June 2013: 1.6% price increase applicable based on weighted average across the relevant Mail product portfolio as per price-cap regulation; 3) 2012 revenues affected subject to price-cap regime Investor Relations March 2014 Deutsche Post DHL Page 18

19 EXPRESS: Strong TDI growth continues Time Definite International (TDI) Revenues per day in EUR m 36.5 Q % Time Definite International (TDI) Shipments per day 000s +8.4% 39.5 Q FY % +8.4% 36.5 FY 2013 Business Highlights Focus on TDI paying off, leading to market share gains across the regions Better product mix, higher network utilization and process improvements drive expected margin acceleration: EBIT margin, yoy +30bps 1) +130bps 2) +120bps +120bps Q1 Q2 Q3 Q4 Q Q FY 2012 FY ) Q excl. EUR 12m positive effect from disposal gain 2) Q margin excl. EUR 113m one-off items from VAT, restructuring provision release and disposal gain Investor Relations March 2014 Deutsche Post DHL Page 19

20 EXPRESS: TDI growth enabled by network investments Major Investments 2012 New North Asia Hub Milano & Bologna Ground Hubs Mexico Ground Hub Miami Gateway Major Investments 2013 Cincinnati Hub Expansion Saudi Arabia Gateway London Heathrow Gateway Leipzig European Express Hub Opening: May 2008 EUR >300m investment so far Largest DHL hub globally New investment: EUR 150m Work started in Q4 13 Expected operational in Q4 14 After expansion, overall capacity increased by 50% to > 150,000 shipments/hour Investor Relations March 2014 Deutsche Post DHL Page 20

21 Keep executing our successful strategy Motivated People Great Service Quality Loyal Customers Profitable Network QCC 10% margin by 2015 CIS program is a key success factor enabling our employees to deliver the best performance for our customers Focus on the best service for our TDI customers driving industry-leading volume growth Insanely customer centric, supported by strengthening brand awareness Strict discipline on pricing tools / principles Virtual airline balances service quality, planning flexibility and operating costs Focus on costs and cash generation On track towards 2015 targets driven by organic growth, operating leverage as well as direct and indirect cost management Investor Relations March 2014 Deutsche Post DHL Page 21

22 FORWARDING, FREIGHT: Implementation of transformation program NFE in a weak market environment Air freight 000s Tons 4, % 1,070 1,046 Q Q Ocean freight 000s TEU 1) 2, % -4.8% 3,949 FY 2012 FY % 2,807 Business Highlights AFR and OFR volumes reflect ongoing weak global trade growth, structural trends and ongoing shift from air to ocean freight in 2013 Q4 saw AFR volumes decline moderately and OFR volumes increase slightly, supported by seasonally stronger demand out of Asia Selective market strategy combined with less favorable sector-client exposure for DHL lead to stable EBIT margin performance but also market share losses NFE implementation on track cost increase for 2013 below initial expectations Q Q FY 2012 FY ) Twenty Foot Equivalent Unit Investor Relations March 2014 Deutsche Post DHL Page 22

23 FORWARDING: Executing our planned transformation Update on New Forwarding Environment (NFE) Changing the future of FORWARDING Modular state-of-the-art IT platform Standardized processes on a global scale Centralized back office support (Global Service Centers) We have a clear vision More customer intimacy Improved end-to-end transparency Increased productivity and implementation is on track Functionality: pilot country indicates new process landscape will deliver expected improvements Timing: in line with plans Costs: lower than expected in 2013, mainly based on savings from project mgmt Investor Relations March 2014 Deutsche Post DHL Page 23

24 SUPPLY CHAIN: Benefitting from continued outsourcing demand and increased market share New signings, EUR bn 1) FY 2010 FY 2011 FY 2012 Revenue by Sector FY 2013 Williams Lea Others 4% Energy 9% Retail 3% 25% Automotive 9% 1.5 FY 2013 Business Highlights Global outsourcing trend intact as evidenced by continued strong new signings, also supported by better sales efficiency New business with international and domestic customers continue to drive attractive growth in emerging markets Automotive as well as Life Sciences & Healthcare continue to show strongest global sector growth trends Continue to focus on sustainable, profitable growth as well as specific sector expertise Technology 11% Life Sciences & Healthcare 19% 20% Consumer 1) Annualized revenue Investor Relations March 2014 Deutsche Post DHL Page 24

25 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 Investor Relations March 2014 Deutsche Post DHL Page 25

26 Wrap up: Focus on key growth markets continues to pay off MAIL EBIT clearly stabilized above EUR 1bn Further progress on DHL profitability improvement, with strong improvement in Express Strong 2013 cash flow performance, however with some timing effects 2015 Group guidance confirmed Save The Date: Capital Markets Day on April 2 nd Investor Relations March 2014 Deutsche Post DHL Page 26

