2008 - What's ahead
The year 2008 will start with a profound change: On January 1, Germany will fully liberalize the mail delivery market - three years earlier than required by EU regulation. With this final step, the exclusive licence for letters of up to 50 grams will expire and this market segment will also be open for competition. Deutsche Post World Net is well prepared to deal with this change. First, the market liberalization will only be relevant for one third - approximately 5 billion euros - of total MAIL revenues. Second, recent decisions by various authorities have created much more certainty with regard to the liberalized market environment.
According to official statements by the Federal Finance Ministry, Deutsche Post World Net like any other provider of the universal postal service will be granted a VAT exemption for that business segment. That means no change of the Group's present VAT position. The minimum wage taking effect at the start of next year will prevent mail delivery firms from trying to acquire market share on the back of dumping wages for their employees. And the new pricing regime will make profitable volume protection easier for the Group. Third, the Group would be able to decrease costs fast through flexibility built up over the past two years.
For 2008, Deutsche Post World Net therefore expects the MAIL division with 1.9 billion euros to be yet again the single largest contributor to the Group's overall EBIT target of 4.2 billion euros, which was given on Nov. 8. In addition, the EXPRESS and LOGISTICS divisions will continue on their growth path: EXPRESS expects an EBIT of around 650 million euros for the year and LOGISTICS 1.05 billion euros. And the FINANCIAL SERVICES division, consisting mainly of Deutsche Postbank, expects an increase in EBIT to at least 1.15 billion euros.
2008 will also see an important milestone for DHL: With the change of the flight schedule at the end of March, the new European hub at Leipzig/Halle airport will fully start operations. The airport allows for year-round 24-hour flight operations and will be Deutsche Post World Net's third major global hub, in addition to Wilmington and Hong Kong. The hub will also be the headquarters of the new joint cargo carrier of DPWN and Lufthansa, which is scheduled to start operations in 2009.
Overall, Deutsche Post World Net will continue to pursue its strategy of organic growth. A major focus will be the implementation of the Roadmap to Value, the new capital markets program presented in November 2007. The Group will also continue to roll out its FIRST CHOICE initiative, aimed at making Deutsche Post World Net the No.1 choice for customers and employees worldwide. 2008 it will also be a year in which the Group will sharpen its focus on innovation and sustainable solutions.
With the opening of the DHL Innovation Center in spring 2007, Deutsche Post World Net has laid the foundation to develop innovative and environmentally-friendly solutions. With its Go-Green products and services, Deutsche Post World Net has had a head start as it is the first company to offer customers the option to ship their packages and parcels in a carbon-neutral way.