**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
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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
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
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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
Mail
Parcel
53%
BERENBERG VIRTUAL EUROPEAN CONFERENCE | TIM SCHARWATH | 1 DECEMBER 2020
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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
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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
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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
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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
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
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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
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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
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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)
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 includeswarehousing, transportation as well as key solutions like LLP*, Service Logistics, packaging and e-commerce
We lead ininnovation 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 onlong- 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
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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 ande-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
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DHL Supply Chain's digitalization agenda embraces all areas
CUSTOMER
OPERATIONSAccelerated 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
customers withSupporting Robots analytics
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
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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 onB2C only but also on B2B across all verticals
thetesting 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
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
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
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