Deutsche Post World Net launches “STAR” – Group-wide value enhancement programme
– Net profit from operating activities (EBITA) to rise by roughly 40 percent to €3.1 billion by 2005
– DHL as the brand for Express and Logistics: one brand, one management, one administrative center in Brussels
Today, immediately following the European Commission’s approval last week of its takeover of DHL, Deutsche Post World Net has launched a Group-wide value enhancement programme, “STAR”. The programme aims to ensure the complete integration of the Group companies DHL, Danzas and Deutsche Post Euro Express. This is the decisive step towards making Deutsche Post World Net the global number one logistics provider.
Dr. Klaus Zumwinkel, Chairman of the Board of Management of the Group, explained STAR’s goals at a press conference in Frankfurt today. Net profit from operating activities (EBITA) will rise by roughly 40 percent by 2005, from €2.2 billion (2002 forecast) to €3.1 billion. In order to achieve this, the Group aims to achieve sustained leverage of its substantial value reserves. This will be done in particular by fully integrating all Group companies in the Express and Logistics areas under the DHL umbrella. “The company has successfully met similar challenges in the past,” said Zumwinkel. “We have set ourselves an ambitious but nevertheless realistic goal with the figure of €3.1 billion.”
150 top executives of Deutsche Post World Net working in 17 project groups have identified 115 different projects since the start of the year that will now be implemented at high speed in the period up to 2005. These projects affect all Corporate Divisions, functions and administrative centers (see Appendix).
Particularly important in this context is DHL, which in future will act as a single brand for all Group Express and Logistics activities. Starting in 2003, it will combine the Group’s domestic and international parcels and express business as well as its logistics activities (total revenue: €21 billion) under a single umbrella. The new motto “One brand – one face to the customer” symbolizes Deutsche Post World Net’s systematic one-stop shopping approach and will offer substantial improvements for customers. At the same time, significant synergy effects can be achieved in terms of both costs and revenue.
In addition to the brand (DHL) and the administrative center (Brussels), the management of the new integrated Corporate Division will be harmonized under the management of Group Board of Management members Dr. Peter Kruse and Mr. Uwe Dörken. Dr. Frank Appel, another Group Board of Management member, has overall responsibility for the STAR project.
According to the Chairman of the Board of Management Dr. Klaus Zumwinkel: “We want DHL to stand for a promise of uniform service quality for our customers worldwide. We intend to become the number one logistics provider in the world, with a single brand, a single administrative center and a single management team.”
Examples of individual projects
Example 1: European networks
Deutsche Post World Net currently operates six parallel networks for cross-border traffic within Europe in addition to its networks in individual countries. In France, for example, the Group operates four networks: EuroExpress, DHL, EUCA international and EUCA domestic. In future a new, integrated structure for these independent networks will be created. The goal is to implement an integrated European network, which will incorporate the national networks, to meet customers’ cross-border requirements. This measure is expected to contribute at least EUR 130 million to net profit by 2005.
Example 2. Purchasing
Deutsche Post World Net will restructure and optimize its purchasing organization and processes worldwide. Current purchasing volumes amount to roughly EUR 15.6 billion, of which EUR 8.2 billion, or rather more than half, is accounted for by transport expenses. Purchased goods and services other than transport account for approximately EUR 7.4 billion. Restructuring the Group’s purchasing organization, bundling purchasing power, laying down binding purchasing standards and introducing improved, Group-wide purchasing management will improve Deutsche Post World Net’s EBITA by at least EUR 200 million by 2005.
Example 3: Mail – night mail network
In the Mail Corporate Division, the Group will streamline its night mail network, among other projects. In future, Deutsche Post World Net will require twelve fewer flights per night and will reduce its air mail capacity. Starting in January, letters will no longer be transported by air between Frankfurt and Dresden and between Dresden and Leipzig. Instead, these transports will be routed by road in future, resulting in substantial cost savings but without leading to noticeable delays for the customer. Starting in April of next year, a further nine routes will be discontinued. The total effect of all measures to be taken in the Mail Corporate Division in the period up to 2005 is EUR 300 million.
Example 4: Information technology (IT)
Deutsche Post World Net also sees substantial synergy potential in the area of IT. At present, the Group operates 18 large regional data centers worldwide. Servers are situated at 290 locations, and employees access roughly 2,500 databases from more than 130,000 workstations. More than 140 different firewalls currently protect these systems. These structures will be changed so as to amalgamate the regional data centers into three of four global sites. Other measures include network consolidation and the integration of the backbone, as well as harmonizing IT workstation configurations. In addition, standard applications will be introduced throughout the Group. Savings of at least EUR 50 million can be generated as a result of these measures by 2005.
Example 5: Headquarters and administrative center
There will also be changes at Deutsche Post World Net’s locations. Group headquarters will remain in Bonn and will move in the near future to the new Post Tower. DHL will be restructured: the administrative centers of Danzas (Basel), Euro Express (Bonn) and DHL (Brussels) will be merged at the Brussels site. The “DHL Danzas Air and Ocean” unit will remain in Basel.
Press Contacts:
Deutsche Post World Net
Press Office
Dr. Martin Dopychai
Norbert Schäfer
Phone: +49 228 / 182 – 99 88
Fax: +49 228 / 182 – 98 22
eMail: [email protected]
