BERENBERG VIRTUAL EUROPEAN CONFERENCE
Tim Scharwath, CEO DHL Global Forwarding, Freight December 1st, 2020
Content
DPDHL Group Highlights
Page 3
Strategy 2025
Page 13
Divisional Deep-Dives
P&P (page 20), DHL Express (page 25), DGFF (page 33), DSC (page 40), DeCS (page 48)
Financial Backup
Page 52
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
Content
DPDHL Group Highlights
Page 3
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 3 |
GROUP REVENUE, Q3 2020
€16,244m yoy: +€692m (+4.4%)
+622 | |||||||||||
+14.6% | |||||||||||
Divisional | +252 | ||||||||||
+125 | +26.1% | ||||||||||
revenue | +36 | ||||||||||
+3.4% | |||||||||||
growth yoy | |||||||||||
+1.0% | -8.6% | ||||||||||
in €m | |||||||||||
-290 | |||||||||||
P&P Germany | DHL Express | DHL Global | DHL Supply Chain | DHL eCommerce | |||||||
Forwarding, Freight | Solutions | ||||||||||
Organic Growth | |||||||||||
Group: +9.0% | +3.4% | +21.2% | +5.2% | -1.9% | +31.2% | ||||||
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 4 |
GROUP EBIT, Q3 2020
€1,377m yoy: +€435m (+46.2%)
in €m
P&P Germany
320
+5.3%
2019: €304m
EBIT increase mainly driven by e-commerce related parcel growth, cost containment and yield measures
EBIT includes €-42mone-time payment (as part of multi-year wage agreement) & €-51m special bonus
DHL Express
753
+65.9%
2019: €454m
All major regions back to growth, reflecting continued B2C strength and B2B recovery
Well-balanced growth allowed highly efficient network utilization and profitability
EBIT includes €-33m special bonus
DGFF
155
+25.0%
2019: €124m
Air Freight GP remains strong due to tight market, although less
pronounced vs Q2
GP-EBIT conversion supported by strong cost focus
EBIT includes €-13m
special bonus
DSC
111
-31.5%
2019: €162m
EBIT recovering from Q2 as customer sites gradually ramp back up
EBIT includes €-52m special bonus
2019 One-offs: €-8m net impact from restructuring
DeCS
76
>100%
2019: €6m
Significant e-commerce growth led to higher network utilization and profitability across international parcel portfolio.
EBIT includes €-10m special bonus
2019 One-offs: €-4m restructuring
Corp. Func. / Cons.
-38
+64.8%
2019: €-108m
StreetScooter
Q3 2020: €18m incl. €42m revaluation impact. Q3 2019: €-23m
EBIT includes €-4m special bonus
2019 One-offs: €+16m pension revaluation, €-6m restructuring
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
5
2020 performance shows benefit of diversified Group structure, e-commerce focus & ongoing self-help benefit
High
Growth
Low
Strong
E-commerce
related*
Strong
E-
DHL
Supply
Chain
Post
EBIT Margin
12-months rolling
B2B | 10,0% |
Express |
8,0%
DGFF
5,3%
3,3%
2,4%
12,8% Express
9,0% P&P
6,4% GROUP
3,8% DGFF 3,6% DSC
1,6% DeCS
LowExposure to GDPHighQ3 2014-0,7%
(Q4 2018)
9M 2020 revenues | |
*B2C Express, Parcel Germany and DHL eCommerce Solutions | EBIT Margin: DSC adjusted for 2019 one-offs, DGFF for NFE write-down in 2015 |
Until 2017: P&P values includes business activities which are now under DeCS | |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
Q3 2020
6
Strong balance sheet and liquidity position
1.7x
Net Debt / EBITDA
(31.12.2019)
Leases | 10,301 | 7.812 | |
Related to multi- year commitment on operating assets
3,066
in €m
Net Debt | EBITDA |
LIQUIDITY
No financial covenants on bonds and syndicated credit facility
€4.3bn | €2.0bn | >€1.3bn | ||||||||||||
Cash & cash | Syndicated credit facility | Bilateral credit | ||||||||||||
equivalents (30.09.20) | runs until 2025 (undrawn) | lines (undrawn) | ||||||||||||
Maturity Profile, Senior Bonds | ||||||||||||||
Average time to maturity 5.4 years | ||||||||||||||
€m | ||||||||||||||
€300m | ||||||||||||||
Rest of Year 2020 | 750 | |||||||||||||
maturities | ||||||||||||||
on financial | ||||||||||||||
liabilities | 300 | 750 | 500 | 500 | 700 | 0 | 500 | 500 | 750 | 750 | 0 | 0 | 750 | |
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
New bonds issued on May 13th 2020
Coupons: 0.375% (6-year), 0.75% (9-year), 1% (12-year)
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 7 |
Shareholder Returns defined by Finance Policy; 2020 dividend continuity assured
Dividend of €1.15 paid 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% | 55% | 55% | ||||||||||
49% | 50% | 46% | 48% | 52% | ||||||||||
40% | ||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
Underlying Payout Ratio 1)
Dividend payment of €1.4bn to DPDHL shareholders approved at AGM on Aug 27th - paid on Sep 1st.
