Deutsche Post World Net set for strong growth
- Earnings forecast for 2009: 5 billion euros
- Consolidated EBIT for 2005 exceeds forecast at 3.76 billion euros
- 2005 Earnings per share increases by 38 percent to 1.99 euros
The continued strength of the global logistics industry shows no sign of ending: global market leader Deutsche Post World Net exceeded its EBIT forecast for 2005 and expects a substantial increase in earnings for 2009. By then operating profit should reach at least 5 billion euros, an increase of a third compared to 2005. The EXPRESS, LOGISTICS and FINANCIAL SERVICES divisions will each contribute at least 1 billion euros to this figure. For the MAIL division, the company forecasts stable profits of around 2 billion euros to 2007. Despite growing competition in the German mail market in the years after 2007, the Group believes it will be able to limit the negative impact on the division's profits to a maximum of 10 to 20 per cent.
"It is now clear that our corporate strategy over the last few years is bearing fruit," said Board Chairman and Chief Executive Officer Klaus Zumwinkel. "Our competitive advantage is founded on the broad and stable positioning of the Group, the rapid integration of growth driver Exel, and the increased sales performance brought by BHW in financial services," Zumwinkel expressed great confidence in the future of the company and restated his intention to increase the dividend for the 2005 financial year by at least a third. At the same time, he announced a Group-wide customer acquisition and quality program designed to make a significant contribution to the Group's financial performance during the next phase in its development. Following the implementation of the STAR program with its focus on synergies and costs, the company now increasingly is turning its attention to global customer segments and needs. Details on the new program will be presented at the annual earnings press conference in mid-March.
The 2005 financial year
In the 2005 financial year, profit from operating activities based on comparable EBIT figures rose by 25.1 percent from 3 billion euros to 3.76 billion euros, slightly ahead of the forecast published in December. For 2004, the Group reported EBITA figures. Compared to prior-year EBITA of 3.37 billion euros, this is an increase of 11.4 percent as shown by the figures for 2005, which are now available for the first time. Consolidated net profit increased by 39.9 percent to 2.24 billion euros. Earnings per share at Deutsche Post World Net improved by 38 percent to 1.99 euros in 2005, compared with 1.44 euros a year earlier. Group revenue grew by 3.3 percent in 2005, to 44.6 billion euros. These figures do not yet include the results from the logistics company Exel, acquired in December.
"We have been particularly pleased with the Financial Services sector and the existing Logistics division, which have seen double-digit growth rates in the last year," said CFO Edgar Ernst. In the Express division, goodwill in the amount of 434 million euros was written down for the Americas region. "We are benefiting from an extraordinary gain as a result of new legislation governing the Postal Civil Service Health Insurance Fund. We have also made a fresh start in the U.S. in financial and operational terms so that we are now well positioned to exploit the market opportunities on offer," said Ernst. Without the goodwill write-down, the result for the EXPRESS division would have been just under the forecasted around 500 million euros. The division now reported 2005 EBIT of 11 million euros.
At 2.03 billion euros, the MAIL division maintained the previous year's high EBIT level in 2005. The LOGISTICS sector continued to grow, with EBIT rising to 315 million euros, representing an increase of 73.1 percent over the previous year's performance. FINANCIAL SERVICES will also at least meet the guidance of a 10 percent increase in EBIT.
The 2005 Annual Report with the full results will be published at the annual earnings press conference on March 14, 2006.