Deutsche Post DHL Annual Report 2013

2013 Annual Report

Results of operations

Excerpts from Deutsche Post AG's 2013 Group Annual Report.

Selected indicators for results of operations
 
        2012   2013
Revenue   m   55,512   55,085
Profit from operating activities (EBIT)   m   2,665   2,861
Return on sales1   %   4.8   5.2
Consolidated net profit for the period2   m   1,640   2,091
Earnings per share3     1.36   1.73
Dividend per share     0.70   0.804
  1. 1 EBIT/revenue.
  2. 2 After deduction of non-controlling interests, prior-year amount adjusted.
  3. 3 Basic earnings per share, prior-year amount adjusted.
  4. 4 Proposal.

 

Changes in portfolio and reporting

The amendments to IAS 19 (Employee Benefits) have been required to be applied since 1 January 2013. This has in some cases significantly impacted the recognition of pension plans and partial retirement arrangements in the balance sheet and income statement. Detailed information can be found in the Notes. The prior-year amounts have been adjusted.

To improve the transparency of the balance sheet, we broke down the receivables and other current assets item on the assets side into trade receivables and other current assets. On the liabilities side, the capital reserves included in the other reserves item are now shown separately. The prior-year amounts have been adjusted.

We disposed of our domestic express business in Romania by selling our subsidiary Cargus International S.R.L. with effect from 31 March 2013. Since then, our focus there has been on international business.

In the SUPPLY CHAIN division, we sold our interests in DHL Fashion (France) SAS, US company Exel Direct Inc. and ITG GmbH, Germany, together with their subsidiaries in the second quarter. All of the companies’ assets and liabilities had previously been reclassified as held for sale.

In the MAIL division, we acquired optivo GmbH, a leading German e-mail marketing services provider, on 28 June 2013. This acquisition enhances our range of services and will allow us to develop our business in this area.

We sold 50% of our shares in Deutsche Post Mobility GmbH to Allgemeiner Deutscher Automobil-Club (ADAC) in the second quarter. Since October 2013, we have jointly operated a coach network and have entered the deregulated coach market with the “ADAC Postbus”.

We acquired RISER ID Services GmbH, the market leader in electronic address registration information services, at the end of July. The company complements the range of digital address verification services offered by the MAIL division.

In the fourth quarter, we increased our interest in the UK company Tradeteam Limited from 50.1% to 100%.

 

Currency effects cause 0.8% decline in consolidated revenue

Consolidated revenue declined slightly by 0.8% to €55,085 million in financial year 2013 (previous year: €55,512 million). The proportion of consolidated revenue generated abroad declined from 69.7% to 69.0%, largely due to negative currency effects of €1,738 million. Changes in the portfolio reduced revenue by €287 million. At €14,494 million, revenue in the fourth quarter was down 0.6% year-on-year (previous year: €14,577 million). The figure was negatively impacted by currency effects of €607 million and changes in the portfolio.

Other operating income declined by €207 million to €1,961 million. In the previous year, provisions relating to the US express business that were no longer required had been reversed.

Consolidated revenue

Lower transport costs

Materials expense declined by €651 million to €31,212 million, due in particular to currency effects.

At €17,785 million, staff costs were on a level with the prior year (€17,770 million). Labour costs in the MAIL division and the higher number of employees in the SUPPLY CHAIN division caused staff costs to increase, whilst currency effects reduced this item.

At €1,341 million, depreciation, amortisation and impairment losses also remained at the previous year’s level (€1,339 million).

Other operating expenses declined by €196 million to €3,847 million. The prior-year figure had been pushed up by the additional VAT payment, amongst other factors.