28 Deutsche Post DHL at a glance 2013 key figures Group: Sales: EUR 55,085m; EBIT: EUR 2,861m; Employees 1) : 435,520 Domestic German Mail and Parcel International and Domestic Express Global Air, Ocean and Road Freight Global Supply Chain Solutions Sales: EUR 14,452m Sales: EUR 12,712m Sales: EUR 14,838m Sales: EUR 14,277m EBIT: EUR 1,226m EBIT: EUR 1,133m EBIT: EUR 483m EBIT: EUR 441m Empl. 1) : 149,692 Empl. 1) : 84,986 Empl. 1) : 44,174 Empl. 1) : 143,761 The postal service for Germany The logistics company for the world Corporate Center / Other: Sales: EUR 1,251m; EBIT: EUR -422m 1) Average FTEs FY 2013 Investor Relations March 2014 Deutsche Post DHL Page 28

29 Group P&L FY 2013 Good EBIT and EPS growth in a difficult macro environment EUR m FY 2012 FY 2013 Chg. Revenue 55,512 55, % EBIT 1) 2,665 2, % t/o MAIL 1,048 1, % t/o DHL 2,042 2, % Financial result 2) % Taxes % Consolidated net profit 3) 1,640 2, % EPS 5) (in EUR) % Sales slightly down due to adverse currency effects as well as smaller disposals. Organic growth of +2.8% MAIL EBIT growth supported by VAT-related charge in 2012 and postage stamp provision utilization in 2013 DHL EBIT growth held back by positive one-offs in 2012 and adverse currency effects. Strong EBIT increase in Express Strong improvement in financial result mainly due to lower interest rates and benefits from pension funding Lower taxes reflect reduction of tax rate to 14% due to additional activation of tax loss carry forwards as well as positive tax audit closures Net Profit increase driven by EBIT growth, better financial result and lower tax rate. EPS of 1.64 excl. one-off effects 4) 1) 2012: EBIT effect from VAT charge (EUR -151m MAIL, EUR -30m EXPRESS), EXPRESS Q2 effects (EUR +143m) and 2013: EUR +50m postage stamp provision utilization 2) 2012: Postbank disposal (EUR +186m) and VAT settlement (EUR -115m); 3) Attributable to Deutsche Post AG shareholders 4) Stamp provision (EUR +50m), pension scheme change (Supply Chain, EUR +50m), restructuring costs (Supply Chain, EUR -30m), arbitration settlement (finance result, EUR +42m) 5) Undiluted, growth rate based on non-rounded numbers Investor Relations March 2014 Deutsche Post DHL Page 29

30 Group P&L Q Solid operating performance and positive tax rate evolution EUR m Q Q Chg. Revenue 14,577 14, % EBIT % t/o MAIL % t/o DHL % Financial result % Taxes Consolidated net profit 1) % EPS 2) (in EUR) % Flat revenue driven by negative FX effects in DHL divisions. Organic revenue grew by +4.2% Good Q4 EBIT growth reflecting Further strong performance in EXPRESS MAIL EBIT slightly down yoy due to factor cost increases EUR 50m one-off gain (Supply Chain) more than offset by charges for cost optimization (Supply Chain) and other headwinds in DHL Improved Financial Result mainly due to lower interest costs Positive Tax in Q4 as reduction of FY rate triggers unwinding of higher 9M tax charges Net profit strongly up, reflecting EBIT growth, improved financial result and favorable tax development 1) Attributable to Deutsche Post AG shareholders 2) Undiluted, growth rate based on non-rounded numbers Investor Relations March 2014 Deutsche Post DHL Page 30

31 Free Cash Flow Q Seasonally strong Q4 cash flow generation, with timing effects from Capex and Working Capital EUR m Cash from operating activities before changes in Working Capital Reported Q Pension funding eff. in Q Q4 excl. Pension funding 2012 Reported Q ,184 +1, Changes in Working Capital Net cash from operating activities after changes in Working Capital ,986 1,357 1,561 Net Capex Net M&A Net Interest Free Cash Flow -1,113 +1, ,124 Reported Cash Flow comparison impacted by pension funding in Q Strong Operating Cash Flow of EUR 1.6bn reflects good EBITperformance as well as strong working capital inflows, mainly in DHL Cash-out for capex actually below Q4 of last year despite strong yoy increase in reported capex FFO/Debt at 34.4% (year-end 2012: 28.9%) Investor Relations March 2014 Deutsche Post DHL Page 31

