Deutsche Post DHL Group closes 2021 with record profits

Deutsche Post DHL Group, the world’s leading logistics company, achieved profitable growth in the past financial year. The group’s turnover increased by 22.5% year-on-year to reach 81.7 billion euros, the highest turnover in the group’s history.

While all five business units contributed to record commercial performance, demand for the Group’s logistics solutions reached a new record last year. This development was driven by the significant increase in global trade and continued strength in e-commerce with further growth in shipping volumes. This then allowed more efficient use of network capacity.

The rapid pace of development led to a record profit of €8.0 billion (2020: €4.8 billion) and an EBIT (earnings before interest and tax) margin of 9.8% (2020: 7.3%). The Group is thus more profitable than ever. “We have shown all our strength in these difficult times and achieved a new record in revenue and profit. Never before has Deutsche Post DHL Group transported so much freight, express shipments and parcels around the world. We also make an important contribution to society through vaccine logistics. “, said Frank Appel, CEO of Deutsche Post DHL Group.

Speaking about the year that has passed, Appel said in an interview: 2021 has been an extraordinary year. The pandemic again had a strong impact on public life and therefore also influenced our business. E-commerce continued to grow and global trade recovered very quickly. We cost-effectively transported record volumes of freight, express and parcels and operated more efficiently than ever. At the same time, we helped fight the coronavirus in the second year of the pandemic through our vaccine logistics. After the first nine months, we had already exceeded the operating profit of the previous year. Additionally, we recorded our best ever Christmas season in the fourth quarter of 2021. The drivers of our success are intact. In March 2021, we published an EBIT forecast of EUR 5.6 billion for the full year; the actual figure was an outstanding amount of 8.0 billion euros.”

Profitable growth course likely to continue in 2022
For the 2022 financial year, the group expects an EBIT of 8.0 billion (+/- 5%). The forecast is based on the assumption that e-commerce will maintain its strength and continue its structural growth after a phase of normalization. Following the dynamic recovery of global trade during 2021, the growth of global logistics activities is likely to continue, albeit at a slower pace, quotes a statement from the group. Intercontinental transport capacity is expected to decline in the second half of 2022 at the earliest.

“The outlook remains positive even from the new altitude reached. For 2022, we expect EBIT of EUR 8.0 billion +/- 5%, while we expect earnings growth to around EUR 8.5 billion. euros until 2024. The impact of the conflict in Eastern Europe on global GDP growth and global transport markets is currently difficult to assess. Our priority now is to help people in the war zone , to keep all of our employees safe and to keep global supply chains functioning,” said Frank Appel.

High investments in digitization and sustainability
The Group invested a record €3.9 billion (2020: €3.0 billion) in its business, digitalization and sustainability in 2021. The bulk of these gross investments were dedicated to modernization of the Express division’s aircraft fleet and the expansion of the domestic and international parcel infrastructure to ensure the efficient handling of a significantly higher transport demand. Deutsche Post DHL Group again made good progress in cash generation in 2021.

Free cash flow improved significantly to EUR 4.1 billion (2020: EUR 2.5 billion) despite higher gross investments. Excluding acquisitions, such as the planned takeover of Hillebrand, the company expects free cash flow of 3.6 billion euros (+/- 5%) and gross capital expenditure of around 4.2 billion euros for 2022. These investments will continue to focus on the expansion of transport and sorting capacities for the continued increase in shipping volumes as well as the further implementation of digital transformation.

Medium-term objectives and new EBIT growth forecasts until 2024
During the recent presentation of the annual report, the group communicated its medium-term financial objectives until 2024. EBIT is expected to increase to approximately 8.5 billion euros in 2024. Excluding acquisitions, such as the planned takeover of Hillebrand, the group expects to generate cumulative free cash flow of around €11 billion between 2022 and 2024. Over the same period, the company expects cumulative gross investments (Capex) of around €12 billion euros.

“I am very pleased that we were able to close the third consecutive financial year with record results. We have fundamentally improved the financial strength of the Group with a massive leap of growth in all financial dimensions. This strengthens our ability to pay dividends and creates opportunities for utilizing excess free cash flow,” said CFO Melanie Kreis.

The record performance is also reflected in a significantly higher net profit. Consolidated net profit after deducting non-controlling interests increased significantly to €5.1 billion (2020: €3.0 billion). Basic earnings per share thus amount to EUR 4.10 (2020: EUR 2.41).

Sustainable development roadmap operationalized
Last year, Deutsche Post DHL Group defined its sustainability roadmap and set measurable non-financial goals for fiscal year 2022 that will factor into the calculation of the future. The Group is aiming for an absolute reduction of its greenhouse gas emissions to less than 29 million tons by 2030. Thus, concrete measures to save around 1 million tons of CO2 are targeted to be implemented in 2022. In addition, in 2021, the Group invested 156 million euros in decarbonization measures.

Significant revenue and profit growth across all divisions
1. Express: The Express division recorded an extremely positive revenue and profit trend in 2021. EBIT increased by 53.4% ​​to EUR 4.2 billion. At €24.2 billion (2020: €19.1 billion), revenue was significantly higher than the previous year

2. Global Forwarding, Freight (GFF): The division has been extremely successful in weathering the continued difficult conditions in the international transportation markets. EBIT more than doubled to EUR 1.3 billion (2020: EUR 0.6 billion), while sales increased strongly to EUR 22.8 billion (2020: €15.8 billion).

3. Supply chain: Reliable supply chains were in high demand in 2021. The division recorded a significant increase in profit to €705 million (2020: €424 million) based on a increase in revenues to €13.9 billion (2020: €12.5 million). billion) and continuous efficiency improvements.

4. E-Commerce Solutions: The division more than doubled its profit in 2021. EBIT was €417 million (2020: €158 million), driven by the rapid pace of volume growth shipping in e-commerce. Almost all regions recorded double-digit growth rates, with particularly strong volume development in the Netherlands and India.

5. Post & Parcel Germany: the division managed to increase its profits and revenues, with EBIT rising sharply to 1.75 billion euros (2020: 1.6 billion euros). Post & Parcel Germany transported a record volume of more than 1.8 billion parcels in 2021 (2020: 1.6 billion parcels).

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