Deutsche Post DHL Group expects to emerge stronger from the crisis
Deutsche Post DHL remains optimistic it can steer successfully through the COVID-19 crisis, benefiting from continued e-commerce growth and globalization.
CEO Frank Appel told yesterday’s Annual General Meeting, held virtually this year, that the group is navigating safely through the crisis and considers itself well prepared for the post-pandemic period.
In his address, Appel talked about the crisis highlighting the importance of logistics as the backbone of the global economy. According to the CEO, Deutsche Post DHL Group is making a fundamental contribution to overcoming the crisis by transporting medicines, protective equipment and medical equipment around the world, and maintaining trade flows.
Correspondingly, Appel was confident with regard to the Group’s earnings guidance for the current year, issued in July, and the medium-term financial targets: “We’ve managed to implement the right measures in many areas. Deutsche Post DHL Group will emerge stronger from this crisis.”
Operating profit for 2020 should reach between €3.5 billion and €3.8 billion. For 2022, the Group expects EBIT of around €4.7 billion to more than €5.3 billion, depending on the course of the overall economic recovery.
According to the CEO, the fact that Deutsche Post DHL Group is coming through the crisis so well is due to its robust business model, long-established corporate culture and clear strategic direction. "Strategy 2025", presented in fall 2019, has kept the Group on track despite the uncertain environment.
Appel explained: “The strategy focuses on the right issues: globalization, e-commerce, digitalization and sustainability. These trends have become all the more relevant in this time of crisis, or are even accelerating rapidly due to the pandemic.”
Moreover, according to Appel, the pandemic has shown that globalization is not the problem, but the solution. The fight against Corona has made clear the importance of a connected world – whether it’s worldwide collaboration in research or supplying people with the goods they need.
After red-hot growth over the last several months, Appel still sees considerable growth potential in e-commerce, which offers growth opportunities to entrepreneurs. Furthermore, the pandemic has also accelerated digitalization and helps to rethink logistical processes.
The result is a more modern, sustainable company. That is why Deutsche Post DHL Group is investing around €2 billion in the digital future by 2025, for greater efficiency, for a better customer experience and improved working conditions.
Despite the current challenges posed by the pandemic, Appel also warned not to lose sight of sustainability and climate change. In the long term, he said, it was the much bigger problem with existential consequences. As a sustainable provider, Deutsche Post DHL Group has been setting standards in the industry for years.
The CEO pointed out: “We are not resting on our laurels. We want to reduce our emissions to zero. This also supports our customers, since they depend more and more on green logistics. These days, providers that can offer green logistics have a competitive advantage.”
Furthermore, in his address to shareholders, Appel indicated that he was very satisfied with the recently announced financial results for the first half of 2020. Despite the challenges due to the Corona pandemic, Appel reported that all five divisions were profitable and that Deutsche Post DHL Group continued to grow overall.
The second quarter saw Group revenue up by 3.1% to €16.0 billion, driven in part by the boom in e-commerce. Operating profit rose by 18.6% to €912 million.
Appel expressed special thanks to the Group’s approximately 550,000 employees worldwide: “You've done an incredible job in this difficult time. Thank you for making the impossible possible.” As a show of appreciation, the Group will pay all employees worldwide a one-time bonus of €300 in the third quarter of this year.
For balanced participation in the success of the company, the Board of Management and Supervisory Board proposed a dividend of €1.15 per share for the past financial year, unchanged from the previous year. This was overwhelmingly approved by shareholders.
Appel emphasized that stable dividends are by no means standard in the current environment. The company will pay out a total of approx. €1.4 billion to shareholders – a dividend payout ratio of 55% of the adjusted net profit for 2019. Deutsche Post DHL Group thus remains within the target corridor of 40 to 60%, unchanged since 2010.
