Deutsche Post AG (0H3Q.L)
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- EQS Group
Deutsche Post AG raises guidance for 2020 based on preliminary Q3 2020 results.
Deutsche Post AG / Key word(s): Preliminary Results/Change in ForecastDeutsche Post AG raises guidance for 2020 based on preliminary Q3 2020 results.07-Oct-2020 / 15:34 CET/CESTDisclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.Disclosure of inside information pursuant to Article 17 MAR Deutsche Post AG raises guidance for 2020 based on preliminary Q3 2020 results.Based on preliminary group results for the month of September and hence Q3 2020, management today has assessed the outlook for the remainder of the year.The overall positive development of the group's businesses going out of Q2 has continued well through the third quarter. In September, typically an important month after summer, we have seen trading holding up very well and for Q3 2020 the EBIT performance is forming out as follows:Preliminary group EBIT reached around EUR 1.37 billion in Q3 2020 (Q3 2019: EUR 942 million). This includes the effect of the one-time bonus of EUR 300 to each of the more than 500,000 employees of the group (c. EUR -170 million) as well as the one-time payment to P&P employees as part of the just concluded wage agreement in Germany (c. EUR -45 million).Operating profit in Post & Parcel Germany was around EUR 320 million (Q3 2019: EUR 304 million) including the effects of the one-off payments of a total EUR 95 million.The Express division managed to increase its EBIT in the third quarter to around EUR 750 million compared to previous year's Q3 of EUR 454 million. Operating profit in Global Forwarding, Freight stood at around EUR 155 million, clearly above previous year's Q3 with EUR 124 million.EBIT at Supply Chain recovered and was at around EUR 110 million in the third quarter 2020 (Q3 2019: EUR 162 million). DHL eCommerce Solutions has seen a further acceleration of EBIT driven by strong B2C volumes in its markets and recorded a Q3 2020 EBIT of around EUR 75 million, clearly ahead of previous year's EBIT (Q3 2019: EUR 6 million). Corporate Functions recorded a result of around EUR -40 million, including a positive revaluation at StreetScooter of c. EUR 40 million. This is due to a better than expected development of the final production.The overall positive business development is underpinned by an ongoing strong development of cash flow; free cash flow has significantly increased in the third quarter to more than EUR 1.0 billion (Q3 2019: EUR 507 million), resulting in a positive free cash flow of more than EUR 1.2 billion for the first nine month of 2020.In light of the ongoing earnings momentum, management has decided to adjust the outlook for the full year 2020 as follows:The reported group-EBIT is expected between EUR 4.1 billion and EUR 4.4 billion (previously EUR 3.5 billion - 3.8 billion). In anticipation of a very strong peak season - in particular for the e-commerce driven businesses - our strong focus in the fourth quarter will be on securing all resources needed to maintain a high quality service level. Achieving the upper end of the guidance will depend on whether the volume development in Q4 will allow for an efficient utilization of the networks.The group continues to expect an EBIT of around EUR 1.5 billion for Post & Parcel Germany.For its DHL divisions Deutsche Post DHL Group forecasts an EBIT between EUR 3.3 billion and EUR 3.6 billion (previously EUR 2.8 billion - 3.1 billion). Operating profit in Corporate Functions including StreetScooter related effects of EUR 350 million is now expected at around EUR -700 million (previously €-750 million). This includes negative effects of EUR 350 million as part of the already communicated and still valid cost of around EUR 400 million for the re-alignment of the StreetScooter activities. The remaining amount of around EUR 50 million will now be booked in 2021.Gross capex (excluding leases) for the full year 2020 is still expected to be in total at around € 2.9 billion, free cash flow is now expected to be more than EUR 1.8 billion (previously around EUR 1,4bn). This includes all mentioned one-off effects and the already previously expected around EUR 300 million for the 777 renewal program in the Express intercontinental fleet.The comprehensive disclosure for Q3 and the first 9 months of 2020 will be released on November 10th as planned.Financial indicators:Explanations on these financial indicators are available in the 2019 Deutsche Post DHL Group Annual Report (see page 14f) which is published on the company's website at the link below:https://www.dpdhl.com/content/dam/dpdhl/en/media-center/investors/documents/annual-reports/DPDHL-2019-Annual-Report.pdf - END -Contact:Martin ZiegenbalgEVP Investor RelationsTel: +49 (0)228-182-6300007-Oct-2020 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de Language: English Company: Deutsche Post AG Charles-de-Gaulle-Straße 20 53113 Bonn Germany Phone: +49 (0)228 182 - 63 100 Fax: +49 (0)228 182 - 63 199 E-mail: ir@deutschepost.de Internet: www.dpdhl.com ISIN: DE0005552004, DE000A2G87D4 WKN: 555200, A2G87D Indices: DAX Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Hanover, Munich, Stuttgart; Regulated Unofficial Market in Tradegate Exchange EQS News ID: 1139435 End of Announcement DGAP News Service
- Yahoo Finance UK
Amazon buys 1,800 electric Mercedes delivery vans for its EU fleets
Electrification of delivery fleets is ramping up.
- Bloomberg
There's More Than One Way to Deliver the Mail
(Bloomberg Opinion) -- U.S. Postmaster General Louis DeJoy is testifying before Congress to defend his management of the Postal Service amid concern over voting by mail and the integrity of the November election. Democrats have questioned whether recent slowdowns and cutbacks at the post office under DeJoy may be part of an effort to suppress voting orchestrated by President Donald Trump, according to Bloomberg News. DeJoy told a Senate committee that allegations that cutbacks at the post office are aimed at having an impact on the November election are an “outrageous claim.” DeJoy said he’s simply trying run the Postal Service, which loses money, more efficiently and like a business.Bloomberg Opinion figured it would be a good time to see how mail delivery works in other parts of the world, and whether the types of issues that are in focus in the U.S. exist elsewhere. Here are the results: Germany's Publicly-Traded Post OfficeGermany will mark the 20-year anniversary of its postal service becoming a publicly traded company in November. Today, Deutsche Post AG boasts a 47 billion euro ($56 billion) market capitalization, is nicely profitable, employs more than half a million people and is held in generally high esteem by the public. The shrinking German letters business accounts for just 15% of its 63 billion euros total revenues; services such as express delivery, freight forwarding and e-commerce make up the rest.Yet for all its profits and solid management, Deutsche Post is hardly the corporate embodiment of Ayn Rand. It’s still obliged to deliver domestic mail six days a week, the unionized German workforce sometimes goes on strike and the state still owns one-fifth of the shares via the KFW development bank. Retaining the state as an anchor shareholder has boosted Deutsche Post’s credit standing, allowing it to borrow cheaply. Before becoming a public company, it also transferred a big chunk of civil servant pension liabilities to the government, lightening a burden that weighs heavy on the U.S. Postal Service.While there are occasional gripes about service quality and rising postage costs, Deutsche Post is a regulated entity and no longer much of a political football. Public aversion to post office closures was overcome by allowing independent retail stores to operate small postal franchises, which are open longer. Customers can also collect internet shopping from unstaffed parcel machines and buy stamps online. And voting by mail has steadily risen to almost 30% of votes cast in the German federal election, and is uncontroversial. — Chris BryantThe U.K.’s Royal Mail: Essential Yet StrugglingAt the peak of the pandemic in April, a British postman managed to deliver a parcel labelled “vital survival stuff” whose address was simply “somewhere in Sheffield.” The postman located the addressee through Facebook and delivered the package of chocolate bars from a sender in Sweden.Apart from that, things have been pretty grim at Royal Mail, Britain’s privatized mail service, which is struggling to modernize in the face of labor opposition. It has recently faced job cuts and restructurings, threats of strike action, walkouts over poor safety measures (four postal workers have died from Covid-19) and a 1.5 million pound ($1.96 million) fine for tardy delivery of first-class mail and overcharging customers for stamps.Royal Mail has a universal service obligation, and is required to make deliveries six times a week around the country, so it is limited on the cost-cutting side. Somewhat confusingly, it was separated