Börse München & DSW. Münchener Tischgespräch 17 November 2016 Dr Tjark Schütte, Investor Relations

Transcription

1 Börse München & DSW Münchener Tischgespräch 17 November 2016 Dr Tjark Schütte, Investor Relations

2 AGENDA 1 Growth agenda 2 Q3 Financial results & Guidance PAGE 2

3 GROUP: ORGANIZATIONAL SETUP Group Corporate Divisions Group revenues 1) : 59.2bn Group EBIT 1) : 2.411bn Market capitalization 2) : 31.5bn Approximately 500,000 employees in more than 220 countries/territories Post - ecommerce- Parcel Express Global Forwarding Freight Supply Chain 62% market share in letter mail, 44% market share in German parcel market, selected int l parcel activities Sales: EUR 16,131m EBIT: EUR 1,103m Empl. 4) : 169,430 Global Time-Definite- International (TDI) leader with 34% market share. Sales: EUR 13,661m EBIT: EUR 1,391m Empl. 4) : 79,318 World s largest Air and 2nd largest Ocean freight forwarder, No. 2 in European road freight Sales: EUR 14,890m EBIT: EUR -181m Empl. 4) : 44,588 Global market leader, market share of 7.4% well ahead next biggest competitors. Sales: EUR 15,791m EBIT: EUR 449m Empl. 4) : 145,827 Corporate Center / Other: Sales: EUR 1,269m; EBIT: EUR -351m Brands 1) Financial year 2015; 2) As of 12/31/2015; 3) TEU = Twenty-foot equivalent unit 4) Average FTEs FY 2015 PAGE 3

4 MARGIN MOMENTUM IN ALL DIVISIONS PeP: From stabilization to EBIT growth Asset intensive: Express DHL: building momentum towards 2020 targets Asset light: DGFF and DSC EUR 1bn in EUR m 1,120 1,107 1,048 1,286 1,298 1,103 > 1,300 EBIT margin 1) 10.7% EBIT margin 1) 2.7% 3.5% 1.8% 1.8% 4.4% EUR 1 bn min. EBIT target ~3% EBIT CAGR Q Express Q Q Q DSC DGFF 1) Rolling 12 month EBIT margins, DGFF adjusted for NFE write-off in Q PAGE 4

5 STRATEGY 2020: INDUSTRY GROWTH ASSUMPTIONS GDP growth assumptions Attractive growth in key addressable market segments within logistics +2% +5% Estimated Market CAGR Mature Regions Emerging Markets +5-7% +8% +5-6% +2-3% +4-5% +5-6% Parcel Germany Parcel Domestic International International Express Air Freight Forwarding Ocean Freight Forwarding Contract Logistics Main Strategic Drivers Revenue mix shift to parcel and increased exposure to e-commerce structural growth trend Continued focus on TDI with network, efficiency and scale effects Improve Forwarding operating performance while implementing step by step IT renewal Standardization, overhead leverage and contract portfolio enhancement PAGE 5

6 E-COMMERCE IS THE KEY DRIVER OF OUR SUCCESS STORY OVERALL GROWTH IN GERMANY Revenue of Distance Selling Market 1) in bn EUR Market share DHL Parcel Germany 3) in percent % % +5 pp % CAGR Traditional Distance Selling E-Commerce ENABLED BY A CLEAR MARKET LEADER: DHL PARCEL DHL Parcel Germany vs Market, in percent 6,9 Germany Market Revenue CAGR 8,6 Online-shop usage of Shipping Provider 2) in percent (multiple answers possible) 70 DHL Parcel Germany Average Volume Growth 9,9 DHL Parcel Germany Revenue CAGR 20% Others 3 Source: MRU bevh Studie Source: HDE/bevh Interaktiver Handel in Deutschland Statements of German online-shops, which shipping provider they use for their e-commerce business; Source: Händlerbund 2016 PAGE 6

7 GERMAN MARKET LEADERSHIP BASED ON A BROAD CUSTOMER PORTFOLIO Business Customers (B2X) Revenue growth % 2.6 Top accounts ( 300 companies) Medium accounts ( 16,000 customers) Revenue 2015 DHL Parcel (in EUR bn) Revenue growth (in %) 9% 15% B2X Market DHL Parcel Small accounts ( 63,000 customers) % 8.7% B2X Market B2X revenue grew 2015 above the market in all segments, esp. with small customers PAGE 7

