DP DHL to “take advantage” of economic recovery
Deutsche Post DHL expects to continue its “significant revenue and earnings growth” during the rest of 2011. The admission, made by CEO Frank Appel at the company’s AGM today in Frankfurt, came in light of a successful financial year 2010, and a “dynamic” Q1 for 2011.
“As the world’s largest logistics provider, we profited particularly strongly from the ongoing positive growth of the global economy last year because we positioned ourselves at an early stage to be fit for the upswing,” Appel explained. “Thanks to our excellent position, we can and will continue to take advantage of the continuing recovery of the global economy: our future will be all about profitable growth.”
Despite the current economic risks, the further recovery in transport volumes observed during the first months of the year would point to a continuation of the economic upswing, the chairman of the company’s Board of Management said. In light of this, the Group continues to project an EBIT of between EUR 2.2bn and EUR 2.4bn for the current financial year. The MAIL division is expected to contribute between EUR 1bn and EUR 1.1bn to this result. For the DHL divisions, the Group expects operating earnings to improve to between EUR 1.6bn and EUR 1.7bn, the company said.
Appel also revealed the Group’s mid-term targets: “We want to significantly improve our earnings in the coming years and reach a leading position in our industry in terms of profitability, too.”
In the DHL divisions, the Group aims at generating an average annual earnings growth of 13% to 15% through 2015. In the MAIL division, the objective is to stabilise EBIT at a sustainable level of about EUR 1bn.
“I am convinced that we will continue to outgrow our market over the medium term as long as we set our sights on the key drivers of our business success: satisfied customers, dedicated employees and loyal investors,” Appel said. The critical factor for the future success of the Group would be the company’s strong presence in all regions where growth is being generated, he added. “The excellent position of DHL in the world’s growth markets and our dynamic parcel business in Germany create the ideal conditions for sustainable revenue and earnings improvements,” Appel said.
In the financial year 2010, the Group benefited substantially from the recovery of the global economy. The successfully completed restructuring measures also contributed to the Group reaching or exceeding all the financial targets it had set for itself: revenues recorded a measurable increase, climbing by 11.4% to EUR 51.5bn. The slight drop in revenues in the MAIL division could be more than offset by strong growth in the DHL divisions. At EUR 2.2bn, underlying EBIT exceeded the upper end of the upgraded guidance for the company’s operating earnings by more than EUR 100m and was nearly 50% higher than the previous year’s level. For the very first time, the DHL divisions contributed more to the Group’s operating profit than the MAIL division.
In combination with the positive effects stemming from the sale of Postbank, the volume growth realised in the DHL divisions and efficiency improvements produced a fourfold increase in the company’s net profit to EUR 2.5bn. Earnings per share climbed from EUR 0.53 in 2009 to EUR 2.10 in 2010. Appel said: “With our Strategy 2015, we have charted a clear course for our future development, and we have already made significant progress on this path during the past year.”
In light of the good results of the past financial year, the Board of Management and Supervisory Board proposed a dividend of EUR 0.65 per share for 2010 to company shareholders. This represents an increase of EUR 0.05 per share from the EUR 0.60 per share that the Group paid its shareholders last year.
Based on the company’s consolidated net profit adjusted for non-recurring items this dividend proposal reflects a payout ratio of 59%. This is within the range of 40% to 60% that the Group set as a target corridor for future dividend payments in its finance strategy that was published in March last year.
Based on the year-end closing price of the Deutsche Post DHL share, dividend yield totals 5.1%. The Group’s dividend policy would be a clear signal for the high level of continuity and predictability that the company set for itself with the new finance strategy, Appel stated.