DHL: we have navigated our company through this crisis very well so far
Deutsche Post DHL Group, significantly increased earnings in Q2 2020 despite Covid-19. Operating profit (EBIT) improved by around 16% to around EUR 890 million. Adjusted for one-off effects in the previous year and in the current year, operating profit came in around 25% above the prior-year figure.
“We have navigated our company through this crisis very well so far. We owe this to our committed colleagues worldwide. Only through the tireless efforts of our teams have we managed to keep supply chains up and running and thus maintained the worldwide supply“, said Frank Appel, CEO Deutsche Post DHL Group. „Our fundamental strength and resilience as a Group has paid off in recent months: With our broad portfolio of leading logistics services, we have the right business model to form the backbone of global trade.
As an appreciation for their efforts during the last months under the Covid-19-pandemic the Group has decided to grant a special one-time bonus of EUR 300 to employees worldwide. This one-time bonus payment will be carried out in the coming months and is aimed at colleagues in all divisions and in all countries. Excluded are Executives. In total, the Group will grant one-time bonus payments of around EUR 200 million, which will be booked in the third quarter 2020.
Date and dividend proposal for Annual General Meeting
Deutsche Post DHL Group is going to hold its Annual General Meeting on August 27th, 2020 in a virtual online format. The Group proposes a dividend of EUR 1.15 per share, which is stable compared to last year.
“Our strategy is focused on achieving three bottom lines: We want to be the provider, employer and investment of choice. Our success during the past months of the crisis is based on balancing these goals in everything we do. We have therefore decided to pay a dividend at the previous year’s level to our shareholders and a special bonus for our employees”, said Frank Appel.
Business performance in the second quarter 2020
At the beginning of the second quarter, business development was still dominated by the pandemic protection measures in place in Europe and North America as well as an initial sharp decline in volumes. The Group took measures to adjust to the pandemic-related changed utilization of the network and to maintain its own flight capacity. During the course of the second quarter, the volume development started to slowly recover. In addition, since end of March the company has recorded a positive development of shipment volumes driven by e-commerce, both internationally and in the German parcel business.
Preliminary Group EBIT reached around EUR 890 million in the second quarter of 2020 (2019: EUR 769 million). This number includes the already expected negative impact of around EUR 100 million to realign the Group’s StreetScooter activities and an additional around EUR 100 million impact from special one-time impairments as a consequence of the lockdown measures and primarily concerning the Supply Chain and eCommerce Solutions division. The Group does not differentiate anymore between an adjusted operating results before and after effects related to Covid-19 as this distinction became increasingly artificial and less meaningful during the second quarter.
Operating profit in Post & Parcel Germany was around EUR 260 million (2019: EUR 177 million). The Express division managed to increase its EBIT in the second quarter to EUR 560 million compared to previous year of EUR 521 million. Operating profit in Global Forwarding, Freight stood at around EUR 190 million (2019: EUR 124 million). EBIT in Supply Chain suffered from the above-mentioned impairments in the second quarter of around EUR 60 million. EBIT at Supply Chain was around EUR 30 million in the second quarter (2019: EUR 87 million). Despite impairments of around EUR 30 million, eCommerce Solutions was able to achieve break-even EBIT (2019: EUR -18 million).
The overall positive business development is accompanied by a continuous strong development of cash flow; free cash flow stood at more than EUR 500 million in the second quarter, which is significantly up compared to last year (2019: EUR -547 million). Thus, a positive free cash flow of more than EUR 100 million was achieved in the first half-year.
A detailed publication of the results for second quarter 2020 will take place on August 5th, as planned.