1) Adjusted for non-recurring items when applicable
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
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 8 |
2020 EBIT Guidance - unchanged as updated on Oct 7th 2020 FCF guidance increased to >€2.0bn
in € bn
EBIT | 2020 |
Group | 4.1-4.4 |
P&P | ~1.5 |
DHL | 3.3-3.6 |
Corp. Functions | ~-0.7 |
Reported EBIT includes:
- €-262mrelated to special bonus payment (Q3, €-163m) & asset impairments (Q2, €-99m)
- One-timecosts related to non-core business (StreetScooter, ~ €-350m)
2020 | |
FCF | >2.0 (from >1.8) |
Gross Capex | ~2.9 |
(excl. leases) | |
Tax Rate | 22-24% |
FCF and Capex guidance includes ~ €300m Express intercontinental fleet renewal (B777) and €-163mone-time bonus payment
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 9 |
2020 Guidance: What is factored in
GROUP EBIT guidance: €4.1-4.4bn,including | ||||
- €-99m asset impairments (Q2 2020) | ||||
- €-163mone-time bonus payment (Q3 2020) | ||||
- ~ €-350m StreetScooter | ||||
4,712-5,012 | ||||
-262 | 4,100-4,400 | |||
4.128 | 4.048 | +664-964 | -350 | |
-80 | +16-24% | |||
growth |
FY 2019 | 2019 One-offs& 2019 excl. One-offs | 2020e Operating | 2020e excl. | 2020e | 2020e | FY 2020e | |
Reported EBIT | StreetScooter* | & StreetScooter | Performance | One-offs & | One-offs** | StreetScooter | Reported EBIT |
StreetScooter |
*2019 One-offs: €+426m DSC China disposal, €-151m DSC restructuring costs, €-80m DeCS restructuring costs, €-115m StreetScooter
**2020 One-offs:€-163m special bonus payment (Q3); €-99m asset impairments triggered by lockdown (Q2)
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 10 |
2022 Guidance: Confirmed as updated on July 7th, 2020
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 |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 11 |
Deutsche Post DHL Group
Investment Case Summary
EARNINGS | CASH FLOW | SHAREHOLDERS' | ||
RETURN | ||||
Sustainable growth from | Continued investments for | |||
diversified global market | Long-term Finance Policy | |||
profitable growth | ||||
leader | defining sustainable | |||
Strong balance sheet and | ||||
Clear agenda for | shareholder returns | |||
cash generation | ||||
improving profitability | ||||
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 12 |
Content
Strategy 2025
Page 13
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 13 |
STRATEGY 2025: OUR POWERFUL
COMPASS WILL NAVIGATE US THROUGH ANY SCENARIO
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 14 |
2019 summary: Significant progress along all 3 bottom lines, as well as on sustainability targets
EMPLOYER OF CHOICE | PROVIDER OF CHOICE | |||
Employee Engagement at record | Ensuring continuous operations to keep | |||
level: Group score at 82 (2019: 77) | customer supply chains running | |||
Supporting customers across sectors in | ||||
ramping up their e-commerce capabilities | ||||
DHL Express | ||||
#2 World's Best Workplaces 2020 | ||||
INVESTMENT OF CHOICE
On track to achieve record Group EBIT with guidance of €4.1bn-€4.4bn
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 15 |
Broad range of e-commerce offerings across the Group
Domestic delivery
Germany
P&P Germany
Cross-Border delivery | ||||
International | Deferred | Premium TDI | ||
DHL eCommerce Solutions | DHL Express | |||
>40%
Parcel Market Share
>5m
Parcels per day (2019)
>100k
Parcel Business customers
>6,000
Parcel Lockers
* On-Demand-Delivery
11 | Focus |
Countries with own domestic | Non-TDIcross-border |
delivery to/from and within | |
parcel delivery, t/o 7 in Europe | |
Europe | |
(UK, NL, SE, PL, CZ, ES, PT) | |
~4m | European |
destinations served through | |
Domestic parcels per day | |
Parcel Connect platform - via | |
own delivery and partners | |
eFulfillment
DHL Supply Chain
~50% | ~30k |
Growth in eCommerce new | Employees active in eCommerce |
business signings | operations globally |
~1m
TDI shipments/Day
40%+
Express B2C Share
220+
countries & territories served with pick-
up and delivery
ODD*
B2C-adapted recipient tool
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 16 |
What does it take to deliver 10bn vaccine doses worldwide?
