- Guidance for full-year 2016 confirmed: operating profit forecast to rise to between EUR 3.4 billion and EUR 3.7 billion
- CEO Frank Appel: "The good start to the year puts us firmly on track to achieve our targets for 2016."
Deutsche Post DHL Group increased operating profit significantly in the first quarter of 2016. Group EBIT rose to EUR 873 million, or 21.3% over the prior-year period (2015: EUR 720 million). The increase extended further the earnings momentum that had already begun during the fourth quarter of last year. Group revenue decreased by 6.1% to EUR 13.9 billion in the first three months of the year (2015: EUR 14.8 billion). In addition to negative currency effects and lower fuel surcharges, the decline primarily reflects the changed recognition of revenue generated from a key customer contract in the Supply Chain division starting in the fourth quarter of 2015. Adjusted for the above effects, Group revenue rose by 1.4% on the prior year. The main growth drivers - above all the international express business and the dynamic parcel and eCommerce business - remained intact in the first months of the new year.
"We've had a good start to the current year. With an EBIT of EUR 873 million we have registered the strongest first quarter in our company history. The efforts we made in 2015 to position ourselves for profitable growth in all divisions are paying off. Last year was a year of transition, and we are now firmly on track to achieve our targets for 2016," stated Frank Appel, CEO of Deutsche Post DHL Group.
Outlook: Earnings forecast for 2016 and long-term objectives confirmed
For 2016, the Group continues to anticipate moderate growth of the global economy. The strategic measures implemented in all four divisions in 2015, however, should lead to a substantial EBIT increase in the current year. Therefore, Deutsche Post DHL Group re-confirms its 2016 EBIT forecast of between EUR 3.4 billion and EUR 3.7 billion after a good first quarter.
The Group is also maintaining its targets beyond 2016: Deutsche Post DHL Group continues to forecast an average increase in operating profit of more than 8% annually during the period from 2013 to 2020 (CAGR).
Q1 2016: Significant increase in profitability
Group revenue decreased by 6.1% to EUR 13.9 billion in the first three months of the year (2015: EUR 14.8 billion). The decrease reflects negative currency effects as well as the effect of lower fuel surcharges due to the drop in oil prices. Another cause of the decline was the change in revenue recognition, announced last year, which was due to contractual amendments involving a key account in the Supply Chain division (NHS in the UK). Adjusted for those three factors, first-quarter revenue increased by 1.4% over the prior year.
Group EBIT rose significantly, increasing by 21.3% to EUR 873 million in the first quarter of 2016 (2015: EUR 720 million). All four divisions contributed to the upward trend. In the Post - eCommerce - Parcel division, operating profit climbed by 3.3% to EUR 412 million (2015: EUR 399 million). The DHL divisions reported a combined increase of 32.8% to EUR 534 million (2015: EUR 402 million). Express saw an EBIT increase of 7.5% to EUR 357 million. Operating earnings for Global Forwarding, Freight rose from EUR 17 million to EUR 51 million, and Supply Chain EBIT increased from EUR 53 million to EUR 127 million.
Thanks to the increase in operating profitability and lower tax expenses consolidated net profit rose by 29,1% to EUR 639 million in the first quarter of 2016 (2015: EUR 495 million). Basic earnings per share similarly increased from EUR 0.41 in the previous year to EUR 0.53 in 2016.
Source: Deutsche Post DHL