Deutsche Post : CFO Virtual Roadshow (Germany), 7 August 2020

VIRTUAL MANAGEMENT ROADSHOW

Melanie Kreis, Group CFO

August 7th, 2020

Key Highlights

• As pre-released, Group EBIT back to growth in Q2 2020
• Strong cash flow development further testifies fundamentallystrongoperatingperformance
• Position of strength allows to carefully steer cash utilization between balance sheet safety, employee bonus, growth investments and shareholderreturns

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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DPDHL Group Investment Case Fully Intact

EARNINGS

• Sustainable growth from diversified global market leader

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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Q2 2020 Group Revenue

GROUP

€15,959m

€+479m

(+3.1%)

Revenue growth yoy

All in €m

+368

+253+277

+167

			-544
P&P Germany	Express	DGFF	DSC	DeCS

Organic Growth	Group:	+7.0%	+7.9%	+11.2%	-13.1%	+17.4%
+4.6%

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P&P Germany: Revenue up 7% as Parcel growth & yield measures more than offset DM volume decline

Q2 2020	Volume	Revenue
yoy
Mail Communication	-3.0%	+4.4%
Dialogue Marketing	-27.2%	-27.0%
Parcel Germany	+21.4%	+28.1%

• As previously communicated, DM showed significant reduction in advertisement volumes during lockdown
• MC volumes holding up well, revenue increase driven by yield measures
• Parcel volume growth significantly higher than usual - stronger revenue growth reflects regular, annual yield measures as well as mix effects

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Express TDI volume recovering from April trough

Global TDI SpD*, YoY Growth

TDI SpD* by Region, YoY Growth

8,3%

	Asia Pacific	1,5%
	Europe
	Americas

-0,8%

8,9%

Jan	Feb	Mar		Apr	May	Jun
	Q1: +0.6%				Q2: -0.2%

*SpD: Shipments per Day

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

	-3,2%	-2,7%
Q1 2020	Q2 2020

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DGFF: Increase in GP/unit in AFR and OFR drives strong Q2 performance

Q2 2020	Air Freight	Ocean Freight
yoy	(AFR)	(OFR)
Volumes	-13.7%	-19.6%
Gross Profit	+42.4%	-15.3%
GP/EXP t ; GP/TEU	+65.1%	+5.2%

• Very strong and unusual GP development in AFR due to extremely tight market
• Size and strong relationships with carriers and customers key to find & match capacity
• Internal process optimization ongoing: CargoWise roll-out considered completed in OFR and >30% in AFR - new digital customer portal myDHLi successfully launched

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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DPDHL Group Investment Case Fully Intact

EARNINGS

• Clear agenda for improving profitability

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Q2 2020 Group P&L

in €m	Q2 2019	Q2 2020	vs. LY
Revenue	15,480	15,959	+3.1%
EBIT	769	912	+18.6%
Financial result	-137	-155	-13.1%
Taxes	-139	-182	-30.9%
Consolidated net profit*	458	525	+14.6%
EPS (in €)	0.38	0.43	+13.2%

*after minority interest

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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EBIT back to growth in Q2

GROUP EBIT €912m (+18.6% yoy);

+26.3% excl. 2019 One-offs, StreetScooter & 2020 asset impairments Note: No separation of COVID-19 impacts

in €m

			+26.3%
				1.101
			+229		-99		912
		872			-90
769	+103
Q2 2019	Q2 2019 One-offs	Q2 2019 excl.	Q2 Operating	Q2 2020 excl.	Q2 2020	Q2 2020	Q2 2020
EBIT Reported	& StreetScooter 1)	One-offs &	performance	One-offs &	One-offs2)	StreetScooter	EBIT Reported
		StreetScooter		StreetScooter
1) Q2 2019, One-offs:€-53m DSC restructuring costs, €-28m DeCS restructuring costs; StreetScooter: €-22m

1. Q2 2020, One-offs:€-99m asset impairments triggered by lockdown

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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Q2 EBIT, Divisional results and main drivers

EBIT Q2 2019

		+8.4%
+49.2%	521	565

EBIT Q2 2020

in €m

+53.2%

-59.8%

177

264

124	190	87		>+100%
	35
		1
				-18

Q2 2020 Comments

P&P Germany

• EBIT growth mainly reflects measures initiated in 2018 (overhead reduction, yield management,…)
• Parcel acceleration offsets volume decline in Dialogue Marketing

