- Guidance for full-year 2016 confirmed: EBIT forecast to increase to between EUR 3.4 billion and EUR 3.7 billion
- CEO Frank Appel: "We are successful despite weak economic tailwind"
Deutsche Post DHL Group increased operating profit significantly in the third quarter of 2016, continuing the strong earnings momentum seen in previous quarters. Group EBIT increased to EUR 755 million, representing the strongest third quarter in company history1. The sharp rise over the prior year (2015: EUR 197 million) is attributable to sustained organic growth in operating profit in all divisions in addition to the non-recurrence of substantial one-time effects. Group revenue decreased by 3.9% to EUR 13.9 billion between July and September 2016 (2015: EUR 14.4 billion). In addition to negative currency effects and lower fuel surcharges due to falling oil prices, the decline reflects a change in the recognition of revenue generated from a key customer contract in the Supply Chain division, which took effect in the fourth quarter of 2015. Adjusted for the above effects, Group revenue rose by 2.4% year on year.
"The strong trend in operating profit in all four divisions shows that we have set the right priorities with our Strategy 2020. We are taking an increasingly active role in the dynamic development of e-commerce all over the world and are continuing to invest in this segment. Thanks to the targeted investments and strategic initiatives we implemented in prior years, we are now enjoying success despite weak economic tailwind," said Frank Appel, CEO of Deutsche Post DHL Group. "We are well on track to reaching the ambitious goals we have set for 2016 and beyond."
Outlook: Earnings forecast for 2016 and long-term objectives confirmed
The company anticipates only moderate growth in the world economy for the remainder of 2016. Despite the continuing lack of economic tailwind, Deutsche Post DHL Group still expects to reach its objective of significantly increasing EBIT for full-year 2016 to between EUR 3.4 billion and EUR 3.7 billion based on the Group's very positive operating performance in the first nine months.
The Group has also confirmed its targets for the coming years: 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).
Third quarter of 2016: EBIT rises by EUR 558 million
Both the Post - eCommerce - Parcel (PeP) division and the DHL divisions contributed to the substantial EUR 558 million increase in third-quarter Group EBIT to EUR 755 million. This improvement was supported by the fact that the one-time effects posted in the prior-year period did not recur in 2016.
Operating profit at PeP more than doubled to EUR 295 million, with the prior-year EBIT figure (2015: EUR 142 million) impacted primarily by the consequences of the postal strike in Germany. The DHL divisions reported a combined, strong increase in EBIT to EUR 536 million (2015: EUR 127 million). The Global Forwarding, Freight division contributed in particular to the increase with an improvement from EUR -337 million to EUR 63 million. The negative figure reported in the previous year was due to one-time charges of EUR 384 million, primarily associated with the renewal of the division's IT systems. The Supply Chain division increased EBIT by 35.6% to EUR 137 million. The Express division registered a decline to EUR 336 million (2015: EUR 364 million) based on non-recurring income posted in the previous year. After adjusting for that effect, divisional EBIT improved by 19%.
Source: Deutsche Post DHL