Deutsche Post World Net lifts net income by 51 percent11/10/2005, 12:00 AM CET
- Chairman Zumwinkel: successful expansion in Germany and abroad
- Full-year earnings forecast confirmed
- 9-month revenue up 2.5 percent to 32.5 billion euros
- LOGISTICS records earnings surge in third quarter
Bonn, November 10, 2005: Deutsche Post World Net increased its profit from operating activities (EBIT) by 19.9 percent to around 2.4 billion euros in the first nine months. Revenue rose slightly by 2.5 percent to 32.5 billion euros compared with the first nine months of the previous year. Consolidated net income grew by 51 percent to around 1.3 billion euros, after 890 million euros in the previous year. Earnings per share increased accordingly from 0.80 to 1.20 euros. Third quarter consolidated net income more than doubled year-on-year, from 169 million to 405 million euros.
"We have consistently and successfully continued our global strategy and after completing the acquisition of Exel we will be the leading logistics provider worldwide," said Chairman of the Board and Chief Executive Officer Klaus Zumwinkel. In the first nine months, the company generated half its revenue outside Germany. Within Germany, the Group also made great progress. "With the acquisition of BHW, Postbank will be the clear number one in retail banking," said Zumwinkel.
"Our operating business has recorded encouraging overall growth, and we are confident that this trend will continue during the remaining months of this year," said Chief Financial Officer Edgar Ernst. He confirmed the full-year forecast for profit from operating activities (EBIT) of at least 3.6 billion euros.
Measures implemented under the STAR value creation program contributed 163 million euros to earnings in the third quarter. This is the highest quarterly contribution since the start of the program three years ago. Overall, the program, which is due to expire at the end of the year, has generated an accumulated figure of almost 1.3 billion euros. This should rise to at least 1.4 billion euros at the end of the year.
MAIL Corporate Division
The MAIL division increased its revenue slightly in the first nine months to around 9.4 billion euros. The expected decline in national revenue was more than offset by strong growth in the international mail business. In the first nine months of 2005, revenue in the international mail business rose by 17 percent to around 1.5 billion euros. This corresponds to 16 percent of the division's total revenue. EBIT in the MAIL division, at 1.5 billion euros in the period under review, was on a par with the high level of the previous year.
The ongoing weakness of the domestic German economy as expected held back the German mail business. Mail volumes fell by 3.8 percent in the first nine months. Conversely, the trend in the Direct Marketing business is increasingly positive: volumes rose by 2.9 percent in the third quarter. In the first nine months of 2005, the increase was 0.9 percent.
EXPRESS Corporate Division
In the first nine months, revenue in the EXPRESS division rose by 3.2 percent to 13.3 billion euros. EBIT amounted to 249 million euros. The positive trend for the Americas region is persisting with an increase in revenue of 4.3 percent. The EXPRESS subsidiary DHL perceptibly increased its service quality in the USA this year. The company is now working intensively to improve its product offerings and cost structures. EBIT for the Americas region amounted to -264 million euros in the first nine months, following 436 million euros for the prior-year period.
LOGISTICS Corporate Division
LOGISTICS (air and ocean freight and contract logistics) continued its positive development in the first nine months. Revenue increased by 15.6 percent to around 5.7 billion euros; in the third quarter alone the revenue growth amounted to 22.7 percent. Strong organic growth at both DHL Danzas Air & Ocean and DHL Solutions contributed to this increase. The company increased transport volumes and freight rates for both air and ocean freight. Revenue from contract logistics in the third quarter rose by 30.6 percent because of additional business with both new and existing customers.
Operating profit in the LOGISTICS division as a whole increased significantly by 79.7 percent in the first nine months, from 123 million to 221 million euros. Return on sales climbed from 2.5 percent in the previous year to the current level of 3.9 percent.
FINANCIAL SERVICES Corporate Division
The FINANCIAL SERVICES division includes Postbank, the Pension Service and the retail outlets. Postbank presented its results separately on November 9. The division generated income of around 5.4 billion euros in the first nine months, a decline of 2.2 percent. This was due to persistently low interest rates. EBIT rose by 16.4 percent to 581 million euros.
The company is reiterating its expectation of achieving operating profit for full-year 2005 of at least 3.6 billion euros. Consolidated net profit for 2005 should exceed the previous year's figure of around 1.6 billion euros by at least 500 million euros. Deutsche Post World Net therefore intends to increase its dividend for 2005 by at least one third.
Due to certain legal restrictions pertaining to its offer for the British logistics group Exel plc, the Group can only make limited forward-looking statements at the present time. Therefore, contrary to its normal practice, it is not publishing any segment-related forecasts today.
An interview with CFO Edgar Ernst (transcription and audio) is available from 8 a.m. at investors.dpwn.com