Starting from Q4 2020 vaccines for emergency use are expected to be shipped around the globe; Emerging actors like governments and NGOs face similar challenges in orchestrating vaccine distribution as for PPE - yet the stakes are even higher.
10+ bn
7.8 bn
~70%
~1.8
vaccines needed | 200,000 |
Movements by pallet | |
shippers | |
global population | 15,000,000 |
Deliveries in cooling boxes
immunization in population to achieve herd immunity
15,000
avg. doses/person needed for | Flights |
immunization | |
Download the White Paper | |
Source: World Bank; DHL; McKinsey
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 17 |
DIGITALIZATION @DPDHL GROUP
As seen at IR Virtual Tutorial…
DGF myDHLi | DSC Accelerated Digitalization | Data Analytics |
Operational | Routing | Product Classification |
Volume Prediction | Optimization | for Customs |
Staff Scheduling | Geocoding | Invoice | ||||||
Overdue Risk | ||||||||
Further ongoing initiatives | ||||||||
Packstation expansion: 7000 by 2021 | Postal mail notification | Parcel delivery: 15min notification & live tracking | Mobile stamps |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 18 |
Content
Divisional Deep-Dives
P&P (page 20), DHL Express (page 25), DGFF (page 33), DSC (page 40), DeCS (page 48)
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 19 |
P&P Germany: THE Post and Parcel company for Germany
The Profitable Core
Transporting, sorting and delivering documents and goods-carrying shipments in Germany and export.
Revenue Mix | Market Position | |||
(%, FY 2019) | (2019) | |||
Parcel | ~62% Market Share for Mail | |||
32% | (business customers) | |||
>40% Market Share for | ||||
Parcel | ||||
53% | ||||
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 20 |
P&P Germany: Parcel growth and yield measures continued to offset mail volume decline
Q3 2020 | Volume | Revenue | |
yoy | |||
Mail Communication | -5.6% | -2.4% | |
Dialogue Marketing | -12.5% | -12.3% | |
Parcel Germany | +11.6% | +17.1% |
- Mail volumes slowly recovering from Q2 decline but still below normal trend at -9.4% yoy in Q3 (from -16.8% yoy in Q2)
- Parcel growth remains well above trend as our network supports accelerated e-commerce growth across all customer segments in Germany
- Revenue development continued to be supported by yield measures in mail and parcel
Parcel Germany revenue growth
by business customer segment (Q3 2020, yoy)
Top accounts (~320 customers)
+8%
Middle accounts (~16,000 customers)
+24%
Small accounts (~83,000 customers)
+32%
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 21 |
P&P Germany: Products and Pricing
P&P revenue
FY19: €15.5bn
Mail Communication €5.3bn
Dialogue Marketing €2.1bn
International €2.2bn
Other €0.9bn
Parcel Germany €4.8bn
Ex-anteproducts - private customers
Partial services - business customers
Addressed and undressed advertisement mailings, campaigns (both digital & physical)
In- and outbound Germany shipments
Press, pension services, retail
Top accounts (~330 customers)
Business
customers Middle accounts (~18k customers) Small accounts (~85k customers)
Private customers
Pricing
Jul 2019: 10.6% increase for 2019-2021 period (incl. international)
2019: No increase, 2020: 3-4% through reduction of discounts
Partially increased in 2019-2020
Depends on the product category: Partially increased in 2019-2020
Partially increased in 2019-2020
Pricing varies by contracts.
Stronger price increase than historically.
Next increase: January 1st 2021.