Express

• TDI volumes flat yoy, recovering from April trough
• Higher network cost balanced by cost & yield measures and higher ACS (air capacity sales) revenue

DGFF

• Tight AFR market drives strong AFR gross profit and EBIT increase
• Internal process optimization ongoing

DSC

• Low activity levels & temporary shut- down of several customer operations
• Profit contribution supported by customer portfolio and cost measures

One-offs yoy: Q2 2019: €-53mrestructuring charges; Q2 2020: €-62masset impairment

DeCS

• Strong growth in B2C
• On track towards positive profit contribution in 2020

One-offs yoy: Q2 2019: €-28mrestructuring charges; Q2 2020: €-30masset impairment

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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DPDHL Group Investment Case Fully Intact

CASH FLOW

• Continued investments for profitable growth
• Strong balance sheet and cash generation

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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Q2 2020 Cash Flow confirms fundamental strength of operating development

in €m	Q2 2019	Q2 2020	vs. LY
EBIT	769	912	+143
Depreciation/amortization	918	942	+24
Change in provisions	-10	113	+123
Income taxes paid	-235	-157	+78
Other	4	-7	-11
Changes in Working Capital	-181	-157	+24
OCF	1,265	1,646	+381
Net Capex	-1,188	-443	+745
Net cash for leases	-572	-562	+10
Net M&A	-8	-4	+4
Net interest	-44	-32	+12
Free Cash Flow	-547	605	+1,152
FCF (excl. B777 payments)	196	640	+444

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incl. B777 payments:

€35m in 2020; €743m in 2019

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Cash Flow Outlook: Overview of major drivers (1/2)

	2019	2020e	FCF effect	Main Drivers 2020 - 2022
	(in €m)	(in €bn)	22e vs 20e
EBIT	4,128	3.5-3.8		EBIT guidance: 2020: €3.5-3.8bn; 2022: between
	~€4.7bn and >€5.3bn, depending on macro recovery
				Includes non-cashone-offs in 2020 (StreetScooter,
Depreciation/amortization	3,684	~+4.0		impairments); slight increase reflecting investments excl.
				these 2020 one-off effects

Change in provisions

Income taxes paid

Changes in WC / Other

-506~-0.4

-843~-0.7

-414 +/- 0.2

Incl. effects for yearly pension payments; in 2019/2020 utilization of early retirement / restructuring provisions

Reflecting rising EBIT in line with 2022 guidance

Strong yoy development in 2020 YTD; slight WC build-up expected going forward

OCF

6,049

~6.6

Improvement mainly driven by EBIT growth

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Cash Flow Outlook: Overview of major drivers (2/2)

	2019	2020e	FCF effect	Main Drivers 2020 - 2022
	(in €m)	(in €bn)	22e vs 20e
OCF	6,049	~6.6		Improvement mainly driven by EBIT growth
Net Capex excl. B777 order	-2,374	~-2.4		Flat to slight gradual increase in regular gross Capex
B777 order	-1,100	~-0.3		Last tranche of Express B777 Capex in 2021
	(2021e: <€300m)
Net Cash for Leases	-2,278	~-2.3		Slightly increasing in line with business growth
Net M&A	680	~-0.1		2019: €+653m China DSC deal;
	2020-22e: No significant M&A planned
Net Interest	-110	~-0.1		No major change expected
Free Cash Flow	867	~1.4		Significant improvement in line with 2022 target

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Q2 2020: Major balance sheet movements

€2.25bn senior bonds issuance in May		Update on pension status

Three senior bonds issued:

in €m

• €750m, 6-year maturity, 0.375% coupon rate

	€750m,	9-year maturity, 0.75% coupon rate	4.717	5.234	Total
	€750m,	12-year maturity, 1% coupon rate			Average
Balance sheet extension:

 Increase in non-current financial liabilities				Germany
 Increase in cash position and current financial assets	12.773		13.222
			4,6
Cash & Cash	2,9	2,6				UK
equivalents,				Mar 31st, 2020	Jun 30th, 2020
in € bn				Plan Assets	Net Pension Provision
	31.12.19	30.03.20	30.06.20

Discount rates

1,87%

1,47%

1,70%

1,50%

2,30%

1,40%

Mar 31st 2020		Jun 30th 2020

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DPDHL Group Investment Case Fully Intact

