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9. July 2020The Deutsche Post DHL Group was able to make significant gains in the second quarter, increasing its results by 25 percent compared to the previous year 2019. The forecasts have been adjusted upwards. Employees worldwide will receive a one-time bonus of 300 euros.
(Bonn) The world’s leading logistics company, Deutsche Post DHL Group, was able to significantly increase its profit in the second quarter of 2020 despite Covid-19. EBIT rose by around 16 percent to approximately 890 million euros. Adjusted for one-time effects from the previous year and this year, the operating result improved by around 25 percent compared to 2019.
As recognition for their efforts during the past months of the Covid-19 pandemic, the company has decided to pay employees worldwide a one-time special bonus of 300 euros¹. This one-time payment will be made in the coming months and is aimed at colleagues in all areas of the company and in all countries. Excluded are executives. Overall, the company will make special payments totaling around 200 million euros, which will be recorded in the third quarter of 2020.
Date and Dividend Proposal for the Annual General Meeting
Deutsche Post DHL Group will hold the 2020 Annual General Meeting on August 27 in a virtual online format. The company proposes a stable dividend of 1.15 EUR per share compared to the previous year.
“Our strategy is focused on achieving three core objectives: We want to be the provider, employer, and investment of choice. Our success in the past months of the crisis is based on our ability to align these goals in everything we do. That is why we have decided to pay a dividend at last year’s level to our shareholders and a special bonus to our employees,” said Frank Appel.
Business Development in the Second Quarter of 2020
The business development at the beginning of the second quarter was still characterized by the pandemic protection measures in Europe and North America and a initially sharp decline in volume. The company has implemented measures to adapt to the pandemic-related changes in utilization and to maintain its own flight capacities. During the course of the second quarter, a slow recovery in volume development began. Furthermore, since the end of March, the company has seen good development in shipments driven by online trade, both internationally and in the German parcel business.
The preliminary group EBIT reached around 890 million euros in the second quarter (2019: 769 million euros). This includes around 100 million euros in expected burdens from the realignment of the StreetScooter business, as well as around 100 million euros in one-time special write-downs triggered by the lockdown measures, primarily affecting the Supply Chain and eCommerce Solutions divisions. A distinction between operating results before and after effects from the Covid-19 pandemic is no longer made, as this distinction became increasingly artificial and less meaningful during the course of the second quarter.
Increase in Various Areas
For the Post & Parcel Germany segment, EBIT amounts to around 260 million euros (2019: 177 million euros). The Express segment achieved an EBIT of around 560 million euros in the second quarter, exceeding the previous year’s quarter result of 521 million euros. The Global Forwarding, Freight segment also reported a result of around 190 million euros, above that of the previous year (2019: 124 million euros). In the Supply Chain segment, the aforementioned special write-downs in the second quarter amounted to around 60 million euros, resulting in a result of 30 million euros, below the previous year’s result of 87 million euros. The eCommerce Solutions segment achieved a balanced EBIT despite special write-downs of around 30 million euros (2019: -18 million euros).
The overall positive business development is underscored by the persistently strong cash flow; for the second quarter, the free cash flow is over 500 million euros, significantly above the previous year (2019: -547 million euros). Thus, a positive free cash flow of over 100 million euros was achieved in the first half of the year.
The complete report for the second quarter will take place as planned on August 5, 2020.
Forecast: EBIT Target for 2020 Introduced; Outlook for 2022 Adjusted
In light of the recent performance dynamics, management has decided to provide the following outlook for the full year 2020:
The reported group EBIT is expected to be between 3.5 and 3.8 billion euros. This includes the costs for the StreetScooter realignment of around 400 million euros communicated in April, the one-time bonus payment of around 200 million euros in the third quarter, as well as the aforementioned special write-downs of around 100 million euros.
With ongoing uncertainty about the course of an economic recovery in the coming two years, the mid-term earnings outlook for the group for 2022 is updated as follows:
- In the favorable case of a rapid recovery of the global economy without significant setbacks in the pandemic development (‘V-shaped’ development), the group expects EBIT of more than 5.3 billion euros.
- In the case of a rather hesitant recovery, e.g., due to at least local setbacks in the pandemic development (‘U-shaped’ development), the group expects EBIT of around 5.1 billion euros.
- In the unfavorable case of a very slow recovery, e.g., due to more significant setbacks in the pandemic development (‘L-shaped’ development), the group expects EBIT of around 4.7 billion euros.
The investment plans (Capex) for the years 2020-2022 are confirmed with a cumulative amount between 8.5 and 9.5 billion euros. The expectation of a cumulative free cash flow between 5.0 and 6.0 billion euros during this period is also confirmed.
Photo: © DPDHL
