DHL: we are not observing a broad revival in world trade
DHL Group met market expectations in the second quarter of 2024. Despite the persistently undynamic global economy, the Group achieved slight year-on-year revenue growth of EUR 20.6 billion (Q2 2023: EUR 20.1 billion). As expected, operating profit (EBIT) of 1.35 billion euros was below the previous year’s level (Q2 2023: 1.7 billion euros).
However, a comparison with the EBIT of the pre-pandemic year 2019 (Q2 2019: EUR 769 million) shows the structurally improved performance of the DHL Group.
“Air and ocean freight volumes continued to increase in the second quarter from a low starting level. However, we are not observing a broad revival in world trade. We also see a slight improvement in express B2B volumes, but not yet a significant acceleration. Accordingly, the utilization of our express network is still not optimal at the moment. However, thanks to our balanced cost and capacity management, we are well positioned even in a weak economic environment. And thanks to our unique logistics portfolio, we are ideally positioned when global trade picks up speed again.”
Melanie Kreis, CFO DHL Group
Focus on securing earnings and investing in growth trends
Gross capital expenditure (capex) amounted to EUR 633 million in the second quarter (Q2 2023: EUR 708 million). In view of the global economic environment, DHL Group continues to focus on securing earnings and cash flow and focusing on investments in its structural growth drivers of omnishoring, e-commerce, sustainability and digitalization. Free cash flow was €344 million (Q2 2023: €450 million; Q2 2019: EUR -547 million).
Overall, DHL Group generated net income after non-controlling interests of EUR 744 million in the second quarter of 2024 (Q2 2023: EUR 978 million). In the same period, basic earnings per share were 0.64 euros, compared to 0.82 euros in the second quarter of 2023. By resolution of the Management Board on May 2, 2024, the share capital was reduced by EUR 39 million by canceling 39,059,409 treasury shares. The share capital now consists of 1,200,000,000 registered shares (ordinary shares).
Group confirms forecast for 2024
The global economy developed in the first half of 2024 as expected by DHL Group: A broad and dynamic economic upswing failed to materialize. In the second half of the year, DHL Group expects a typically positive seasonal business trend due to heavy traffic. In combination with ongoing income and cost management, the Group believes it is well on track to meet its targets for the 2024 financial year. DHL Group expects EBIT of between EUR 6.0 billion and EUR 6.6 billion and free cash flow excluding acquisitions and divestments of around EUR 3.0 billion in 2024.
In its medium-term forecast for 2026, DHL Group continues to expect operating profit of between EUR 7.5 billion and EUR 8.5 billion.
Express: Division achieves double-digit EBIT margin even in a challenging environment
As expected, shipment volumes at Express declined slightly overall, but B2B shipment volumes increased slightly. The division countered the less dynamic global economic development with productivity improvements, network optimizations and ongoing income and cost management. Despite the low network utilization, the division achieved a double-digit EBIT margin.
Global Forwarding, Freight: Volume growth continues
Global Forwarding, Freight was able to increase its revenue slightly. In the second quarter, the division again recorded growth in air and ocean freight volumes in the mid-single-digit percentage range compared to the low level of the previous year.
Supply Chain: EBIT growth continues
The Supply Chain Division continues to benefit from the growth trends of e-commerce and omnishoring. New business, contract renewals and a growing e-commerce business contributed to sales increases in almost all regions and sectors.
eCommerce: Turnover increases year-on-year
The eCommerce division’s sales and volume growth continues. The structural e-commerce trend is more than offsetting restrained consumer spending. The EBIT development in the second quarter primarily reflects the continuous investments in the expansion of the networks and the improvement of service quality.
Post & Parcel Germany: Structural trend from letter to parcel continues
The Post & Parcel Germany division was able to increase revenue and earnings. This positive development is attributable exclusively to the Parcel Germany business segment (unit sales +4.6 percent compared to Q2 2023). As expected, the Post Germany business segment declined (sales -6.8 percent compared to Q2 2023), with the European elections, among other things, softening the trend somewhat.