SHAREHOLDERS'

RETURN

 Long-term Finance Policy defining sustainable shareholder returns

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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2020 EBIT guidance: Confirmed as introduced on July 7th, 2020

in € bn

EBIT	2020
Group	3.5-3.8
P&P	~1.5
DHL	2.8-3.1
Corp. Functions	~ -0.75

Reported EBIT includes:

• ~ €-300m related to asset impairments (Q2, €-99m) & one-time payment (Q3e, ~ €-200m)
• One-timecosts related to non-core business (StreetScooter, ~ €-400m)

	2020
FCF	~1.4
Gross Capex	~2.9
(excl. leases)
Tax Rate	22-24%

FCF and Capex guidance includes ~ €300m Express intercontinental fleet renewal (B777) and ~ €-200mone-time payment

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2020 Guidance: What is factored in (reminder, no change)

GROUP EBIT guidance: €3.5-3.8bn,including					in €m
- €-99m asset impairments (Q2 2020)
- ~ €-200mone-time payment (expected Q3 2020)
-	~ €-400m StreetScooter
					4,200-4,500
	4.128	-80	4.048	+150-450		~ -300	~ -400	3,500-3,800
			+4-11%
				growth
FY2019 EBIT	2019 One-offs	2019 excl.	2020e	2020e excl.	2020e	2020e	FY 2020e EBIT
	Reported	& StreetScooter1)	One-offs &	Operating	One-offs &	One-offs2)	StreetScooter	Reported
			StreetScooter	performance	StreetScooter
1) 2019 One-offs: €+426m DSC China disposal, €-151m DSC restructuring costs, €-80m DeCS restructuring costs, €-115m StreetScooter
2) 2020 One-offs:€-99m asset impairments triggered by lockdown (Q2), ~€-200mone-time payment (Q3e)
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2022 Guidance: Confirmed as updated on July 7th, 2020

All targets to be rolled forward annually

Post-Covid Recovery	2022 EBIT
V-shape	> €5.3bn

U-shape

~ €5.1bn

2020-22 cumulative

FCF€5.0 - 6.0bn

Gross Capex	€8.5 - 9.5bn
(excl. leases)

L-shape

~ €4.7bn

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Shareholder Returns defined by Finance Policy; 2020 dividend continuity assured

Dividend proposal of €1.15 for FY 2019, stable yoy

								€1,15	€1,15	€1,15
				€0,80	€0,85	€0,85	€1,05
€0,65	€0,70	€0,70
														60%
59%	58%	53%	49%	50%		48%	52%		55%		55%
		46%					40%
2010	2011	2012	2013	2014	2015	2016	2017		2018		2019
	Underlying Payout Ratio 1)

Dividend payment of €1.4bn to DPDHL shareholders to be proposed at AGM on Aug 27th

1) Adjusted for non-recurring items when applicable

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

FINANCE POLICY

• Target / maintain rating BBB+
• Dividend payout ratio to remain between 40-60% of net profit (continuity and Cash Flow performance considered)
• Excess liquidity will be used for share buybacks and/or extraordinary dividends

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Wrap Up

• H1 20 has shown mission-critical importance of logistics-andresilienceofDPDHLportfolio
• Strong confidence in DPDHL perspectives given self-help potential and proven agility in volatile macroeconomicenvironment
• Unchanged strategic focus on our long-term plans, based on clear mission & values,diversified globalfootprintandstrongbalancesheet

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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INVESTOR RELATIONS SERIES: Experience Excellence. Simply Delivered.

VIRTUAL TUTORIAL		VIRTUAL TUTORIAL		VIRTUAL TUTORIAL		VIRTUAL TUTORIAL
	DHL Supply Chain			Express: Profitable
DGFF: myDHLi			Data Analytics
	Accelerated Digitalization			e-commerce growth
20 MAY 2020			03 SEPTEMBER 2020
	10 JUNE 2020			05 OCTOBER 2020

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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Investor Relations Contact

Martin Robert Schneider Sebastian Slania Christian Rottler Agnes Putri Ziegenbalg

[phone]	[phone]	[phone]	[phone]	[phone]
[e-mail]	[e-mail]	[e-mail]
[e-mail]	[e-mail]

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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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.

VIRTUAL MANAGEMENT ROADSHOW | MELANIE KREIS | 7 AUG 2020

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