32 Net Debt (-)/Liquidity (+) Exceptionally strong Q4 FCF drives net debt improvement of EUR 1bn in Q4 3, , ) ,481-1,952-2,456 Net debt (Dec ) OCF before change in W/C Changes in W/C Net Capex Net dividend Other effects Net debt (Dec ) Net debt (Sep 30, 2013) 1) o.w. EUR 846m to DPDHL shareholders Investor Relations March 2014 Deutsche Post DHL Page 32

33 Target financing structure in place Taken advantage of attractive market conditions EUR 1bn issued via two conventional bonds in the amount of EUR 500m each in Sep: 5-year term, coupon of 1.5% p.a. 10-year term, coupon of 2.75% p.a. Refinancing EUR 0.9bn bond due Jan 2014 (10 year term, coupon 4.875%) Five-year EUR 2bn syndicated loan facility agreed in 2010 renewed ahead of schedule until ) with significantly reduced annual commitment fee and lower margin Bond maturity structure % % 1.50% 1,000 2) % 1.875% % 2.75% % Early refinancing of 2014 maturity Issue Volume Coupon 1) With two additional extension options of one year each 2) Convertible bond assuming no conversion before 2019 Investor Relations March 2014 Deutsche Post DHL Page 33

34 Balance sheet impact of IAS 19R implementation IAS 19R implementation as of Jan 1, 2013 in EURm Plan assets Unrecognized gains/losses Net Pension Provision Total Defined Benefit Obligation EUR 14,748m 9,758 3,082 1,908 unrecognized gains/ losses included within net pension provisions Total Defined Benefit Obligation EUR 14,776m 9,758 5,018 Total Defined Benefit Obligation EUR 14,797m 9,900 4,897 Highlights Restated 2012 balance sheet: Net pension provision increased by EUR 3.1bn Equity reduced by EUR 3.0bn (Difference mainly due to tax effects) FY 2013 development: The benefit of marginally higher discount rates essentially offset by higher expected salary and pension rates Dec 31, 2012 as reported under IAS 19 Dec 31, 2012 as restated under IAS 19R Dec 31, 2013 as reported under IAS 19R Investor Relations March 2014 Deutsche Post DHL Page 34

35 MAIL: Divisional results Q Usual seasonally strong Q4 EBIT driven by Mail & Parcel peak season EUR m Q Q Chg. Revenue 3,851 3, % EBIT % Operating Cash Flow -1, n.a. Revenue increase reflects stamp price increase and Parcel growth EBIT slightly down as higher factor costs outweigh benefits from Parcel growth and stamp price increase Operating Cash Flow comparison affected by EUR 1.9bn contribution to pension fund in 2012 Capex strongly up yoy, mainly due to increased investments in Parcel network, catching up from lower levels in 9M 2013 Capex % Investor Relations March 2014 Deutsche Post DHL Page 35

36 Working days Germany Q Q H Q M Q H FY Investor Relations March 2014 Deutsche Post DHL Page 36

37 EXPRESS: Divisional results Q Ongoing strong volume growth drives further EBIT improvement EUR m Q4 Q Chg. Revenue 3,342 3, % EBIT % Operating Cash Flow % Capex % Revenue flat yoy due to FX effects. Organic revenue growth of 5.8% driven by ongoing strong growth in Time Definite International (TDI) volumes across all major regions (Europe +7%; Americas +10%; APAC +9%, MEA +11%) Strong EBIT development driven by TDI volume growth as well as higher efficiency in ground and air operations. EBIT margin up to 9.6% vs. 8.4% last year Operating Cash Flow increased as a result of EBIT growth and strong working capital management Capex caught up in Q4 after 3 quarters of lower spending than last year. Investments included mainly spend on hubs and gateways Investor Relations March 2014 Deutsche Post DHL Page 37

38 sed financial management Topline / Revenue Management 1. Profitable Growth Revenue per Day (RpD) Shipment per Day (SpD) Revenue per Shipment (RpS) Weight per Shipment (WpS) Revenue per Kilo (RpK) 5. Cash Management Direct Cost Management Gross Profit Triangle Direct Cost Management 2. Leverage Aviation Network Reduce Cost per Kilo (CpK) by 1.5% yoy in Efficiency in Ground Operations Reduce Operations Cost per Move (OCPM) by 2.5% yoy in Reduce Indirect Cost Share of Revenue Investor Relations March 2014 Deutsche Post DHL Page 38

39 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% 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 Investor Relations March 2014 Deutsche Post DHL Page 39

40 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 1) Others Inbound Asia 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 1 1) Source: MI study 2012, annual reports and desk research; APAC: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN Investor Relations March 2014 Deutsche Post DHL Page 40

41 Increasing TDI revenue share Other Product Revenue Share (DDI, DDD, ACS etc.) Time Definite Domestic (TDD) Revenue Share 69% Time Definite International (TDI) Revenue Share 79% TDI+TDD Products TDI Time Definite International TDD Time Definite Domestic DDI Day Definite International (only offered in 5 countries in EU) DDD Day Definite Domestic ACS Air Capacity Sales Investor Relations March 2014 Deutsche Post DHL Page 41

