DHL revenue up by 1.8% to €61.6bn in 2018

DHL’s revenue was up by 1.8% to €61.6bn in 2018. All four Group divisions contributed to the positive trend. Growth was driven by the ongoing boom in e-commerce as well as sustained growth in international trade flows. The Group’s EBIT came to €3.2bn and thus reached the adjusted earnings target communicated in June 2018.

The Post – eCommerce – Parcel division reported revenue growth of 1.7% to €18.5bn in 2018, this was attributed to higher revenue in the eCommerce – Parcel business unit. In full-year 2018, PeP delivered €1.5bn parcels in Germany, an increase of 7.5% compared to 2017 as well as a new record. Revenue at DHL eCommerce climbed by 6.9%. DHL intends to use its new DHL eCommerce Solutions division to take advantage of the potential offered by the e-commerce market.

In the Post business unit, revenue dropped to €9.7bn. The decrease was the result of structural volume declines in Mail Communication and Dialogue Marketing. However, the volume declines remained within the range of the long-term projections. EBIT for the PeP division came to €656m in the past financial year. The one-time expenses incurred to secure the EBIT growth projected for the coming years were the main factor contributing to the decrease. Announced in mid-2018, the steps planned are primarily intended to improve productivity, reduce indirect costs and drive active yield management in the post and parcel business.

In the Express division revenue climbed by 7.3% to €16.1bn. The increase was even greater on an organic basis at 11.0%. This performance was once again driven by strong growth in the international time-definite (TDI) delivery business, where daily volumes rose by 7.4% compared with the prior-year period. The volume increase enabled the division to utilise its unique global express network even more efficiently.

The Global Forwarding, Freight division can look back on a positive year in 2018. The division increased revenue by 3.4% to €15bn despite focusing on only high-margin business. Gross profit, which is an important performance indicator for Global Forwarding, Freight, also performed strongly with an increase of 3.9% over the prior year to €3.6bn. The division registered gross profit margin improvements in both air and ocean freight. Road and rail transport in Europe also showed a positive development.

Revenue in the Supply Chain division came in at €13.4bn in 2018 (2017: EUR 14.2 billion). In addition to negative currency effects, the revenue decline mainly reflects the sale of the subsidiary Williams Lea Tag. DHL Supply Chain continued to generate additional new business, closing additional contracts worth €1.3bn with both new and existing customers in financial year 2018. Operating profit amounted to €520m, down from €555m in the previous year. The decline was attributable to one-time negative effects of €50m from customer contracts and €42m from pension obligations. Adjusted for these factors and the one-off effect resulting from a write-down of customer relationship assets in the previous year’s result, EBIT improved by 4.3%. 

Deutsche Post DHL Group invested in future growth once again in 2018. As planned, a total of €2.6 bn was spent on investments across all four divisions. The company expanded and modernised its domestic parcel infrastructure and invested in the vehicle and aircraft fleets, as well as its hubs in Brussels, Madrid and Hong Kong. It is planning to increase capital expenditure to around EUR 3.7bn in 2019. This includes €1.1bn for the debt-financed renewal of the Express aircraft fleet announced last year.

“2018 was a challenging year for Deutsche Post DHL Group, which we closed with a successful Christmas business. Despite rising geopolitical uncertainties, global trade continued to register growth. This benefitted our DHL divisions in particular. In our German post and parcel business, we initiated measures to secure the division’s long-term EBIT growth – and we consciously accept that this comes with a short-term burden on EBIT,” said Frank Appel, CEO of Deutsche Post DHL Group, “We have thus created the conditions for reaching our 2020 targets and for continuing to grow profitably in the years thereafter.”

DHL is expecting significant EBIT increase for 2019, projecting an increase of between €3.9bn to €4.3bn. Structural and operating improvements in all divisions are expected to contribute to the increase. Among the measures implemented were the changes made to the structure of Deutsche Post DHL Group effective 1 January 2019. The previous Post – eCommerce – Parcel (PeP) division was split into two separate divisions: The new Post und Paket Deutschland (P&P) division focuses on the mail and parcel business in the domestic market, while international parcel and e-commerce activities have been combined to form the new DHL eCommerce Solutions division. The P&P division is expected to contribute between €1bn to €1.3bn to DHL’s projected EBIT for 2019. The group’s EBIT is projected to rise to at least €5.0bn in 2020.

Source: Deutsche Post DHL Group