Listed prices in retail outlets and online
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 22 |
P&P Germany: Update on wage agreement
On September 23rd, we reached an agreement with the labor union, providing 2+ years visibility for business planning and ~140,000 Deutsche Post tariff employees in Germany
Wage increase
3% increase from Jan 2021. 2% increase from Jan 2022
Additional one-time payment
Overall €42m EBIT impact on P&P Germany booked in September
Contract period
September 1st 2020 until December 31st 2022
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 23 |
EBIT 2020
Guidance: €1.5bn
P&P GERMANY FINANCIAL OUTLOOK
Mid-term: Slow topline growth. Stable EBIT margin at ~10%
Structural trend:
Mail: -2% to -3% p.a.
Volume Parcel: +5% to +7% p.a.
Stronger Parcel growth and Mail decline seen in 2020. Expect growth rates to trend back to initial assumptions over time
Capex: €500-600m p.a. for 2020e-22e
Wage increase for tariff employees: 3% from Jan 1st 2021 and 2% from Jan 1st 2022.
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 24 |
DHL Express: Experts in Export and Import
The Profitable Core | Revenue Mix1) | ||||||||
(€bn, FY 2019) | |||||||||
Time Definite International | |||||||||
TDI | 77% | ||||||||
(TDI) service for premium, | |||||||||
cross-border delivery of | DDI & TDD | 10% | |||||||
time-critical parcels and | |||||||||
documents | ACS & Others | 13% | |||||||
1) TDI: Time-Definite International, DDI: Day-Definite International,
TDD: Time-Definite Domestic, ACS: Air Capacity Sales & Other
Products & Services
Global TDI market 2)
(2016)
Others
In 2014: 10%
11,0%
UPS | DHL |
38,0% In 2014: 35% | |
In 2014: 23% 22,0% | |
FedEx | 29,0% |
In 2014: 32% | |
(26% FedEx/6% TNT) | 24% FedEx / |
5% TNT |
- Source: Market Intelligence 2017, annual reports
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 25 |
Express TDI shipments per day in major regions, yoy growth
Q3 showed solid growth across major regions…
Q3 2020 | ||
24,7% | ||
18,6% | ||
11,2% | ||
Asia Pacific | Europe | Americas |
Q32020 |
Global: +15.8%
…vs. unbalanced regional development in H1
Q1 2020 | ||
8,3% | ||
Global | ||
+0.6% | ||
1,5% | ||
-0,8% | Q12020 | |
Asia Pacific | Americas | |
Europe | ||
Q2 2020 | ||
8,9% | ||
Global | ||
-0.2% | ||
-3,2% | -2,7% | |
Asia Pacific | Europe | Americas |
Q2 2020 |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 26 |
Express TDI volume growth, quarterly growth ranking
#1 | EU | AM | AM | EU | EU | MEA | MEA | MEA | AM | EU | MEA | EU | MEA | EU | EU | AM | AM | AP | AM |
#2 | AM | EU | EU | AM | MEA | EU | AM | AM | MEA | MEA | EU | AM | EU | MEA | AM | EU | EU | AM | MEA |
#3 | AP | AP | MEA | MEA | AM | AM | EU | EU | EU | AM | AP | AP | AP | AM | AP | AP | AP | EU | AP |
#4 | MEA | MEA | AP | AP | AP | AP | AP | AP | AP | AP | AM | MEA | AM | AP | MEA | MEA | MEA | MEA | EU |
763 | 820 | 770 | 880 | 825 | 890 | 863 | 978 | 904 | 964 | 908 | 1.044 | 949 | 1.027 | 962 | 1.100 | 955 | 1.025 | 1.114 |
Q3 yoy: +15.8%
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||
FY 2016: +7.6% | FY 2017: +9.9% | FY 2018: +7.5% | FY 2019: +5.7% | 9M 2020: +5.5% |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 27 |
E-commerce is a profitable growth driver for DHL Express
2013 | 2019 | Q3 2020 | |
B2C | 30% | 45%+ | |
volume | 10% | ||
Share
EBIT | 9% | 12% | 15.5% |
margin | |||
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER
Network | B2C | Profitability |
Characteristics | Characteristics | Impact |
Shipments | Volume growth drives better | |
per Day | utilization of existing network | |
Weight per | Lower weight per shipment | |
Shipment | ||
Revenue | Higher RpK related to lower WpS | |
per Kilo | ||
First mile | More pieces per stop at pickup | |
Hub sort | Better utilization of existing | |
infrastructure, with high degree | ||
Airlift | Better utilization of existing capacity, | |
with lower WpS being advantageous | ||
Optimize residential delivery via On | ||
Last Mile | Demand Delivery & Drop Off Locations | |
and increased delivery density due to | ||
B2C Growth
Express e-commerce growth driven by B2C acceleration in many industries
Volume growth TDI, YTD SEPTEMBER 2020
+47%
+30% | ||||||||||||||||||||||
+37% | ||||||||||||||||||||||
+47% | ||||||||||||||||||||||
+32% | -12% | |||||||||||||||||||||
