Deutsche Post's New Integration, Cost Savings Program

Deutsche Post AG (G.DPW) confirmed Wednesday that it has launched a cost-cutting program, but the partially privatized mail group denied it is planning a reorganization. Earlier Wednesday, daily newspaper Die Welt said Deutsche Post had begun a cost-cutting program that could lead to a broad restructuring of the group, including the creation of a holding company. ‘It isn’t a reorganization of the company,’ Deutsche Post spokesman Uwe Bensien said. ‘It’s a framework program to press ahead with integration, cost savings and sales-revenue increases.’ Bensien added that the program, called ‘Star,’ would aim for ‘radical improvements in our brands group-wide, and cross-divisional cooperation.’ Bonn-based Deutsche Post, which is also active in the parcels, logistics and financial services businesses, effectively launched the program at a meeting in Berlin late last week of about 300 top managers, Bensien said. Bensien declined to speculate about the program’s likely impact on Deutsche Post’s 2002 earnings, but he said the company was confident it would have a positive effect on earnings generally. In 2000, Deutsche Post reported a net profit of EUR1.53 billion on sales of EUR32.7 billion. The company said last year it expected 2001 net profit, which hasn’t yet been announced, to be in line with the level in 2000. At 0925 GMT, Deutsche Post shares were up EUR0.37, or 2.5%, at EUR15.47.