Business, Freight News, Logistics

Deutsche Post DHL Group

[ April 9, 2020   //   ]

The spread of the Coronavirus-Pandemic presents society and the economy with unexpected challenges. “Our services, which are focused on keeping up supply chains and ensuring the delivery of important goods such as medicine and food, have never been more important than in the current situation.  With a global network, business activities in every country on the planet and 550,000 employees worldwide, Deutsche Post DHL Group is making a decisive contribution by ensuring supplies securely reach every part of the world“, said Frank Appel, CEO of Deutsche Post DHL Group. “Above all, the safety of our employees and customers is the main priority.”

Thanks to its broad geographic set-up and comprehensive portfolio of logistics solutions Deutsche Post DHL Group is more resilient than other companies to navigate through crises situations. Nevertheless, an economic downturn like the world is currently experiencing, does not leave the company unaffected. 

The global spread of the pandemic and the corresponding lack of transparency concerning the global economic development has led the Group to withdraw its EBIT guidance for 2020. Given the significant impact of Covid-19 on all parts of the economy, which is expected to continue over the coming months, an adjustment of the results for the effects of the pandemic becomes increasingly difficult and less meaningful. 

As soon as a stabilization in the most important economies can be foreseen and a more reliable basis for a detailed earnings guidance is given, the Group will communicate a new guidance.

The mid-term guidance for a Group EBIT of at least EUR 5.3 billion in 2022 is confirmed; likewise the cumulative Capex and free cash flow guidance for the years 2020 to 2022 are still in place, both are however subject to a still to be quantified Covid-19-related effect on free cash flow in the current year.

Business performance in the first quarter 2020

Since the start of the global spread of the virus, the five business divisions and the activities in different regions performed in some cases better and in some cases worse than planned. While the development of the business situation in China has been quite promising in the last weeks, Europe and North America are still in an earlier stage of the pandemic. It is likely that these regions are going to see a comparable downturn and subsequent upswing like in China, while the peak of the pandemic and therefore the turnaround of the curve are not yet reached. 

“Our company has shown a very good development in the first quarter, despite the global challenges. We are operating profitably which can currently not be taken for granted”, said Frank Appel.

Preliminary Group EBIT reached approximately EUR 590 million in the first quarter of 2020. After adjusting for the effects related to the pandemic of approximately EUR 200 million as well as costs related to the realignment of the StreetScooter activities of approximately EUR 230 million, operating profit stood at approximately EUR 1 billion and with this was EUR 200 million above the previous year figure adjusted for one-off effects.