+46% | ||||||||||||||||||||||
Retail | Fashion | Consumables Technology | Services | Finance | Life Science & | |||||||||||||||||
Healthcare | ||||||||||||||||||||||
B2B TDI revenue share | B2C/e-commerce TDI revenue share | X% B2C YoY TDI revenue growth | ||||||||||||||||||||
EXAMPLE
PRODUCTS &
CUSTOMERS
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
B2C e-commerce is managed by DHL Express as another TDI vertical and has actually become its fastest growing vertical
B2C remains a profitable growth driver through
disciplined focus on premium cross-border flows and yield measures
Structural acceleration in 2020 has further enlarged
the scope of industries and customers using DHL
Express for international e-commerce
29
To serve its Global network,
DHL Express runs more than just an airline
1 VIRTUAL GLOBAL AIRLINE
- 17 own and partner airlines
- More than 260 dedicated aircraft
- Over 300 Commercial Air carriers
- 2,500 daily flights
Dedicated fleet (w/o feeders)
2010: ~150 planes | 2019: >200 planes |
Owned | Lease | |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 30 |
Our Global Aviation Network
Snapshot of DHL network flights on 2nd September 2020
Intercon Network
Regional Networks
• more than 260 dedicated aircraft
• more than 700 daily network flights
> 40 Intercontinental | | • more than 27 k tons capacity / day |
> 60 North America > 20 Latin America | > 100 Europe | > 20 Middle East & Africa > 20 Asia Pacific |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 31 |
EXPRESS FINANCIAL OUTLOOK
Continued growth of absolute EBIT
Continued, but more incremental margin expansion
TDI | Structural trend: +4% to +5%. |
Volume | Volatile in 2020. Expect growth rates to |
Growth | trend back to initial assumptions over |
time | |
Excl. current replacement order for Boeing 777s, Capex flat of ~€1bn.
B777 Capex: €180m (2018); €1.1bn (2019), ~€300m (2020e), <€300m (2021e)
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 32 |
DGFF: The foundation for further success has been laid
The Profitable Core
International transportation of Air Freight, Ocean Freight and Road Freight including Customs Clearance and related Value-added Services like warehousing, cargo insurance, etc.
Revenue Mix
(€bn, FY 2019)
4.9 | Air | ||||
4.4 | Road | ||||
3.5 | Ocean | ||||
2.2 | Other |
Market Position
(2019)
#1 #2
Air Freight Ocean Freight
#2
European Road Freight
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 33 |
DGFF: Strong GP/unit and cost containment basis for strong Q3 development
Q3 2020 | Air Freight | Ocean Freight |
yoy | (AFR) | (OFR) |
Volumes | -12.9% | -10.5% |
Gross Profit | +8.8% | +3.6% |
GP/EXP t ; GP/TEU | +25.0% | +15.8% |
- Volume development remains weak reflecting overall GDP and trade uncertainties
- AFR gross profit continued to be well supported by tight market situation - focus on profitability drove GP increase in OFR through higher GP/TEU
- Internal improvement process ongoing - independent of market movements, setting basis for structural GP-to-EBIT conversion increase which is in-line with Strategy 2025 targets
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 34 |
DGFF - Emerging new rivals do not pose imminent risk of disruption
Digital Capabilities
Digital Forwarders
Gaps to close | ? |
- Back-endIT infrastructure
- Own setup (physical) globally
- Operational expertise
- Global sales force
- Carrier relationships
Incumbents
Gaps to close
- Modern, fully-integrated IT infrastructure
- Digital customer interaction tools
Global network
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 35 |
The lifecycle of a shipment is a complex process and technology investments are key to success
Quotation
process
Goods
to be shipped
Digital
analytic
tools
Billing
& payments
Take control | Create documents | |||
Plan route | of goods from | Manage transport | ||
for export compliance | ||||
& organize | Customer | & customs | to port/airport | Consolidation |
shipment | ||||
App-based | IT System | ||||
App-based | |||||
Online | tracking tools | Upgrades | |||
tracking tools | |||||
Quotation | |||||
Tools
IT System | App-based | |
Upgrades | IT System | |
tracking tools | ||
Upgrades
Transport to warehouse
or final destination
Manage loading & export process
Real-time
tracking platform
Accept delivery at port/airport