42 Our dedicated fleet 30 Intercont Aircraft 138 Regional Aircraft 90 Feeder Aircraft Youngest intercont fleet in the Industry! 7 new aircraft in average aircraft age 3.5% reduction in CO 2 output during aged aircraft replaced; 727, DC8, A300 The only Helicopter express delivery service in the World! Global access to small markets (Africa) Growth enablers! Investor Relations March 2014 Deutsche Post DHL Page 42

43 Balanced, virtual airline business model increases flexibility Asset Intensity Capacity Commitment Flexibility Cost Position 1) 1) Commercial Air Linehaul Investor Relations March 2014 Deutsche Post DHL Page 43

44 Air Capacity Sales (ACS) 4 different product offerings Selling air cargo space purely helps to offset aviation costs and is not a TDI product sold by the core sales team; DHL Global Forwarding (DGF) is the main customer Block Space Agreement, guaranteed air cargo product Express TDI core product, capacity based on average utilization, adjusted on a daily basis Total Spare Capacity (TSC), average capacity not utilised by Block Space or TDI Core on a planned basis. To be sold by air cargo product 3 Air cargo guaranteed, a set amount of the Total Spare Capacity guaranteed for priority traffic & key customers More than ACS 500,000 bookings per year For DGF we improved from no. 8 in 2010 to the no. 3 supplier in 2012 DGF is the biggest customer from DHL Aviation 4 CORE Flex & Air Capacity Sales Flex, a set amount of the Total Spare Capacity to be utilised for TDI core volume surge and/or air cargo filler traffic Investor Relations March 2014 Deutsche Post DHL Page 44

45 FORWARDING, FREIGHT: Divisional results Q Strong Cash flow performance, profitability below last year s level due to higher NFE costs and volume decline EUR m Q4 Q Chg. Revenue 3,989 3, % EBIT % Operating Cash Flow % Capex % Revenue decline mainly due to FX effects. Organic decline of 0.4% reflecting weaker demand in Air Freight and pressure on selling rates in Air and Ocean. However, better sequential revenue development in Air and Ocean, mainly attributable to seasonal effects EBIT decline reflects weak volume development, as well as yoy increase as expected in NFE implementation costs Strong Operating Cash Flow increase driven by working capital development Capex at usual low level, mainly related to NFE implementation and selective warehouse investments Investor Relations March 2014 Deutsche Post DHL Page 45

46 DGF DGF Maximized profitability: GP on product level reflects our size advantage and product portfolio Gross Profit margin 2013 (in %, Air Freight) 25.4% 20.1% comparable 1) DGF DGF Gross Profit margin 2013 (in %, Ocean Freight) 21.7% 19.3% comparable 1) 25.2% 19.6% 21.9% 20.8% 20.7% 17.7% 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 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 Investor Relations March 2014 Deutsche Post DHL Page 46

47 SUPPLY CHAIN: Divisional results Q Ongoing steady performance across all metrics EUR m Q4 Q Chg. Revenue held up well driven by new business projects, despite strong FX impact. Organic revenue growth was +7.5% Revenue 3,733 3, % EBIT % Operating Cash Flow % Capex % Contracts won Annualized revenue Supply Chain New gains Strong EBIT performance as the contract portfolio improves. One-time accounting gain of EUR 50m, related to a switch in pension schemes in the UK, partly offset by EUR 20m charges for additional cost improvement measures Operating Cash Flow reflects operating performance as well as positive working capital evolution, incl. related year-end timing effects New contracts signings strong and selective as we focus on longer-term margin improvement Investor Relations March 2014 Deutsche Post DHL Page 47

48 Market position DSC is further increasing its leading market share in a fragmented market with most growth potential remaining in the continuing outsourcing trend Top 3 Market Shares, 2012 Total Market Size, bn Outsourced Contract Logistics CAGR Largest providers 1) Other ~13% In house Logistics 1,152 87% ~13% 8.2% DSC 1, % 2.4% 2.2% CEVA K+N 159 Largest Providers % DSC has more than 3 times the size of its next competitor Market share further increased by 40 basis points Source: DHL projection based on Transport Intelligence and Global Insight data; 1) with global footprint Investor Relations March 2014 Deutsche Post DHL Page 48

49 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. Investor Relations March 2014 Deutsche Post DHL Page 49

50 Investor Relations Contacts Martin Ziegenbalg, Head of Investor Relations Robert Schneider Sebastian Slania Sarah Bowman Daniel Stengel Investor Relations March 2014 Deutsche Post DHL Page 50