Background information on the IndEx program
In late 2007, Deutsche Post DHL introduced its comprehensive capital-markets program Roadmap to Value with the aim of increasing profitability at the Group and sustainably generating more cash from the business. The cost-cutting measures introduced as part of this program were intensified last November in the wake of the global economic crisis. The goal was to reduce indirect costs by 1 billion euros by the end of 2010 and to save this amount annually starting in 2011.
Today, slightly more than half a year later, the Group has made tremendous progress within the framework of the cost-cutting program IndEx (Indirect Functions Excellence). As a result, the original target will likely be reached in the second quarter of 2010. Particularly in the EXPRESS Corporate Division, the systematic implementation of a worldwide restructuring program has yielded significant savings. By the end of June, 552 million euros in annualized savings had been achieved throughout the Group. Of that amount, 139 million euros were reached in 2008. Administrative costs as well as travel, marketing and IT costs were all driven down as a result of the changes.
In specific terms, the goal is to sustainably reduce the around 7 billion euros in costs produced by so-called indirect functions such as IT, finance, HR and marketing. To achieve this, more than 400 initiatives have already been identified. For instance, the consolidation of global IT centers and the outsourcing of European telecommunications to Spanish telecommunications company Telefónica will help reduce annual IT costs amounting to 1.4 billion euros. In the area of marketing & sales - with an original cost base of 2.2 billion euros - various steps have been taken to optimize sales structures.
At 460 million euros, the EXPRESS Corporate Division is responsible for the lion's share of savings. The MAIL Corporate Division plans to save 180 million euros annually starting in mid-2010. The GLOBAL FORWARDING, FREIGHT Corporate Division is aiming to save 160 million euros. With its contract logistics business, the SUPPLY CHAIN Corporate Division will contribute an additional 130 million euros to the IndEx program. The final 70 million euros is to be saved at the Corporate Center.