Ensure goods are shipped
Ensure
shipment
stays on track
Manage documents for import compliance & customs process
Step in the lifecycle of a shipment
System or technology support
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 36 |
CargoWise1 Roll-out progressing very well
Benefit realization started
Ocean Freight | Air Freight |
considered >70%
completed completed
Complete CargoWise1 roll-out by 2021
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 37 |
With IRR & Digital Customer Interaction DGF is enhancing customer experience while increasing operational efficiency
myDHLi | 360° VISIBILITY | COLLABORATION | FULL ACCESS | MANAGED BY CUSTOMER |
External
QUOTE + BOOK | TRACK | DOCUMENTS | ANALYTICS |
IT Renewal Roadmap (IRR): Our Digital Backbone established
Internal
New TMS | Paperless | Quotation | Track + trace / shipment | Steering Logic | … and many more |
forwarding | tool | visibility |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 38 |
DGFF FINANCIAL OUTLOOK
EBIT/GP Conversion improvement of 100-200 bps p.a. (with basis from 2018)
Long-term target: 30% DGF conversion. 5-6% DGFF
EBIT Margin
Initial* market growth assumptions (2018-25):Air Freight +1-3%
Ocean Freight: +2-4%
Road Freight: +3-4%
Market significant down in 2020. Return to initial assumption depending on recovery shape beyond 2020.
Capex: Flat / slightly increasing from FY 2018 levels (€110m)
Complete CargoWise1 roll-out by 2021. Ocean Freight considered completed. Air Freight >70% completed.
*as introduced at Capital Markets Day in 2019 | 39 |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 |
DHL Supply Chain: Business Overview
The Profitable Core
- We manage supply chains to reduce complexity for our customers.
- Our profitable core includes warehousing, transportation as well as key solutions like LLP*, Service Logistics, packaging and e-commerce
- We lead in innovation and sustainable solutions
Revenue Mix
(%, FY 2019) | |
Retail | |
29% | |
Consumer | 24% |
Auto-mobility | 15% |
Technology | 14% |
Life Sciences | 9% |
& Healthcare | |
E&M* | 6% |
Other | 3% |
Key Facts
- World No.1 in contract logistics with 6 % of market share
- Strong customer base built on long- lasting partnerships in more than 50 countries with >156,000 employees and ~2,000 sites globally
*E&M: Engineering & Manufacturing
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 40 |
DHL Supply Chain: Solutions Overview
Offering Customized Solutions Across the Entire Supply Chain | Revenue by Service Area |
FY 2019 |
WarehousingTransportation
37%
56%
7%
Value Added
Services
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 41 |
DHL Supply Chain: Improved dynamics in customer activities
DSC sectors with the strongest recovery vs. Q2
Q2 2020 Revenue growth yoy | Q3 2020 Revenue growth yoy | ||
-8,6%
-16,6%
DHL Supply Chain | Auto-mobility | Engineering & | Retail |
Manufacturing | |||
DSC business activity and volumes recovering from Q2 but some volume impact in selected sectors remains
- Business activity is recovering as operations, which were closed due to government or customer restrictions, are re- opened; volumes recover on most sites
- DSC revenue and EBIT development recovering from Q2, however revenue is still impacted by weakness mainly in Auto-mobility sector
- DSC organic growth recovering to -1.9% in Q3 (from -13.1% in Q2), reflecting improved trading dynamics
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 42 |
DHL Supply Chain is uniquely positioned to cater for e-commerce growth
We manage supply chains to reduce complexity for our customers
Our profitable core is:
- warehousing, transportation
- LLP, Service Logistics, packaging and e-commerce
We lead in innovation and sustainable solutions
38% of new retail business is e-commerce and we are growing at a double digit rate
Pure e-commerce for brand manufacturers
Pure e-commerce retailers/ etailers, marketplaces
Omni-channel centralized and
combined B2C/ B2B fulfillment
Regional fulfillment networks across
multi user locations
… using state-of-the-art technologies
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 43 |
#ExecutionEdge: Standardization is key to success - DSC leverages a holistic Management System
Operations Management System First Choice (OMS FC)
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 44 |