8 EXPRESS GROWTH SUPPORTED BY BALANCED GLOBAL FOOTPRINT Quarterly growth ranking, TDI volume growth #1 EU EU EU EU AM AP AP AP EU EU MEA AM AP AP MEA EU MEA EU EU #2 #3 #4 AP AM AM AM AP EU EU EU AP MEA AP AP MEA AM AM MEA EU MEA MEA AM AP AP AP EU MEA MEA AM MEA AP MEA MEA MEA MEA MEA AM AM MEA AM AM AM EU AM MEA AP AP AP AP AP EU MEA EU EU EU AM AM AM AM EU AP MEA EU AM AP AM EU AP AM EU MEA AM MEA MEA AP Consistent strong volume growth in global TDI network Constant variation in regional patterns reflects movements in global trade flows Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q % +9.4% +8.4% +7.8% +8.7% +7.7% TDI Shipments/ day EU Europe MEA Middle East Africa AM Americas AP Asia Pacific PAGE 8

9 DHL EXPRESS: GLOBAL TDI MARKET SHARES Continued TDI leadership across all regions outside the Americas Americas [EUR 6.8bn ] +1% 18% 32% 3% 1% 46% Europe [EUR 6.0bn] 12% 10% 41% 12% +1% 25% Asia Pacific [EUR 6.8bn] 21% 4% 44% 11% +2% 20% Global [EUR 20.1bn] +x% Change vs 2012 MI study DHL TNT UPS FedEx Others 6% 12% 34% Source: MI study 2014 EU : AT, DE, DK, ES, FR, IT, NL, RU, TR, UK AM : BR, CA, CL, CO, CR, GT, MX, PA, PE, US AP : CN, HK, IN, JP, KR, SG GLOBAL : EU + AM + AP + (AE + SA + ZA) 22% 26% +1% PAGE 9

10 AGENDA 1 2 Growth agenda Financial results Q & Guidance PAGE 10

11 Q HIGHLIGHTS in EUR m 2020: >8% CAGR 2) Q3 confirms strong progress in operating performance building momentum towards 2020 targets 4,000 3,000 2,000 2,411 3,700 3,400 PeP: Growth in Parcel drives EBIT increase in Germany; investments into international Parcel expansion continue Express: confirmation of strong EBIT growth track record, supported by e-commerce growth and yield management DGFF: turnaround progressing, IT renewal continuing according to plan DSC: good operating performance in Q3 while 2016 restructuring spend nears completion 1,000 1) 1) 1) 1) ) underlying EBIT; 2) as per base year 2013 Strategy 2020: Leverage structural growth trends Drive further internal profitability improvement Well on track to deliver on 2016 guidance despite continued weak economic tailwinds PAGE 11

12 GROUP P&L Q EUR m Q Q Chg. Management comments Revenue 14,424 13, % EBIT >100% t/o PeP >100% t/o DHL >100% Reported growth again constrained by FX effects, lower fuel prices and NHS accounting change, group revenue up 2.4% excl. these effects Besides non-recurrence of one-off effects from 2015 transition year, strong operating progress in all divisions Parcel growth and strict cost discipline drive EBIT increase in Germany; investments into international Parcel expansion continue Good operating performance in all three DHL divisions as well as non-recurrence of major one-offs from previous year Financial result % Supported by lower interest cost on provisions and FX effects Taxes % 9M tax rate at 11%, reflecting lowered full year projection Cons. net profit 1) >100% EPS (in EUR) 2) >100% Strong increase driven by structural e-commerce growth and successful EBIT turnaround from 2015 transition year 1) Attributable to Deutsche Post AG shareholders; 2) Undiluted PAGE 12

13 EBIT OVERVIEW: Q3 & YTD Well on track to deliver on 2016 guidance despite continued weak economic tailwinds EBIT, in EUR m Q Q Change 9M M 2016 Change PeP >100% % Express % 1,072 1, % Forwarding, Freight n.a n.a. Supply Chain Group >100% 1,454 2, % PAGE 13

