PRESS CONFERENCE
FRANKFURT AM MAIN, APRIL 2, 2014
OUR NEXT HORIZON: ACCELERATING ORGANIC GROWTH
Accelerating
organic expansion
Inorganic
expansion
Unlocking
our potential
Create the base
1990–1997
PRESS CONFERENCE | APRIL 2, 2014
1998–2008
2009–2015
2014–2020
PAGE 2
RECAP ON MAJOR FUNDAMENTAL STRATEGIC CHOICES
Defend and expand
position in Germany
Stabilized MAIL EBIT above EUR 1bn
Long-haul
international trade
EXPRESS: Focus on Time Definite International strategy
Logistics outsourcing
Offset of mail revenue decline through parcel growth
FORWARDING: Exploit global market share and growth
SUPPLY CHAIN: Take advantage of global outsourcing
trend
Increase margin through contract lifecycle discipline
PRESS CONFERENCE | APRIL 2, 2014
PAGE 3
STRONG PROGRESS ALONG ALL DIMENSIONS
Customer Satisfaction
(Example: DHL Express)
68
(Scale 0-100)
79
GoGreen
2009
2012
C
2 efficiency:
+18% (2013)
Provider of Choice
(cp. to base year 2007)
Investment of Choice
Business Performance
Reported EBIT
‒ EUR bn ‒
0.2
2009
1.8
2.4
2.7
2.861
2010
2011
2012
2013
PRESS CONFERENCE | APRIL 2, 2014
Employer of Choice
Results of group-wide Employee Opinion Survey
Active Leadership
Employee Engagement
(Scale 0-100)
(Scale 0-100)
72
70
60
58
2009
2013
2009
2013
PAGE 4
STRUCTURAL MARKET TRENDS
Our markets are affected by four major actionable global trends
Continued global trade
Acceleration of
growth but shift in pattern eCommerce and more
demand for last-mile
solutions
Growth in long-haul trade More “fine distribution“
and transport slowing
and direct shipping,
also in B2B
down
Importance of emerging
markets still increasing
PRESS CONFERENCE | APRIL 2, 2014
Multi-channel delivery
for B2C
Accelerating impact of Increasing demands for
process technology and responsible business
automation
Automation drives
efficiencies
Importance of data
leads to new ways of
running businesses
Increasing importance of
social and ethical
behavior
Growing need for greener
solutions
PAGE 5
NEW STRATEGIC PLAN BUILDS ON SUCCESSFUL BASE
Our DPDHL Corporate Framework remains valid
Our Strategic Plan
Vision
Die Post für Deutschland,
The Logistics Company for the World
Mission
Excellence. Simply delivered.
Purpose
We connect people, improving their
lives.
Guiding Principles
Goals
PRESS CONFERENCE | APRIL 2, 2014
Respect & Results
STRATEGY 2020
Focus.
Connect.
Grow.
3 Bottom Lines &
Living Responsibility
PAGE 6
OUR STRATEGY 2020.
Focus.
We focus on what has made us
successful…
1
Logistics as our core
Committed to the needs
2 of our stakeholders &
our planet
A family of
divisions
3
… to further expand margins.
PRESS CONFERENCE | APRIL 2, 2014
Connect.
We connect across the
organization…
1
A global team
Certified specialists
2 for everything
we do
Connected approach in
operations, commercial,
3
green solutions and
shared
services
… to
achieve
quality leader… to achieve quality leadership
and service excellence.
Grow.
We expand in new
segments…
Leader in eCommerce
1 related logistics
Accelerate footprint
shift towards
2
emerging markets
Tap new market
opportunities for
3 organic expansion
… to achieve sustainable
above-market growth.
PAGE 7
We focus
on what has made us successful
to further expand margins.
PRESS CONFERENCE | APRIL 2, 2014
PAGE 8
We focus on what has made
us successful…
The rationale behind FOCUS.
1
Logistics as our core
Logistics continues to be an attractive industry
offering high growth and returns.
