DHL Global Forwarding - Vaccine logistics

German logistics giant Deutsche Post-DHL is set to report record financial results for 2020, “fuelled by an extremely dynamic peak season”.

It has released preliminary figures that show it expects to beat its previous ebit guidance by over €400m ($487m).

Its guidance for earnings before interest and tax (ebit) was in the €4.1bn to €4.4bn range, but yesterday said it was expected to be €4.84bn.

Group revenues for the year increased by 5% over 2019 to reach €66.8bn.

“2020 was an exceptional year: despite all the challenges faced, we achieved a record result,” said chief executive Frank Appel. “Our strategy and business model have proven resilient – even in turbulent times for the global economy.

“Thanks to the incredible performance of our 550,000 employees all over the world, we made a positive contribution to people and societies during the Covid-19 crisis.

“We are now focused on distributing the Covid-19 vaccine all over the world,” he added.

DHL Global Forwarding’s Freight division recorded full-year revenue of €15.9bn, up 5% on 2019, while full-year ebit of €590m was up 13%.

This performed was powered by a “stellar fourth quarter” which saw revenue climb 14% to reach €4.4bn, although the input of higher costs was evident, as ebit declined 2% year on year to €170m.

Its Supply Chain division also suffered – annual revenue declined 7% to €12.5bn and ebit was down 53% to €430m, although it did improve in the fourth quarter, which saw revenues down year on year by 3% to €3.5bn and ebit down just 1% to €175m.

However, this was more than offset by the performance of the Express and e-Commerce divisions, which benefited from the pandemic-induced explosion in online retail and recovery in business traffic.

Express recorded full-year revenues of €19.1bn, up 12% on 2019, and a 35% increase in full-year ebit to €2.75bn. The final quarter was even stronger, with revenue up 20% year on year to €5.6bn and ebit growing by 70% to €1.04bn.

The group said: “Core TDI [time-definite international] volumes in the fourth quarter increased in all regions and, overall, grew by 17%, bringing the full-year growth rate to 9%. [The] main driver continued to be B2C volumes, but the fourth quarter also saw some further recovery in B2B volumes.”

Its eCommerce division saw full-year revenue grow 19%, to reach of €4.8bn, producing a full-year ebit of €160m, compared with a loss in 2019. Fourth-quarter revenues reached €1.5bn, up 33% year on year, while Q4 ebit was €80m.

“Evidence of the profitable growth in the past financial year is the extraordinarily positive development in the express as well as in the national and international parcel business. The dynamic increase in shipment volumes accelerated once again during the Christmas season, with network capacity utilisation at consistently optimal levels,” a group statement said.

It added that it had now increased its earnings guidance for this year and the next, and now expects ebit in 2021 of around €5.4bn, and above that in 2022.

DP-DHL has also revised its predicted aggregated free cash flow for 2020-2022 to over €6bn ,with gross capex for the period now forecast at around €9.5bn, including eight 777 cargo aircraft, an order announced today.

Free cash flow was around €2.5bn last year, well above the predicted €2bn.

“We were able to accomplish all planned investments in future growth and, at the same time, increased our profitability,” said chief financial officer Melanie Kreis.“We can be proud of the outstanding development of free cash flow in an economically uncertain environment.

“With the record result behind us and the beginning economic recovery in sight, we can confidently provide a more positive outlook,” she added.

DP-DHL’s annual report is scheduled to be published on 9 March.

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