Deutsche Post World Net with solid 2006 annual results
- Revenue rises 36% to 60 billion euros, EBIT at 3.9 billion euros
- Dividend increase to 75 cents planned
- Largest integration in the Group's history successfully mastered
- Group Chairman and CEO Zumwinkel demands fair liberalization
Looking back at a fiscal year that drew to a positive close, Deutsche Post World Net proposed a dividend increase to 75 cents at the company's annual press conference in Bonn. For 2007, the Group forecast a slight rise in revenue and EBIT excluding extraordinary effects. "Our good operating performance in 2006 - particularly in the fourth quarter - shows that our strategy of internationalization is bearing fruit," said the Group's Chairman and Chief Executive Officer Klaus Zumwinkel. "We already generate some 60 percent of our revenues abroad and more than half of our operating profit with services outside the MAIL division."
The integration of the British logistics group Exel, with its 110,000 employees, proceeded smoothly in the year under review and BHW could be integrated earlier than planned. Zumwinkel: "What we have achieved with Exel represents the largest integration in our industry and, when considered together with BHW, the largest in our corporate history. This was all managed most successfully - a fact clearly reflected in the numbers." With the acquisition of Williams Lea, the Group also expanded the value-added services offered by the MAIL Division. Overall, the Group today works from a solid base for profitable organic growth, a base that is unique in the industry. This platform will be further reinforced by the "First Choice" corporate initiative, rolled out at the beginning of 2007. "First Choice" will comprise more than 5,000 projects Group-wide over the next two years; these should decisively contribute to meeting the targets set for 2009.
In order to secure jobs in Germany in the future, further steps toward the liberalization of the mail market must be taken reasonably and with a sense of responsibility. "We are concerned about the political framework for the full opening of Germany's mail market," said Zumwinkel. The current situation, where there is no agreement on a harmonized liberalization throughout Europe and where nothing stands in the way of competitors pursuing a strategy of wage dumping, runs contrary to the practice of fair competition. "Deutsche Post will continue to ensure universal service throughout Germany," Zumwinkel promised.
Financial key figures
In fiscal 2006, operating profit (EBIT) rose by 2.9 percent, from 3.76 billion euros to 3.87 billion euros, including the one-time gains communicated. Consolidated revenue grew by 35.8 percent to 60.55 billion euros. Consolidated net profit declined by 14.3 percent to 1.92 billion euros, primarily attributable to Deutsche Post World Net cutting back its Postbank holding in the past fiscal year to 50 percent plus one share. Earnings per share fell by 19.6 percent to 1.60 euros.
In the MAIL Division, the Group was able to more than offset the expected decline in revenue in its home market through growth at its international business. Following an encouragingly strong fourth quarter, revenue grew by 3.2 percent to 13.29 billion euros. EBIT grew slightly from 2.03 billion euros to 2.05 billion euros, facilitated in part by successful cost management.
EXPRESS DivisionThe EXPRESS Division increased its revenue by 2.2 percent to 17.2 billion euros. After initiating the turnaround in the U.S. in the second half, EXPRESS generated EBIT of 325 million euros in the year under review. In 2005, the division booked losses of 23 million euros.
The Group's Board: Frank Appel, John Mullen, Walter Scheurle, Wulf von Schimmelmann, Klaus Zumwinkel, Hans-Dieter Petram, Edgar Ernst, John Allan
LOGISTICS was able to increase its revenue even more than expected in the year under review. Revenue more than doubled to 22.74 billion euros, a figure all three business units contributed to with sustained organic growth. Acquisition effects came to 11.64 billion euros, of which the largest share was from the purchase of Exel. EBIT advanced to 762 million euros from 346 million euros.
FINANCIAL SERVICES Division
The EBIT at the FINANCIAL SERVICES Division, stemming largely from Postbank, rose in the course of 2006 from 863 million euros to 1 billion euros for the first time.
For the current year, Deutsche Post World Net expects an overall positive business development with a slight increase in sales. EBIT should reach at least 3.6 billion euros. This corresponds to an increase of at least 3 percent from the comparable basis of the previous year, when one-time gains had a positive effect on earnings. These included the exercise of the exchangeable bonds on Postbank shares as well as the related sale of Deutsche Postbank shares (totaling 276 million euros).
Stable to slightly higher revenue is expected at the MAIL Division. The Group expects that the other business units will more than offset revenue losses in the domestic mail business. EBIT should remain stable, at 2 billion euros. 2007 EBIT of more than 500 million euros is forecast for the EXPRESS Division, not including the extraordinary effects of setting up the new hub in Leipzig. Including these expenses, EBIT should be at least 400 million euros.
In LOGISTICS, the Group expects high single-digit percentage growth in revenue for 2007. EBIT should increase by around 15%. In the FINANCIAL SERVICES Division, revenue is forecast to rise, driven in part by the steady increase in contributions from BHW. The Group expects that EBIT for FINANCIAL SERVICES, including extraordinary expenses of about 100 million euros, will climb by at least 5%.