14 PeP: STRUCTURAL GROWTH IN PARCEL GERMANY DRIVEN BY E-COMMERCE MEGATREND m EUR Parcel Germany revenue Q % Q Parcel Germany volumes m units Q % Q Continued strong volume growth in Germany reflects structural shift of retail towards e- commerce Moreover, strict pricing discipline and focus on profitability support the overall revenue development Parcel Germany, volume growth, yoy 9,8% 9,8% 8,7% 9,4% 7,4% 7,0% m ) Strategy 2020 market volume growth assumption ( ) 1) 5-7% E-commerce provides sustainable growth opportunity - spread across our broad business customer portfolio Superior service quality and network strength as well as continuous innovation are key drivers to keep extending market leadership PAGE 14

15 PeP: LEVERAGING STRUCTURAL E-COMMERCE GROWTH BY EXPANDING PARCEL NETWORK OUTSIDE GERMANY Parcel Europe revenue 1) DHL ecommerce revenue 2) m EUR +13.3% % Q Q Q Q ) Parcel Europe ex Germany; 2) Parcel outside Europe m EUR European coverage of currently 18 countries to be extended Beginning of 2017: shift of Iberia Day- Definite from DHL EXP to PeP Asset shift DHL to PeP B2C market entry Stake in Relais Colis UK Mail offer Partnerships Continued strong increase in international revenues reflects growth in international domestic and cross-border volumes as well as gradual expansion of our capabilities and coverage Growth momentum confirms appreciation of DHL brand and service quality in international Parcel markets International expansion further extends our value proposition for e-vendors Strong cross-border growth opportunity as e- commerce goes beyond national borders Selective, flexible expansion of our harmonized European product PAGE 15

16 EXPRESS: STRONG VOLUME GROWTH CONTINUES, ALSO SUPPORTED BY GROWTH IN E-COMMERCE Time Definite International (TDI) 1) - Revenues per day m EUR +5.3% Time Definite International (TDI) - Shipments per day 000s +6.8% Q Q Q Q ) Currency translation impacts are eliminated. Data aggregated with same currency rate TDI shipments per day growth, yoy Americas with highest TDI volume growth at +10.0%, followed by Europe (+9.8%), MEA (+4.9%) and Asia/Pacific (+3.0%) Revenue increase remains below volume growth due to lower fuel surcharge, but gap reduced vs H1 reflecting good yield management Cross-border e-commerce has developed into an additional growing TDI market vertical 10,2% 9,4% 8,4% 7,8% 8,7% 7,7% +5-6% 2) >10% Portion of B2C TDI shipments* >20% * e-commerce info based on medium to large B2C customers of top 30 countries and represent indications m ) Strategy 2020 market volume growth assumption ( ) DHL Express also further extending market leadership in classic B2B verticals driven by best-in-class international network PAGE 16

17 GLOBAL FORWARDING, FREIGHT: SELF-HELP IN STILL CHALLENGING MARKETS AFR 000s Tons +1.5% ) Twenty Foot Equivalent Unit OFR 000s TEU Q Q Q Q Ocean & Air Freight Volume, yoy growth 2) Strategy 2020 market volume growth assumption ( ) +3.6% Solid growth in Ocean Freight volume for third consecutive quarter First quarter with yoy growth in Air Freight volumes since Q Growth approach remains disciplined as internal self-help agenda remains primary focus OFR vol AFR vol AFR and OFR volumes weak since 2011, 2) reflecting slowing world trade 0% -1% 4% 5% 2% 3,1% Ocean: +4-5% Air +2-3% 2) -1% 0% -5% -5% -8% -4,7% m ) DGF volume performance recovering from NFE issues and very selective approach in 2015 PAGE 17

18 SUPPLY CHAIN: SOLID GROWTH SUPPORTED BY OUTSOURCING TREND 6% 3% Organic revenue growth, yoy 6% 4% 5-6% 2) 1) 1) 2% 2% Consistent topline growth reflecting contractbased business model Q3 growth driven by Asia Pacific in particular Increased use of outsourcing drives long-term supply chain industry growth ahead of GDP M 16 1) Adjusted for change in accounting treatment of NHS contract in Q4 15 / 9M 16 2) Strategy 2020 market volume growth assumption ( ) New Contract Signings m EUR M 16 3) Annualized revenue, as of 2014 incl. Williams Lea 3) New business wins of EUR 306m in Q3 especially in Retail, Consumer and Technology Stable track record of new signings well in excess of EUR 1 bn / year Focus of new signings is not on the absolute annualized revenue, but on potential value add and profitability PAGE 18

