May 18, 2016: Deutsche Post DHL Group confirms Strategy 2020 growth targets - stable dividend proposed

On the basis of its strong balance sheet and cash flow position, and with the expectation of further improvement in business performance, March saw Deutsche Post DHL Group launch a share buyback program of up to EUR 1 billion. By the time the AGM was held, the company had already purchased around 4 million shares in the amount of almost EUR 100 million.

In light of the Group's uninterrupted, robust business performance in financial year 2015, the Board of Management and the Supervisory Board have proposed an unchanged dividend of EUR 0.85 per share at the Annual General Meeting. The Group would thus distribute a total of EUR 1.03 billion to its shareholders. Based on consolidated net profit adjusted for one-off effects, the proposed dividend corresponds to a payout ratio of 46%. This figure ensures the company remains within the target range of 40% to 60% set in 2010.

Strategy 2020 - a roadmap for future development

CEO Frank Appel also went into detail with regard to Deutsche Post DHL Group's mid- to long-term business prospects as he addressed the shareholders. 'Strategy 2020 is our roadmap. It sets our targets for future growth. And the course is set for a successful 2016 - and beyond,' he affirmed. This applies to the international expansion of the successful parcel business and investments in the global infrastructure of Express, just as it does to the optimization program at DHL Supply Chain and the IT renewal in the Freight business.
The three basic assumptions of Strategy 2020 further strengthen the company from within. Firstly, the logistics market is an attractive industry - both in the domestic market in Germany and at international level. Secondly, quality is the basis for stable customer relationships in the long term, whereby Deutsche Post DHL Group's aim of being quality leader in its sector plays an integral role. Thirdly, the Group is extremely well-positioned in its markets, explained Frank Appel. With its unparalleled global infrastructure and approximately 500,000 highly-engaged employees around the world, the Group has created a healthy foundation for sustainable organic growth. 'We are the undisputed leader in almost all areas of logistics. This is a position we aim to maintain in future - and we are set for success,' said Frank Appel.
It is on this basis that Deutsche Post DHL Group is using the parcel business know-how it has gained in Germany as it expands its delivery network in Europe. Including Scandinavia and the Baltic states, the company now has a presence in 16 European countries. Thanks to the dynamic growth in e-commerce, new markets are also being opened up outside Europe - for instance in Thailand at the start of the year. By setting up Paketshops and Packstations in numerous regions, the company is laying the logistical foundations necessary to foster the dynamic development of e-commerce.

Such strategic initiatives and investments across all the divisions will, as previously intimated, be increasingly reflected in the company's results over the coming years. Mr. Appel also reiterated the target of realizing an average annual increase in operating profit of more than 8% by 2020 (CAGR) as he addressed the shareholders.

Corporate responsibility - part and parcel of our daily work

It is, however, not only financial performance metrics that are decisive for the long-term economic success of Deutsche Post DHL Group. Rather, responsible business practices play just as significant a role in business operations and strategic planning. It is this ethos that has fostered the company's close partnership with the United Nations for more than ten years. The cooperation focuses on providing rapid and seamless logistical support in the wake of natural disasters. Most recently, employees in DHL's Disaster Response Team were deployed to provide on-site relief following the devastating earthquake in Ecuador. During the Annual General Meeting, Frank Appel drew specific attention to the 'Refugee Aid - Acting together!' project. The collaborative initiative involving both the Group and its employees secured Deutsche Post DHL Group the German CSR Prize just a few weeks ago. 'Our people's willingness to help is truly inspiring,' said Frank Appel with reference to the 13,000 employees who volunteer to take part in refugee aid activities in their free time. 'I am proud of everyone who - over and above their daily work - has gotten involved, and am inspired by their passion.'

The progress the logistics company has made in its efforts to improve carbon efficiency by 30% by the year 2020 (base year 2007) is further testament to the importance placed on corporate responsibility. Indeed, the 25% mark was broken in 2015. The company hopes to see further progress through the use of carbon-free delivery and e-mobility. To this end, the Group has developed its own electric delivery vehicle - the StreetScooter - which will go into series production of 2,000 vehicles this year.
Projects such as the StreetScooter and the application of state-of-the-art robotics and automation technology allow Deutsche Post DHL Group to extend its reputation as an innovation leader in the sector. 'As pioneers in logistics we make a decisive contribution to shaping the future of this industry,' stated Frank Appel.

A look back at 2015 - a year of transition

As a result of strategic reorientation measures for the transition to 'Strategy 2020', Deutsche Post DHL Group's financial year 2015 was characterized by a series of challenges. It was not an easy year, said CEO Frank Appel. 'There were hurdles to overcome but we didn't let them hold us back.' Consolidated revenue increased by 4.6% year-on-year to EUR 59.2 billion. Consolidated EBIT was EUR 2.41 billion (2014: EUR 2.97 billion), fulfilling the revised earnings guidance of a minimum of EUR 2.4 billion. The EBIT contribution from PeP amounted to EUR 1.1 billion (2014: EUR 1.3 billion), and the DHL divisions generated an operating profit of EUR 1.66 billion (2014: EUR 2.02 billion). As a result, PeP and DHL performed in line with the expectations communicated last October.

The decline in consolidated EBIT of EUR 554 million year-on-year, was largely a reflection of non-recurring effects, in particular the one-off expenses charged in the second half of the year in connection with the IT renewal in the Freight business. The 52-day strike by postal employees in Germany also had an impact on consolidated net profit. The fact that the operating business remains entirely intact can be attributed in part to the strong performance witnessed between October and December, when the Group achieved the highest quarterly EBIT in company history (excluding Postbank). The Group also recorded very strong year-end performance with regard to free cash flow which rose to EUR 1.72 billion (2014: EUR 1.35 billion).

Candidates for the Supervisory Board

The agenda of this year's shareholders' meeting includes the proposed election of four Supervisory Board members. Ingrid Deltenre, Director General of the European Broadcasting Union (EBU), and Dr. Nikolaus von Bomhard, Chairman of the Management Board at Münchner Rückversicherungs-Gesellschaft AG, are to be elected to the supervisory body for the first time. Thomas Kunz and Elmar Toime will step down from the committee as their appointment comes to an end.

The terms of office of Prof. Dr.-Ing. Katja Windt, Managing Director of Jacobs University Bremen GmbH, and Werner Gatzer, State Secretary, Federal Ministry of Finance, shall also come to an end at the close of this Annual General Meeting. They will stand for election to the Supervisory Board for a further period of office in the capacity of shareholder representatives.