in 2012 from the state-controlled Post Office, which runs the network of over 11,600 branches that provide handles postal as well as government and financial services. Post Office branches are largely run by franchise partners and independent retailers, often known as subpostmasters, who are paid a fixed fee or commission. The number of branches has halved over the years, but 99% of the U.K. population must still be within three miles, and 90% within one mile, of an outlet. And yet it too has had to grapple with changing demand in the the digital age, a shrinking revenue base and court battles with stakeholders.Whatever their respective struggles, Brits seem attached to both services, for different reasons. The decline of old-fashioned mail and the rise of Amazon.com have not shaken belief that a universal service obligation for mailed communications, symbolized by those iconic red pillar boxes that have been around since 1852, is part of the social contract. More than 18% of ballots cast in the 2019 general election were postal ballots.As for the Post Office, for all the concerns about branch closures and declining profits, it made an operating profit of 40 million pounds in 2019. A 2016 study put the social value of the Post Office — what people were willing to pay for its services — at between 4.3 billion pounds and 9.7 billion pounds. — Therese RaphaelJapan’s Post Office Is Bigger Than CitigroupWhat’s Japan’s largest financial company after Mitsubishi UFJ Financial Group Inc.? By some measures, it’s the country’s postal service, Japan Post Holdings Co., with an asset base larger than those of Citigroup Inc. and Wells Fargo & Co.Postal savings banks have been around almost as long as state postal services, and Japan’s has long been a behemoth. Since the late 19th century, much of its wealth was built upon deposits taken in the country’s post offices and reinvested in nation-building infrastructure. Thanks to income from Japan Post’s separately-listed banking and insurance arms, the parent company is forecast to make 280 billion yen ($2.65 billion) of net income this year despite its core postal business not earning a cent. To be sure, life as a Japanese bank in the 21st century isn’t all that more lucrative than existence as a postal service — especially when, as has historically been the case, you’re obliged to invest in negative-yielding Japanese government debt. The parent company and Japan Post Bank Ltd. have each lost almost half their equity value since a 2015 initial public share offering. Still, analysts expect the group as a whole to make stable profits well into the current decade, and retail investors continue to sock their money away. The 4.48 trillion yen increase in deposits in the June quarter was the biggest in records dating back to 2014. There are worse ways of keeping a public service in operation without draining the public purse. — David FicklingAustralia Post Is Looking to PivotThe coronavirus pandemic has underscored the ways that Australia Post has been torn in two directions in recent years. For years, the balancing act pursued by its managers has been around minimizing costs from its loss-making letter delivery arm while maximizing its profits from parcels, where its dominant position has helped it prosper from growing volumes of online shopping.Letter volumes have fallen by more than half since 2008, and one of the first moves AusPost made was to switch to deliveries only every second day, rather than daily — a temporary measure that few would be surprised to see become permanent. At the same time, parcel volumes were up around 50% or more on usual levels at the peak of the lockdown, and the company is looking to increase the frequency of deliveries to handle the flood.Growing numbers of parcels will lift revenues, but they may cause margins to narrow, too. AusPost has had to pay third parties to make deliveries because it doesn’t have enough staff to handle the surge. Its fleet of delivery motor scooters looks increasingly obsolete, too, in an era when vans are needed to cope with growing volumes of bulky packages. After a flurry of interest in privatization earlier this decade, that talk has long since died down. The more likely outcome would be less frequent, costlier letter deliveries so that core business is finally able to stand on its own feet. — David FicklingThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is the Executive Editor for Bloomberg Opinion. He is the former global Executive Editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