19 EBIT GUIDANCE CONFIRMED 2016 TAX RATE LOWERED EUR bn base 1) PeP > 1.3 ~ 3% CAGR DHL ~ 10% CAGR CC/Other ~ < 0.5% of group revenue Group > 8% CAGR FY 2016: Free Cash Flow (excl. EUR 1bn pension funding recognition) to exceed dividend payment (FY15 dividend) Tax rate ~11% (from ~ 14%) Gross Capex of around EUR 2.2bn 1) adjusted for 2013 EBIT of ~EUR 60m from transfer of assets from DHL to MAIL effective on Jan 1, 2014 PAGE 19

20 DPDHL GROUP FINANCE POLICY, UNCHANGED Deployment of Free Cash Flow FINANCE POLICY Dividend of EUR 0.85 for FY2015 i.e. dividend payments of EUR ~1.03bn to DPDHL shareholders on May 19, % % % % % % % Underlying Payout Ratio 1) 40% Target / maintain rating BBB+ Dividend payout ratio to remain between 40 60% of net profit (continuity and Cash Flow performance considered) Excess liquidity will be used for share buybacks and/or extraordinary dividends and/or potential additional pension funding (if not by other means) 1) Adjusted for Postbank effects as well as non-recurring items PAGE 20

21 WRAP-UP Despite a low-growth macro environment we can leverage structural growth trends to foster sustainable, above market growth E-commerce is the most important structural growth driver and we have a unique set of divisional capabilities and assets to serve this megatrend We maintain our focus on internal improvements, yield, and innovation to foster ongoing margin and absolute EBIT improvement FCF generation remains key as it supports our capex plans, shareholder return and unchanged finance policy Strategy 2020 in full execution: significant steps achieved towards becoming the leader in e-commerce related logistics PAGE 21

22 Deutsche Post DHL Group Investor Relations November 2016

23 DISCLAIMER THIS PRESENTATION CONTAINS CERTAIN STATEMENTS THAT ARE NEITHER REPORTED RESULTS NOR OTHER HISTORICAL INFORMATION. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING STATEMENTS. MANY OF THESE RISKS AND UNCERTAINTIES RELATE TO FACTORS THAT ARE BEYOND DEUTSCHE POST AG S ABILITY TO CONTROL OR ESTIMATE PRECISELY, SUCH AS FUTURE MARKET AND ECONOMIC CONDITIONS, THE BEHAVIOR OF OTHER MARKET PARTICIPANTS, THE ABILITY TO SUCCESSFULLY INTEGRATE ACQUIRED BUSINESSES AND ACHIEVE ANTICIPATED SYNERGIES AND THE ACTIONS OF GOVERNMENT REGULATORS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH APPLY ONLY AS OF THE DATE OF THIS PRESENTATION. DEUTSCHE POST AG DOES NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY RELEASE ANY REVISIONS TO THESE FORWARD- LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS PRESENTATION. THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR BUY ANY SECURITY, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS PRESENTATION IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW. COPIES OF THIS PRESENTATION AND ANY DOCUMENTATION RELATING TO THE OFFER ARE NOT BEING, AND MUST NOT BE, DIRECTLY OR INDIRECTLY, MAILED OR OTHERWISE FORWARDED, DISTRIBUTED OR SENT IN OR INTO OR FROM AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. THIS DOCUMENT REPRESENTS THE COMPANY S JUDGMENT AS OF DATE OF THIS PRESENTATION. PAGE 23

24 Appendix PAGE 24

25 FREE CASH FLOW Q EBIT increase drives growth in OCF and FCF EUR m Q Q Cash from operating activities before changes in Working Capital Strong EBIT performance flows well through to OCF, also taking into account that one-off effects in Q EBIT were mainly Changes in Working Capital non-cash Net cash from operating activities after changes in Working Capital Good cash inflow from working capital although below previous year due to strong WC recovery in DGF in Q Net Capex Net M&A 3-7 Decline in capex spend reflects timing of investment projects, fullyear capex guidance confirmed Net Interest -8 4 Free Cash Flow FFO/Debt at 24.9% (June 30: 25.2%) PAGE 25