DHL Supply Chain's digitalization agenda embraces all areas
CUSTOMER | OPERATIONS Accelerated Digitalization of key technologies and optimized asset utilization through predictive analytics | |||
SUPPLYCHAIN | Receiving/ Put-away Storage | Picking | Packing | Dispatch/ Delivery |
ANALYTICS | ||||
SUPPORT FUNCTIONS
Enable analytics &
Delight our
Intelligent Process Automation
optimize business
SmartOperations
Indoor Robotic | Inventory | Assisted | Wearable | Goods-To- | Robotic | Wrapping | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mgmt. | Picking | Person | Asset Tracking & | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transport | Devices | Arms | Robots | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robots | Robots | Robots | Monitoring | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Optimization | Asset Tracking & Monitoring | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
of inventory | Algorithmic Optimization | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
management | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Network | Volume | Inventory | Dynamic Task | Walking Distance | Opti-Carton | Estimated Time of |
Planning | Forecast | Optimization | Optimization | Optimization | Analysis | Arrival (ETA) Prediction |
support
IT
Predictive IT maintenance
Finance
Predictive cash flow optimization
HR
Increase staff engagement & retention
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 45 |
DSC has defined 12 focus technologies to accelerate deployment
Assisted Picking Robots | Goods-To-Person Robots | Wrapping Robots | Indoor Robotic Transport | Inventory Mgmt. Robots | Robotic Arms | ||||||||||
SmartOperations | Wearable Devices | Intelligent Process | Algorithmic Optimization | Supporting Robots | Asset Tracking and | |||||
Automation | Monitoring | |||||||||
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 46 |
DSC FINANCIAL OUTLOOK
Maintain EBIT margin at ~5%
Initial* market growth assumptions (2018-25):Revenue growth of ~4% p.a
Distorted in 2020. Return to initial assumption depending on recovery shape beyond 2020
Capex outlook: Slightly increasing from FY 2018 levels (€282m) driven by new business wins
*as introduced at Capital Markets Day in 2019 | 47 |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 |
DHL eCommerce Solutions: Business Overview
Going forward we focus on domestic and non-time-definite international parcel delivery - especially within Europe
The Profitable Core
Domestic last mile parcel delivery in selected countries outside of Germany (Europe, USA and selected Asian emerging markets)
Non-TDIcross-border services primarily to/from and within Europe.
Revenue Mix
(€bn, FY 2019)
14% Asia
29% Americas
57% Europe
We are not
- driving a group-widee-commerce logistics global strategy
- focusing on B2C only but also on B2B across all verticals
- the testing environment anymore (e.g. eFulfillment or Parcel Metro)
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 48 |
DHL eCommerce Solutions: Focus on two value streams
Domestic last mile delivery
- High quality delivery in own and partner-networks
- Healthy mix of B2C and B2B across all verticals
- Strong focus on yield and profitability
Non-TDIcross-border
- Strong growth in cross border retail
- Changing expectations on speed, visibility & quality
-
Primary focus to/from and intra
Europe - Parcel Connect in Europe a strong and growing platform
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 49 |
DHL eCommerce Solutions
Q3 2020 Revenue Growth, yoy
>30% >40%
Q3 2020
Revenue Growth, yoy
NETHERLANDS | UNITED KINGDOM* |
+26% | >50% | >30% | |
UNITED STATES | SOUTH EAST ASIA | ||
*excl. Mail business | 50 |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 |
DeCS
FINANCIAL OUTLOOK
Positive EBIT contribution in 2020 (9M 2020: €76m)
Mid-term:5-10%sales growth with gradual margin expansion towards 5% long-termmargin across all businesses
Average Capex spend of ~€200m p.a. over 2019- 2022
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 51 |
Content
Financial Backup
Page 52
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
DPDHL Group at a glance
DHL Global | DHL Supply Chain | DHL eCommerce | |||||||||||
GROUP | P&P Germany | DHL Express | Forwarding, | ||||||||||
