Deutsche Post DHL reports successful Q3 “despite weak economic tailwind”
Deutsche Post DHL Group has reported a significantly increased profit for the third quarter (Q3), “despite a weak economic tailwind”. The Group EBIT increased to €755m, representing the strongest third quarter in the company’s history.
Deutsche Post DHL said that the sharp increase on last year’s Q3 EBIT of €197m was the result of “sustained organic growth in operating profit in all divisions in addition to the non-recurrence of substantial one-time effects”.
Group revenue for the quarter was €13.9bn, down 3.9% on Q3 2015. The company said this drop was due to negative currency effects, lower fuel surcharges and also reflected “a change in the recognition of revenue generated from a key customer contract in the Supply Chain division, which took effect in the fourth quarter of 2015”.
Commenting on the results, Frank Appel, CEO of Deutsche Post DHL Group, said: “The strong trend in operating profit in all four divisions shows that we have set the right priorities with our Strategy 2020. We are taking an increasingly active role in the dynamic development of e-commerce all over the world and are continuing to invest in this segment.
“Thanks to the targeted investments and strategic initiatives we implemented in prior years, we are now enjoying success despite weak economic tailwind.
“We are well on track to reaching the ambitious goals we have set for 2016 and beyond.”
To give some detail on those “ambitious goals”: Deutsche Post DHL Group still expects to reach its objective of increasing EBIT for full-year 2016 to between €3.4bn and €3.7bn, and continues to forecast an average increase in operating profit of more than 8% annually during the period from 2013 to 2020.
Focusing now on the various businesses within the group, operating profit at the Post – eCommerce – Parcel (PeP) division more than doubled to €295m (but it should be borne in mind that the Q3 2015 result of €142m had been impacted by the consequences of a postal strike in Germany). Revenue for the PeP division increased by 4.0% to €4.0bn in Q3.
According to Deutsche Post DHL Group: “In addition to the postage stamp price increase implemented at the beginning of the year, the division’s positive performance was driven above all by volume and revenue increases in the eCommerce – Parcel business units.”
Revenue in the eCommerce – Parcel business units increased by 11.6% to €1.7bn. The increase was based on revenue gains of 11.1% for Parcel Germany, 13.3% for Parcel Europe and 12.3% for eCommerce.
The Group has also been expanding its parcel network via partnerships with postal companies in Hungary and Slovenia, which brings the number of European countries in which the Group is active to 18. Deutsche Post DHL Group said that it will “continue to advance its expansion in the United Kingdom, Europe’s biggest e-commerce market, through the planned acquisition of UK Mail”.
Revenue in the Post business unit declined by 0.9% to €2.296bn. The Group said that the increase in letter postage prices at the beginning of the year “almost fully offset the negative effects of the structural decline in volumes in Mail Communication and Dialogue Marketing segments”.
Click here to see the full Deutsche Post DHL Group statement on the Q3 results.
