Deutsche Post CEO sees EPS up 30 pct, still sees FY EBIT at least 3.6 bln eur
Deutsche Post AG CEO Klaus Zumwinkel reaffirmed the company's full year earnings forecasts, and said he expects the state to sell off all its remaining holdings in the company in the medium term.
Zumwinkel told the annual meeting that the company is sticking to its forecast of full year EBIT of at least 3.6 bln eur and a rise in net profit of 500 mln eur.
Shareholders 'will benefit (from an increase on) our 2004 earnings per share (of an estimated) 30 pct,' he added.
Zumwinkel said he expects the government and state-owned development bank Kreditanstalt fuer Wiederaufbau (KfW) to sell all of their shares in Deutsche Post in the 'mid-term', without giving a specific timeframe.
'A reduction in the government's holding to below 50 pct would be an important step in terms of market psychology… We expect that the complete privatization of our company … will be concluded in the mid-term. That is the goal in any case,' he said.
Commenting on Deutsche Post's acquisition strategy, he reiterated the company will continue keeping an eye on potential acquisitions among foreign postal companies but will not pay inflated prices.
'We have a clear strategy for internationalizing our mail business… This year, we are intensifying our mail activities in the UK,' he said.
Zumwinkel however stressed the company's biggest challenge this year is its US operations, which are expected to break even end-2006.
DPWN Press Release:
Deutsche Post AG 2005 Annual General Meeting: Positive news for shareholders
§ 2004 dividend increases by 13.6 percent; further increase targeted
§ Share price up by 10 percent since beginning of 2005
§ Positive start in 2005 confirms confidence for full year
§ Targets confirmed: 2005 Group EBIT at least 3.6 billion euros
Deutsche Post World Net boosted revenue and earnings in 2004 and completed its best year since 1990. "I think we can all be very proud of this Group and its course," Management Board Chairman Klaus Zumwinkel said today before shareholders at the company's Annual General Meeting in Cologne. "Our earnings expectation of at least 3.6 billion euros for 2005 as a whole remains unchanged," Zumwinkel confirmed. The Board of Management and the Supervisory Board are therefore proposing to the Annual General Meeting the payment of a dividend 13.6 percent higher than the previous year, which corresponds to 50 euro cents per share. The dividend is tax exempt for German shareholders.
2004 business year
Revenue grew by 7.9 percent to around 43.2 billion euros in 2004. Revenues generated outside of Germany climbed to almost 48 percent of the total and will probably reach 50 percent this year. The 2004 profit from operating activities of around 3.35 billion euros exceeded the prior-year figure by 12.5 percent. At around 1.59 billion euros, consolidated net income was up 21.3 percent from the previous year's level. This corresponds to earnings per share of 1.43 euros; in 2003 EPS was 1.18 euros per share.
As already communicated in March, the Group tax rate under International Financial Reporting Standards (IFRS) will remain at the prior-year level in the coming years. Together with the discontinuance of goodwill amortization, this will have a clearly positive impact on earnings per share, based on 2004 profits. "For us, it goes without saying that our shareholders should also benefit from these positive effects through a dividend increase," Zumwinkel said.
An important factor for the successful 2004 fiscal year was the STAR value creation program. STAR measures had contributed 862 million euros to earnings up to the end of 2004, which is 23 percent more than originally planned. In the first quarter of 2005, STAR generated another 101 million euros. By the end of 2005 this should be at least 1.4 billion euros.
Development of Deutsche Post stock since the beginning of 2005
Deutsche Post World Net had a positive start in 2005 for revenue and earnings. Combined with other factors, this development has helped the Deutsche Post shares gain 10 percent since the beginning of 2005.
Outlook
Deutsche Post World Net will profit again this year from the continuing increase in global trade. World trade volumes should continue to rise strongly in 2005, driven by growth in countries such as India and China. The Group is already transporting around five percent of the entire global trade, is No. 1 in Europe and Asia and No. 3 in the U.S. in the express business, as well as the leading provider of airfreight forwarding worldwide.
The company confirms its expectation of reaching an operating profit of at least 3.6 billion euros for the full year of 2005. For MAIL, the Group expects EBIT for the year to stabilize at around 2 billion euros, the level of the previous year. Operating earnings for the EXPRESS division, including the Americas region, are expected to double. The company is confident that the LOGISTICS division will continue its positive trend and exceed the comparable prior-year earnings by 5 to 10 percent. In the FINANCIAL SERVICES division, the Group expects earnings growth of 5 to 10 percent for the year as a whole.
The Annual General Meeting on the Internet
Klaus Zumwinkel's speech
Charts to the Speech
2004 Annual Report