26 NET DEBT (-)/LIQUIDITY (+) Q3 net debt increased by EUR 487m vs Q2 as full EUR 1 bn for SBB already taken into account -1,093 1,309 Inc. EUR -1bn pension funding effect , Incl. return of cash collateral from EU state aid EUR 378m and EUR 1bn for share buy back 1) program in EUR m -1, ,995 Net debt (Dec 31, 2015) OCF before change in W/C Changes in W/C 1) o.w. EUR 489m already executed by Sep 30 and EUR 511 liability for outstanding program Net capex Net interest Dividend Paid Net Other effects incl. M&A Net debt (Sep 30, 2016) N.B: Net pension provision increased to EUR 6.7 bn (from EUR 6.1 bn at end of Q2) due to further decline in interest rates PAGE 26

27 PENSION FUNDING EXERCISE 2016 Taking advantage of low interest rate environment to increase funding ratio with (small) positive impact on OCF and net income Bond issuance, March 23, 2016: - EUR 750m, 5-year, 0.375% coupon - EUR 500m, 10-year, 1.250% coupon 1.25bn proceeds at average coupon of 0.725% 18,225 Increase due to interest rate movement 19,113 6,091 6,721 in EUR m Total DBO Net Pension Provison Pension funding, EUR 1 bn, April 1, Accounted as utilization of provision, hence reducing Q2 OCF/FCF by the funding amount - Additional income on plan assets to reduce pension benefits payments out of OCF - Funding ratio now at 65% vs 62% at end of Q1 Expected higher income on plan assets vs. average coupon should lead to small positive effect on net income and OCF No change of debt ratings expected 12,134 12,392 Plan Assets Jun 30, 2016 Sep 30, 2016 Discount Rate Germany UK Other Total Jun % 3.00% 1.93% 2.28% Sep 30, % 2.25% 1.83% 1.91% PAGE 27

28 STABLE CAPITAL INTENSITY EXPECTED Gross Capex / Sales ratio - Group & by division 7,0% 6,0% 5,0% Gross Capex intensity, average EXPRESS ~4% PeP ~3% 4,0% 3,0% SUPPLY CHAIN ~2% 2,0% FORWARDING ~1% 1,0% 0,0% GROUP AVERAGE ~3% EXPRESS GROUP PeP SUPPLY CHAIN DGF PAGE 28

29 Divisional Information PAGE 29

30 PeP DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,805 3, % EBIT PeP >100% t/o Germany >100% t/o International ecommerce - Parcel % Revenues increase as growth in German and international Parcel segments as well as stamp price increase continue to more than offset Post volume decline Germany is still the major profit driver; international operations remain in investment phase Growth in Parcel, stamp price increase, cost discipline and last year s strike effect drive strong EBIT improvement Initial international investments holding back EBIT growth while revenues increase by 12.7% Operating Cash Flow % Strong increase in line with EBIT growth Capex % Increase in line with full-year expectation; largest capex spend on Parcel Germany PAGE 30

31 EXPRESS DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,328 3, % EBIT % Increase driven by TDI volume growth and yield management. Reported growth held back by FX and fuel price changes, revenue up 5.3% excl. these effects Up 19% excl. EUR 82m asset write-up in Q3 15: continued strong operating performance driven by TDI growth Operating Cash Flow % Further strong improvement in OCF reflecting growth in operating performance Capex % Decline due to exceptionally strong capex increase in previous year quarter investment program on Express network infrastructure progressing as planned PAGE 31

32 GLOBAL FORWARDING, FREIGHT DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 3,587 3, % Volume growth not translating into revenue growth due to lower freight rates and FX decline of -2.2% adjusted for FX and lower fuel prices Gross Profit % GP slightly up, driven by good OFR performance EBIT >100% EBIT LY significantly impacted by Q3 one-off costs (EUR -384m). Operating performance continues to recover driven by initiated turnaround measures Operating Cash Flow % Cash flow down yoy due to strong working capital recovery in Q3 15 Capex % Lower capex due to phasing PAGE 32

33 SUPPLY CHAIN DIVISIONAL RESULTS Q EUR m Q Q Chg. Management comments Revenue 4,005 3, % Change for the last time strongly impeded by change in NHS revenue recognition, excluding this effect, fuel prices and FX, revenue was up by 2.3% yoy EBIT % EBIT improvement mainly driven by lower restructuring spend as well as ramp-up of related benefits Operating Cash Flow % Cash flow down due to unfavorable working capital movement Capex % Capex development reflects phasing of new contract investments PAGE 33

34 Deutsche Post DHL Group Investor Relations November 2016