Deutsche Post operating profit down 6 per cent

Deutsche Post World Net will file a complaint with the European Court of Justice.

The decision from Brussels to request 850 million euro in repayments from Deutsche Post practically sets off the entire consolidated net profit. In the first half, this figure is 155 million euros (previous year: a good 1 billion), corresponding to earnings per share of 0.14 euro (0.94).

In the first half of 2002 Deutsche Post World Net's revenues increased by over 15 per cent to 19.4 billion euro, driven primarily by the takeover of the majority in the worldwide leading express service provider DHL International. The Group's international revenues rose by over 47 per cent to 7.7 billion euros, representing a 40 per cent share in consolidated revenue. This confirms its rapid transformation from a domestic mail and parcel service provider to a globally leading logistics group.

Presenting the half?year figures in Frankfurt's Japan Center, the Chairman of the Group's Board of Management Dr Klaus Zumwinkel announced a new five?point programme in response to the Brussels state aid decision and the Regulatory Authority's postage rate drop. "The state aid and postage rate decisions are the main factors in the destruction of more than 6 billion euro in market capitalization. Our five?point programme aims to rebuild the value that was demolished by exterior influences, while restoring the capital market's confidence in our Group."

The five points of the programme are:

1. Prices and market shares

Deutsche Post World Net will check in all non?price?regulated segments to what extent short?term price increases are possible. In addition, previously free services such as redirection or storage of mail will be subject to a charge. The Group also intends to launch new products more aggressively, even against the resistance of any lobbying groups.

2. Costs

Due to the Regulatory Authority's decision to decrease postage rates, Deutsche Post World Net expects to generate 300 million euro less revenue next year. However, the legislator wants Deutsche Post to pursue its path ? and successfully so ? as a listed company. In order to compensate for the damage resulting to the company, savings measures could include job cuts, reduction in the number of retail outlets and letterboxes, and savings on IT and advertising.

3. Company strategy

With regard to its business strategy, Deutsche Post World Net intends to strengthen the non?Mail segments even further. In this context its stake in DHL, the worldwide express market leader, plays an important role. The consolidation of DHL in the first half of 2002 allowed the Express corporate division to emerge as Deutsche Post World Net's strongest division in terms of revenue. Outside Germany, the Group intends to focus increasingly on foreign mail markets.

4. The value enhancement programme STAR

STAR entails the consistent realization of cost and synergy potential within the Group, especially against the background of major integrations such as DHL. The declared aim is to achieve a considerable increase in the Group's enterprise value. 120 top executives and another 100 full?time staff from all Group divisions are currently giving their full commitment to the STAR programme.

5. State aid complaint

Deutsche Post World Net will file a complaint with the European Court of Justice against the state aid decision from Brussels. The EU's justification for its decision, which has now been received by the company, confirms Deutsche Post World Net's initial assumption that the decision involved a major breach of the rules of procedure as well as grave errors with regard to the facts of the case.