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Jan 12, 2021 at 9:39 PMDeutsche Post DHL Group has raised its medium-term forecasts against the backdrop of positive business development. Strong growth in revenue and EBIT was driven by an exceptionally dynamic Christmas season. Following a very good performance in 2020, the Group expects further earnings growth in 2021 and beyond.
(Bonn) Deutsche Post DHL Group today published preliminary consolidated results for the year 2020. In a challenging economic environment, the Group’s EBIT was increased to a record level of 4.840 billion euros, significantly exceeding the earnings forecast of 4.1 to 4.4 billion euros for the 2020 financial year.
With its wide range of logistics services, the Group benefited from the rise in global e-commerce activities and increased consolidated revenue by 5 percent to 66.8 billion euros. Evidence of the profitable growth in the past financial year is the extraordinarily positive development in the express as well as national and international parcel business. The dynamic increase in shipment volumes accelerated again during the Christmas season, with consistently optimal utilization of network capacity. Despite an unprecedented strain on resources, the Group managed to maintain a consistently high service level.
“2020 was an extraordinary year: Despite numerous challenges, we were able to achieve a record result. Our strategy and business model have proven to be resilient – even in turbulent global economic times. Thanks to the incredible performance of our 550,000 employees worldwide, we made a positive contribution to people and societies during the Covid-19 crisis. We are now focusing on the transport of the Covid-19 vaccine around the world,” said Frank Appel, CEO of Deutsche Post DHL Group.
Increase in Earnings Forecast for 2022
In light of the positive business development, the Group has raised its medium-term forecasts. Deutsche Post DHL Group expects that the Group EBIT in 2021 will be above the adjusted EBIT for 2020 of around 5.4 billion euros; furthermore, the Group EBIT for 2022 is projected to be above the expected level for 2021. A detailed outlook for the financial years 2021 and 2023 will be provided by the company upon the announcement of the full annual results on March 9.
The outlook for the cumulative free cash flow in the years 2020-2022 has been raised to more than 6 billion euros (previously: between 5.0 and 6.0 billion euros). The expected gross investments (Capex) in the same period are now around 9.5 billion euros (previously: between 8.5 and 9.5 billion euros). This includes effects from the announcement today of the new order for eight additional 777 freighter aircraft.
Outstanding Development of Free Cash Flow Amid Ongoing Investment Activity
Free cash flow amounted to around 2.5 billion euros in the 2020 financial year, significantly exceeding the previous forecast of more than 2.0 billion euros. The Group managed to surpass the previous year’s result by around 1.6 billion euros as well as the market estimate. With gross investments of around 3.0 billion euros, the Group invested about 100 million euros more than projected in 2020.
“Financially, the past financial year was a complete success. We were able to implement all planned investments in future growth while simultaneously increasing our profitability. We can be proud of the outstanding development of free cash flow in an economically uncertain environment due to the pandemic. With the record result behind us and the economic recovery in sight, we can confidently provide a more positive outlook,” said CFO Melanie Kreis.
Divisions Well Positioned for E-Commerce Boom
Post & Parcel Germany: Revenue increased by 7% to 16.5 billion euros in the financial year (Q4: 4.8 billion euros, +12% compared to the previous year). EBIT increased by 29% to 1.590 billion euros in the financial year (Q4: 670 million euros, +28% compared to the previous year). Growth in the parcel business accelerated during the fourth quarter; overall, shipment volumes increased by 23% compared to the previous year’s quarter to a record level. The decline in letter volumes stabilized in the quarter at -7%.
Express: Revenue increased by 12% to 19.1 billion euros in the financial year (Q4: 5.6 billion euros, +20% compared to the previous year). EBIT increased by 35% to 2.750 billion euros in the financial year (Q4: 1.040 billion euros, +70% compared to the previous year). Time-sensitive international express shipments increased by 17% in all regions of the world in the fourth quarter. This brought the growth for the entire year to 9%. The main driver of this development remained B2C volumes, while B2B volumes continued to recover in the fourth quarter.
Global Forwarding, Freight: Revenue increased by 5% to 15.9 billion euros in the financial year (Q4: 4.4 billion euros, +14% compared to the previous year). EBIT increased by 13% to 590 million euros in the financial year (Q4: 170 million euros, -2% compared to the previous year).
Supply Chain: Revenue decreased by 7% to 12.5 billion euros in the financial year (Q4: 3.5 billion euros, -3% compared to the previous year). EBIT decreased by 53% to 430 million euros in the financial year (Q4: 175 million euros, -1% compared to the previous year).
eCommerce Solutions: Revenue increased by 19% to 4.8 billion euros in the financial year (Q4: 1.5 billion euros, +33% compared to the previous year). EBIT increased to 160 million euros compared to a loss in the previous year (Q4: 80 million euros, compared to a loss in the previous year).
The comprehensive reporting for the entire year 2020 will be published as planned on March 9, 2021.
Photo: DPDHL