2
Committed to the needs
of our stakeholders &
our planet
Our focus on success criteria which are relevant
for our stakeholders has proven effective and will
remain so in the future.
3
A family of divisions
We want each division to be excellent in its focus
areas.
… to further expand margins.
PRESS CONFERENCE | APRIL 2, 2014
PAGE 9
LOGISTICS MARKETS OFFER ATTRACTIVE GROWTH
Plenty of room to grow within logistics market1)
Market share DPDHL in total
logistics market2)
4%
Share of market with
significant DPDHL presence3)
19%
Attractive growth in key addressable market segments within logistics
Estimated Market CAGR 2011‒2020
+5-7%
Parcel Germany
+8%
Parcel Domestic
International
+5-6%
International
Express
+2-3%
+4-5%
Air Freight
Forwarding
Ocean Freight
Forwarding
+5-6%
Contract
Logistics
1) 2011 data; 2) i.e. Global SameDay/ Courier, Parcel, Express, AFR, OFR, Ind. Proj., LTL, FTL and Cont. Logistics; 3) i.e. >5% market share (in value) in respective market
PRESS CONFERENCE | APRIL 2, 2014
PAGE 10
WE REMAIN COMMITTED TO OUR LETTER BUSINESS
IN GERMANY
“The Post for Germany”
1
Deutsche Post business and brand remain a key pillar for the Group.
2
Over the last years, substantial investments in physical infrastructure
and digital services have been made.
3
The efforts of the past years are paying off, and we remain committed.
“MAIL” Division is ready for new opportunities in eCommerce & Parcel.
“MAIL” Division becomes “Post - eCommerce - Parcel” Division (PeP).
PRESS CONFERENCE | APRIL 2, 2014
PAGE 11
COMMITTED TO THE NEEDS OF OUR STAKEHOLDERS
Customer Satisfaction
(Scale from 0-100) 70‒78
70‒79
2010
2013
Min. 80 Consistently
>80
group-wide
2015
2020
C 2 efficiency
improvement:
Provider
of of
Choice
Provider
Choice
Investment of Choice
EBIT
(in EUR bn)
0.23
2.86
3.35‒3.55
2009
2013
2015
PRESS CONFERENCE | APRIL 2, 2014
GoGreen
+30% (by 2020)
Employer of Choice
>8%
CAGR
2020
Employee Engagement & Active Leadership
(% favorable votes)
Consistently
58‒61
70‒72
min. 80
>80
2009
2013
2015
2020
PAGE 12
A FAMILY OF DIVISIONS
One global team
Lean Corporate Center
A team: Professional, diverse,
and in tune with market needs
Focus on governance/ ownership tasks
Stand alone divisions
Connected by a common management
approach
Customer Solutions & Innovation
Selective Group-wide shared functions and services
PRESS CONFERENCE | APRIL 2, 2014
Joint key account management and
focused shared service unit
PAGE 13
We connect
across the organization to achieve
quality leadership and service excellence.
PRESS CONFERENCE | APRIL 2, 2014
PAGE 14
We connect across the
organization …
The rationale behind CONNECT.
1
A global team
A highly professional and diverse management
group is essential in order to meet the rising bar.
2
Certified specialists
for everything we do
Best-in-class team to achieve quality leadership
and improve leadership.
3
Connected approach in
operations, commercial,
green solutions and shared
services
An approach leveraging our global platform to
create value as a Group (i.e. support and
connections but no integration).
… to achieve quality leadership and
service excellence.