Solutions | |||||||||||||
FY 2019 | Freight | ||||||||||||
€63,341m | €15,484m | €17,101m | €15,128m | €13,436m | |||||||||
Revenue | €4,045m | ||||||||||||
EBIT | €4,128m | €1,230m | €2,039m | €521m | €912m | €-51m | |||||||
EBIT Margin | 6.5% | 7.9% | 11.9% | 3.4% | 4.7%* | ||||||||
FTEs | 499,461 | 159,100 | 96,850 | 44,265 | 155,791 | 30,797 | |||||||
Network business | Network business | Brokerage - | Outsource - | Network business | |||||||||
- asset intensive | - asset intensive | asset light | asset light | - asset intensive | |||||||||
*adjusted for one-offs
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 53 |
Q3 2020 Group P&L
in €m | Q3 2019 | Q3 2020 | vs. LY |
Revenue | 15,552 | 16,244 | +4.4% |
EBIT | 942 | 1,377 | +46.2% |
Financial result | -173 | -183 | -5.8% |
Taxes | -169 | -286 | -69.2% |
Consolidated net profit* | 561 | 851 | +51.7% |
EPS (in €) | 0.45 | 0.69 | +53.3% |
*after minority interest
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 54 |
Q3 2020 Cash Flow Statement
in €m | Q3 2019 | Q3 2020 | vs. LY |
EBIT | 942 | 1,377 | +435 |
Depreciation/amortization | 917 | 902 | -15 |
Change in provisions | -336 | -69 | +267 |
Income taxes paid | -183 | -231 | -48 |
Other | 74 | -39 | -113 |
Changes in Working Capital | 455 | 445 | -10 |
OCF | 1,869 | 2,385 | +516 |
Net Capex | -801 | -565 | +236 |
Net cash for leases | -571 | -557 | +14 |
Net M&A | 16 | 0 | -16 |
Net interest | -6 | 1 | +7 |
Free Cash Flow | 507 | 1,264 | +757 |
FCF (excl. B777 payments) | 752 | 1,280 | +528 |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
incl. B777 payments:
€16m in 2020; €245m in 2019
55
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 | 4.1-4.4 | EBIT guidance. 2020: €4.1-4.4bn; 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 |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 56 |
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 | >2.0 | Significant improvement in line with 2022 target | |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 57 |
Peaked Capex in 2019 due to B777 order - back to normal levels thereafter
in € m
1.747
3,617 | |||||
1.100 | ~2,900 | B777 order | |||
2,828 | Group Capex excl. B777 | ||||
180 | ~300 | <300 |
2.268
2.024 2.074
1.876
2.648 2.517
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020e | 2021e | 2022e |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 58 |
Balance sheet continues to show healthy leverage ratios
48.2% | 27.6% | 1.9x (2018) | 1.7x (2019) | 5.9x | ||
Net Gearing | Equity Ratio | Net Debt / EBITDA | Interest Cover | |||
All figures in €m, FY 2019 | ||||
52,169 | 13.367 | |||
Pension Provisions | ||||
Other Provisions | ||||
Current liabilities | 7.812 | |||
Non-current liabilities | 4.128 | |||
Equity | 698 | |||
Total Equity | Net Debt | EBITDA | EBIT | Interest Expense |
- Liabilities 31.12.2019
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 59 |
DPDHL Group Pensions - DBO and DCO plans
in €m
DBO
Defined Benefits
Staff Costs & Change in Provisions
Defined Contribution (Cash out = staff costs in EBIT)
Civil Servants in Germany | Hourly workers & salaried employees* |
*mainly outside Germany
5.2345.405
13.22213.308
163 | 193 | 162 | 187 |
193
218
268 264 266 230
168
83
531 | 516 | 493 |
461 449
409
276
317 305 300 307
347
Jun 30th 2020 | Sep 30th 2020 | ||
Plan Assets | Net Pension Provision | ||
2014 2015 2016 2017 2018 2019
Current service costs Change in provisions
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
Discount Rate | Germany | UK | Other | Total Average |
Jun 30th 2020 | 1.50% | 1.40% | 1.50% | 1.47% |
Sep 30th 2020 | 1.30% | 1.40% | 1.41% | 1.35% |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 60 |
Investor Relations Contact
Martin Ziegenbalg | Robert Schneider | Sebastian Slania | Agnes Putri |
+49 228 182 63000 | +49 228 182 63201 | +49 228 182 63203 | +49 228 182 63207 |
m.ziegenbalg@dpdhl.com | robert.schneider1@dpdhl.com | sebastian.slania@dpdhl.com | a.putri@dpdhl.com |
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 61 |
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.
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020 | 62 |
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Deutsche Post AG published this content on 24 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2020 08:40:04 UTC