 

Development of revenue, other operating income and operating expenses
 
    €m   %    
Revenue

 
  55,085

 
  –0.8

 
 
  • Growth trends in the German parcel and international express businesses remain intact
  • Currency effects reduce consolidated revenue
    by €1,738 million
Other operating income   1,961   –9.5  
  • Previous year also included income from the reversal of provisions for the US express business
Materials expense   31,212   –2.0  
  • Declined due in particular to currency effects
Staff costs

 
  17,785

 
  0.1

 
 
  • Increased number of staff, mostly in the SUPPLY CHAIN division
  • Higher labour costs in the MAIL division
  • Currency effects reduce staff costs
Depreciation, amortisation and impairment losses   1,341   0.1  
  • On a par with the previous year
Other operating expenses   3,847   –4.8  
  • Previous year also included the additional VAT payment

 

Consolidated EBIT improves by 7.4%

Profit from operating activities (EBIT) improved year-on-year, rising by 7.4% to €2,861 million. In the fourth quarter, it rose by 7.0% to €885 million.

Net finance costs improved from €456 million in the previous year to €289 million in the year under review. In 2012, the figure was impacted by the interest expense associated with the additional VAT payment, amongst other things, whereas the gain on the Postbank disposal made a positive contribution. Interest expenses for provisions for pensions and other provisions declined during the reporting year due to lower interest rates.

Profit before income taxes improved by 16.4% to €2,572 million.

At €361 million, income taxes were down €86 million on the prior-year figure, partly because we agreed in the context of a tax audit of outstanding issues from 2006 to 2008 to reverse a tax liability.

Consolidated EBIT

Net profit and earnings per share up considerably

Consolidated net profit for the period improved from €1,762 million to €2,211 million. Of this amount, €2,091 million is attributable to shareholders of Deutsche Post AG and €120 million to non-controlling interest holders. Basic and diluted earnings per share also increased, up from €1.36 to €1.73 and from €1.30 to €1.66, respectively.

 

Dividend of €0.80 per share proposed

Our finance strategy calls for a payout of 40% to 60% of net profits as dividends as a general rule. At the Annual General Meeting on 27 May 2014, the Board of Management and the Supervisory Board will therefore propose a dividend of €0.80 per share for financial year 2013 (previous year: €0.70) to shareholders. The distribution ratio based on the consolidated net profit for the period attributable to Deutsche Post AG shareholders amounts to 46.2%. The net dividend yield based on the year-end closing price of our shares is 3.0%. The dividend will be distributed on 28 May 2014 and is tax-free for shareholders resident in Germany.

Total dividend and dividend per no-par value share

EBIT after asset charge increases

EAC improved from €1,331 million to €1,499 million in 2013, due primarily to the improved profitability in the MAIL and EXPRESS divisions. The asset charge rose moderately by 2.1%, which was predominantly attributable to increased capital expenditures throughout the divisions.

 

EBIT after asset charge (EAC)
€m
    2012
adjusted1
  2013   +/– %
EBIT   2,665   2,861   7.4
Asset charge   –1,334   –1,362   –2.1
EAC   1,331   1,499   12.6
  1. 1 Prior-year amounts adjusted due to a revised calculation basis.

 

In the reporting year, the net asset base saw a slight €106 million decline to €15,330 million. The changes in working capital resulting from good working capital management contributed to this decline. Although investments in IT systems, the purchase of freight aircraft and replacement and expansion investments in warehouses, sorting systems and the vehicle fleet increased year-on-year, they were unable to compensate for the decrease in intangible assets as a result of amortisation and impairment as well as exchange rate losses.

The decline in operating provisions is due to the utilisation of some of the provision for postage stamps, amongst other factors. In addition, the decrease in other non-current assets and liabilities contributed to the decline in the net asset base.

 

Net asset base (unconsolidated)
€m
    31 Dec. 2012
adjusted1
  31 Dec. 2013   +/– %
Intangible assets, property, plant and equipment, and goodwill   18,860   18,698   –0.9
Net working capital   –503   –675   34.2
 Operating provisions (excluding provisions for pensions
and similar obligations)
 
–2,825
 
–2,633
 
–6.8
Other non-current assets and liabilities   –96   –60   –37.5
Net asset base   15,436   15,330   –0.7
  1. 1 Prior-year amounts adjusted due to a revised calculation basis.
Checked
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2013 Annual Report

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2013 Annual Report

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