PRESS CONFERENCE | APRIL 2, 2014
PAGE 15
PROVEN CIS PROGRAM EXTENDED GROUP-WIDE
Facts & Figures
DHL CIS Program
Integrating continuous
process optimization
Pioneer DHL Express
Certified Specialist
Trainings Targets
Group implementation
100,000 Certified International
Specialists since Dec. 2011
„The First Choice Way“ becomes
part of „Certified“
Target state is >80% of all staff
trained until 2020
Delivered in >40 languages by
1,800 DHL Express employees
that are trained as facilitators
Combination of:
Executives
100%
Modular platform for each
country and function
- Class room sessions
Managers
>90%
- On the job training
Supervisors & Staff
>80%
- Specialized application
PRESS CONFERENCE | APRIL 2, 2014
PAGE 16
LEVERAGE PRE-EMINENT INTERNAL SKILLS
Sorting
Capability building and stronger
leverage across Group
Obertshausen Parcel site as
pilot to enhance expertise
PRESS CONFERENCE | APRIL 2, 2014
Automation/ Robotics
Automation agenda with crossdivisional Operations Board to
review divisional activities
Data Analytics
Pilots to solve divisional
business issues and mine
DPDHL data
Divisions to drive pilots and
applications
PAGE 17
LEVERAGE EXCELLENCE IN GREEN LOGISTICS
SOLUTIONS
Target 2020
C 2 efficiency:
+30%
Focus today:
1 GoGreen Efficiency
Success examples
• First efficiency target, carbon
accounting and controlling in
industry
• Role modeling in alternative fleet
• Climate-neutral shipping
• Driving industry standards
PRESS CONFERENCE | APRIL 2, 2014
Next development level:
2 GoGreen 2.0 – GoGreen Solutions
Make a difference with
customers
Action areas
• Commercialize green products
and services
• Focus on optimizing customer
supply chains
• Help customers achieve CO2 and
efficiency aspirations
PAGE 18
We expand
in new segments to achieve
sustainable above-market growth.
PRESS CONFERENCE | APRIL 2, 2014
PAGE 19
We expand in new segments…
The rationale behind GROW.
1
Leader in eCommerce
related logistics
We want to create value by utilizing our existing
capabilities to build new businesses and grow
organically.
2
Accelerate footprint shift
towards emerging
markets
We want to continue being a leader in fast growing
markets.
3
Tap new market opportunities
for organic expansion
We want to serve changing customer needs and
tap new sources of growth.
… to achieve sustainable abovemarket growth.
PRESS CONFERENCE | APRIL 2, 2014
PAGE 20
EMERGING MARKETS CONTINUE TO GROW STRONGER
Macro trends continue to support high
growth in emerging markets
• Demographics, e.g. India and China to
provide >50% of increase in global
workforce with college education by 2030
Growth differential expected to continue
GDP, real, CAGR 2011-2020e
2.0
• Continuing urbanization, e.g. in China
expected to reach 70% by 2030
• Growing consumer base, e.g. global
middle class set to grow 2.6 fold by 2030
with 90% coming from Asia Pacific
PRESS CONFERENCE | APRIL 2, 2014
5.4
‒ in % ‒
Mature Markets
•
•
•
•
•
USA
UK
Japan
Western Europe
…
Emerging Markets
•
•
•
•
•
China
India
Brazil
South East Asia
…
PAGE 21
OUR AMBITION FOR THE EMERGING MARKETS
Group revenue footprint
78%
70%
22%
30%
Today
2013
Mature Markets
PRESS CONFERENCE | APRIL 2, 2014
30% emerging
market footprint is
ambitious but
realistic
Target
2020 target
Emerging Markets
PAGE 22
LEADER IN eCOMMERCE-RELATED LOGISTICS
eCommerce trend is a structural growth trend for logistics businesses
•
Domestic Parcel business driving strong eCommerce growth in Germany
•
International domestic and cross-border parcel activities already in DHL portfolio
Opportunity to expand eCommerce and parcel activities internationally
MAIL Division becomes “Post - eCommerce - Parcel” (PeP)
Leveraging its two strong brands
PRESS CONFERENCE | APRIL 2, 2014
PAGE 23
The Post for Germany and
the global eCommerce enabler
PRESS CONFERENCE | APRIL 2, 2014
PAGE 24
KEY BUILDING BLOCKS OF PeP BUSINESS STRATEGY
Our guiding principles:
Internationalization
We offer innovative
services based on
our our core
competencies
We are the
trusted
communications
and targetoriented
advertising
provider – online
& offline
Digital
Defend physical mail
Enter into the digital world
Restructure international
business
Diversification
Develop eCommerce to drive
parcel
Physical mail
PRESS CONFERENCE | APRIL 2, 2014
Parcel /
e-Commerce
We are the
leading parcel
and
eCommerce
service provider
Diversify based on core
competences
PAGE 25
OVERALL UNCHANGED VOLUME TRENDS IN GERMANY
Volume Development
•
in bn items
7.96
7.82
Mail
Communication
•
2009
2013
•
•
10.90
9.75
Dialogue
Marketing
2009
PRESS CONFERENCE | APRIL 2, 2014
2013
Overall volumes in Mail
Germany declined at an
average rate of only 1.8%
through Strategy 2015
Mail Communication
benefitted from discontinuation
of product „Infobrief“ in 2013
Dialogue Marketing volumes
continue to be under pressure
Parcel Germany continues to
show strong development.
