Deutsche Post World Net revenue rises above EUR40 billion for the first time - Earnings higher than expected - Dividend up 10 percent
Value creation program STAR exceeds targets / Forecast for 2004: Earnings (EBITA) to rise by 5-10 percentBonn, 03/09/2004, 10:30 AM CET
In 2003 Deutsche Post World Net continued its successful course in what was a challenging economic environment. For the first time in company history revenue exceeded EUR40 billion (EUR40.02 billion), an 1.9 percent increase compared with the previous year. Profit from operating activities (EBITA) increased slightly from the year before (+0.2 percent) to EUR2.98 billion.
Consolidated net profit, which in 2002 was held back by an EU state aid ruling, doubled in 2003 to EUR1.31 billion. Earnings per share climbed to EUR1.18 from EUR0.59 in 2002.
At the Group's earnings press conference today in Bonn, Chairman of the Board of Management Dr. Klaus Zumwinkel spoke of a 'fully satisfactory fiscal year' and said he will propose a dividend increase at the Annual General Meeting in May: 'We have achieved our targets despite the challenging state of the global economy and are well on track to become the number one logistics provider with the resources we already have. This will benefit the Group, our employees and our shareholders, whom we plan to offer a 2003 dividend that is 10 percent higher than the previous year,' Zumwinkel said. Subject to the approval of the Annual General Meeting on May 6, the dividend payment would amount to EUR490 million, or 44 cents per share.
The last quarter of 2003 was particularly successful, with revenues rising by 6.4 percent to EUR11.1 billion compared with the same period a year ago. EBITA rose 13 percent to EUR936 million in the fourth quarter.
Deutsche Post World Net expects earnings to continue to climb with profit from operating activities (EBITA) rising by 5 to 10 percent in 2004 and reaching its EUR3.6 billion EBITA target in 2005. 'We want to continue growing in 2004, pushing ahead with the successful integration in the Express and Logistics divisions and seizing opportunities in markets across the globe, especially in the U.S. and Asia,' said Zumwinkel.
STAR targets exceeded
One of the important factors of the past successful year was the value creation program STAR. The STAR program is the most important element in Deutsche Post World Net's strategy of becoming the world's number one logistics provider by 2005. Some of STAR's contributions to earnings (EBITA) were realized ahead of schedule. The original plan for 2003 foresaw an earnings contribution from STAR of EUR350 million. Ultimately, STAR measures added EUR423 million to earnings (EBITA) last year.
Corporate Divisions: 43 percent of revenue generated abroad - 150,000 employees outside Germany
In 2003 the Mail Corporate Division contributed some EUR11.9 billion in revenue to total revenue of EUR40.02 billion. Despite a price drop in Germany and the continued adverse economic environment Mail revenues fell by just 1.6 percent. In the Group's largest Corporate Division, Express, revenue rose by 12.3 percent to EUR16.4 billion, mainly attributable to acquisitions, above all Airborne. Revenue in the Logistics Corporate Division rose slightly to EUR5.9 billion, while Financial Services generated EUR7.8 billion in revenue. The 9.9 percent fall in revenue from Financial Services was largely due to lower interest income as a result of falling interest rates.
In line with the Group's continued internationalization, the share of international revenue grew to over 43 percent from around 41 percent. The Group is therefore as planned well on its way towards generating half of revenue abroad in the coming years. Some 150,000 of the total workforce of more than 380,000 are currently employed abroad.
The EUR2.98 billion in profit from operating activities (EBITA) is distributed across the divisions as follows: Mail revenue dropped five percent in 2003 from the year before as price cuts imposed by the regulatory authority had a negative impact. At just over EUR2.0 billion, revenue from the Mail division still exceeded expectations. Measures that were part of the STAR program helped reduce costs, including a scaling back of the overnight airmail network in Germany.
In the Express division, Deutsche Post World Net achieved an increase in profit from operating activities (EBITA) of approximately 51 percent compared with the previous year, taking it to EUR408 million. Positive developments in Europe, the strongest region in terms of revenue, and price and productivity gains in Germany helped boost earnings in the division.
In the Logistics division, EBITA rose by some 19 percent to EUR206 million, largely because of exceptionally sound cost management at DHL Solutions in Germany and Scandinavia.
Financial Services reported a drop in earnings of some 17 percent to EUR566 million, mainly as a EUR212 million one-time gain in 2002 from the reversal of Postbank's negative goodwill wasn't repeated. Excluding the one-time gain, Financial Services earnings would have risen by EUR99 million as a result of considerably higher earnings at Postbank.