Market growth rates should
come down slightly (expected
CAGR ~ 6%)
in bn items
1.026
Parcel
Germany
0.761
2009
Mail
Germany
2013
21.16
19.65
2009
2013
PAGE 26
PeP: PERFORMANCE & HIGHLIGHTS STRATEGY 2015
PeP Strategy 2015:
We‘ve put down solid roots for future growth
Investment
of Choice
2009
2010
2011
2012
2013
2014
2015
Estimate
EBIT
EUR bn
Employer
of Choice
Provider
of Choice
1.4
1.1
1.1
1.21)
1.2
~1.2
≥ 1.1
Customer
Satisfaction
93%
93%
95%
96%
95%
95%
≥ 95%
Employee
Satisfaction
66%
74%
76%
77%
76%
80%
≥ 90%
1)excluding VAT impact EUR 151m
PRESS CONFERENCE | APRIL 2, 2014
PAGE 27
STRATEGIC EVOLUTION OF PeP DIVISION
› 2007
› 2014
Restructuring
Stabilization of the traditional letter mail business
and build-up of domestic parcel operations
„Defend Germany“
Domestic mail volume development stabilized
- e-substitution remains the key challenge long-term
E-Post established in the market for digital
communication
Strategic realignment of Global Mail completed
Successful build-up of “DHL Paket” as innovation and
market leader in Germany
Appointment of PeP Division as global lead division
for eCommerce logistics services!
PRESS CONFERENCE | APRIL 2, 2014
› 2020
Growth
Internationalization of the successful German “Parcel
Strategy”
Transfer of domestic parcel business in Poland,
BeNeLux, Czech Republic and India to PeP
Expansion and entries into additional domestic parcel
markets in APAC/ Americas
Stabilisation of classic letter mail operations remains a
key challenge
Expansion of digital services
Increase profitability in Mail Communication
Vision: Global No. 1 eCommerce service provider
PAGE 28
eCOMMERCE ACCELERATION: OPPORTUNITY & THREAT
Opportunity
Threat
Parcel domestic market revenue
2011
2020
Emerging Markets
+11% p.a.
Mature Markets
+7% p.a.
Mainland China
+15% p.a.
Global CAGR 2011‒2020:
PRESS CONFERENCE | APRIL 2, 2014
+8%
Logistics companies
venturing into
eCommerce to
support logistics
eCommerce
companies venturing
into logistics to
support
eCommerce
New competitors entering the market
PAGE 29
MAIL DIVISION BECOMES “Post - eCommerce - Parcel”
Two main businesses, leveraging their existing strong brands
Sub-division Post
Sub-divisiion
eCommerce & Parcel
The Post for Germany
The global eCommerce enabler
includes
• Mail Communication
• E-Post
• Dialogue Marketing
• Presse Services
• Export/Import Germany
includes
• Germany
• Europe
• International
• Cross-Border/Intercontinental
Brand power, expertise and resources necessary to meet our ambitious growth targets
PRESS CONFERENCE | APRIL 2, 2014
PAGE 30
DHL PAKET SUCCESSFUL MODEL IN GERMANY
Consumer centric innovation leader on the first and last mile in Germany
EXAMPLES
DHL Paketshops
Packstation
Shopping platforms
PRESS CONFERENCE | APRIL 2, 2014
Private parcelbox
Grocery delivery
Evening delivery/
Flexible delivery
PAGE 31
eCOMMERCE & PARCEL: SERVICE PORTFOLIO
eFACILITATION
eFULFILLMENT
DELIVERY
50
40
•
•
•
Marketplaces
Marketing services
Payment solutions
• Domestic eFulfillment
(incl. value added
services)
• In collaboration with
DHL Supply Chain
0
30
CROSS-BORDER
eCOMMERCE
10
20
• Multichannel
domestic delivery
and return1)
• International B2C
shipping
• Combined with int‘l
eFulfillment and
eFacilitation services
1) Incl. intra-EU delivery and return
PRESS CONFERENCE | APRIL 2, 2014
PAGE 32
SUBDIVISION DHL “eCommerce & Parcel”
The key element of future profit growth
DHL Parcel
Parcel Germany
• Continue success
story
• Expand and innovate
production capacity
• Invest in new service
features, e.g. private
parcelbox,
allyouneed.com
PRESS CONFERENCE | APRIL 2, 2014
Parcel Europe
• Leverage & invest in
businesses transferred
from DHL(BeNeLux,
PL, CZ)
• Re-orient and broaden
service offering
towards B2C
• Gradually expand
European coverage
DHL eCommerce
Americas
Asia
• Build on existing businesses
– Global Mail US
– Blue Dart India
• International B2C shipping services/ Domestic
and destination based eFulfillment as a start in
emerging markets
• Aspiration: Integrated offer of all eCommercerelated logistics and eFacilitation services
PAGE 33
OUR ASPIRATION:
LEADER IN eCOMMERCE-RELATED LOGISTICS
Our Aspiration for 2020
Our assets to get there
Further grow and maintain No. 1 position
in Germany
• Passion to win
No. 1 for x-border eCommerce services on
most attractive international trade lanes
• Great entrepreneurs
Top 3 of domestic B2C delivery and
eCommerce logistics in selected markets
PRESS CONFERENCE | APRIL 2, 2014
• Love for our customers
• Strong brands
• World-class processes
• Support by ”family of divisions”
PAGE 34
Financial outlook & aspiration
PRESS CONFERENCE | APRIL 2, 2014
PAGE 35
FINANCIAL PERFORMANCE 2009-2013
2.7
2.4
1.8
Strong increase in Group EBIT
2.861
0.2
‒ in EUR bn‒
2009
2010
2011
2012
2013
Supported by strong EBIT performance in all Divisions
1,391
2009
1,226
2013
MAIL/PeP
1,133
483
174
-790
2009
2013
-216
2009
EXPRESS
2013
2009
FORWARDING,FREIGHT
2.500
441
‒ in EUR mn‒
2013
SUPPLY CHAIN
1.6
1.500
Driving turnaround in Free Cash Flow
0.5
0.7
0.7
500
‒ in EUR bn‒
-500
-0.2
-1.500
2009
2010
2011
2009
2010
2011
1) Adjusted for non-recurring items
PRESS CONFERENCE | APRIL 2, 2014
1)
20121) 2013
2012
2013
PAGE 36
FINANCIAL OUTLOOK AND ASPIRATIONS
Further revenue and earnings growth expected
Investments to remain at current levels to take full advantage
of attractive growth opportunities
Free Cash Flow generation to continue positive and
increasing
Financial policy unchanged
PRESS CONFERENCE | APRIL 2, 2014
PAGE 37
2020 TARGETS
2015 EBIT targets confirmed, new 2020 targets introduced
EBIT
2013 base1)
FY 2015
FY 2020
PeP2)
EUR 1.286bn
Min. EUR 1.1bn
~3% CAGR 2013-2020
DHL
EUR 1.997bn
EUR 2.6-2.8bn
~10% CAGR 2013-2020
CC/ Other
EUR -422m
~ EUR 350m
< 0.5% of Group revenue
Group
EUR 2.861bn
EUR 3.35-3.55bn
>8% CAGR 2013-2020
Free Cash Flow generation to remain priority
No ambition for major M&A
Finance policy including payout ratio range to remain unchanged
1)
Adjusted for 2013 EBIT of ~ EUR 60m from transfer of assets from DHL to PeP effective on Jan. 1, 2014
2)
POST - eCOMMERCE - PARCEL
PRESS CONFERENCE | APRIL 2, 2014
PAGE 38
MAJOR INVESTMENTS PLANNED FOR 2014
2014 Gross Capex guidance (EUR 1.9bn)
Major projects:
PeP
Investments into new international Parcel businesses
Continuation of Parcel 2012 investment program
EXPRESS
Network investment, mainly aviation/ aircraft
Extention Leipzig Hub
FORWARDING,
FREIGHT
New Forwarding Environment
SUPPLY
CHAIN
Significant new business wins
PRESS CONFERENCE | APRIL 2, 2014
PAGE 39
NO CHANGE IN M&A STRATEGY
Goal
Continued focus on organic growth
Recent M&A history
(in EUR m)
2009
M&A Objectives
Bolt-on acquisitions to support strategies and new
growth initiatives of divisions
Further small disposals where necessary to
optimize divisional business portfolios
2010
2011
2012
2013
0
-100
-200
-300
-400
Conclusion
No significant increase in M&A spend expected
Net cash from M&A
Cash-out related to disposal of domestic Express activities
PRESS CONFERENCE | APRIL 2, 2014
PAGE 40
FREE CASH FLOW DEVELOPMENT 2009-2013
Turnaround in FCF generation lays base for further improvement
Major drivers:
OCF
Net Capex
Net Cash from M&A
FCF
(in EUR m)
2.500
2,500
1,500
1.500
500
-500
-1.500
-1,500
1)
2009 2010 2011 2012 2013
2009 2010 2011 2012 2013
2009 2010 2011 2012 2013
1)
2009 2010 2011 2012 2013
1) Adjusted for non-recurring items
PRESS CONFERENCE | APRIL 2, 2014
PAGE 41
CONFIRMATION OF FINANCE POLICY
Target/ maintain rating BBB+
Deployment of Free Cash Flow
Dividend payout ratio to remain between 40-60% of net profit (continuity and Cash Flow performance
considered)
Excess liquidity will be used for
Stepwise pension funding
and/ or
Share buybacks and/or extraordinary dividends
PRESS CONFERENCE | APRIL 2, 2014
PAGE 42
Recap Strategy 2020
PRESS CONFERENCE | APRIL 2, 2014
OUR STRATEGY 2020.
Focus.
We focus on what has made us
successful…
1
Logistics as our core
Committed to the needs
2 of our stakeholders &
our planet
A family of
divisions
3
… to further expand margins.
PRESS CONFERENCE | APRIL 2, 2014
Connect.
We connect across the
organization…
1
A global team
Certified specialists
2 for everything
we do
Connected approach in
operations, commercial,
3
green solutions and
shared
services
… to
achieve
quality leader… to achieve quality leadership
and service excellence.
Grow.
We expand in new
segments…
Leader in eCommerce
1 related logistics
Accelerate footprint
shift towards
2
emerging markets
Tap new market
opportunities for
3 organic expansion
… to achieve sustainable
above-market growth.
PAGE 44
OUR ASPIRATION FOR 2020: DEFINING OUR INDUSTRY
When people think of logistics,
we want them to think DPDHL
WE are the most global
WE are the quality leader
WE are most customer-centric
PRESS CONFERENCE | APRIL 2, 2014
PAGE 45
PRESS CONFERENCE
FRANKFURT AM MAIN, APRIL 2, 2014