Deutsche Post DHL reveals ‘next growth steps’ under Strategy 2020

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Deutsche Post DHL AGMGerman postal and logistics group Deutsche Post DHL announced the main focus of its new strategy for the near future, as it reiterated its earnings target in the coming years and confirmed the group’s guidance for 2014.

During the company’s annual general meeting, CEO Frank Appel discussed the “next growth steps” of the company under its new “Strategy 2020: Focus.Connect.Grow.” which was presented in April.

“The main focus of this strategy is the systematic growth of the logistics business in emerging markets and the international expansion of the successful parcel business in order to take advantage of the global eCommerce boom,” said Appel. “As in the recent past, he said their emphasis would remain on organic growth.

“Logistic is and will remain our core business,” Appel stressed. The CEO also underscored his commitment to the new Post-eCommerce-Parcel (PeP) division that was formerly known as mail. “The main focus here is sustainable and accelerated organic growth—generated particularly in emerging markets and eCommerce-related logistics.”

He also reiterated the mid-range growth targets contained in the “Strategy 2020” following what he said was a successful 2013 and a good start to the current financial year 2014 for the company despite the “persistently challenging economic conditions.”

The company’s first-quarter revenues totaled nearly EUR13.6 billion, an increase of more than 1 percent compared to the previous year’s period, while consolidated EBIT (earnings before interest and taxes) rose by more than 2 percent to EUR726 million over the same period year-over-year.

Appel confirmed the company’s full-year earnings guidance of group EBIT rising to between EUR2.9 billion and EUR 3.1 billion in 2014. The  PeP division is anticipated to contribute about EUR1.2 billion to this total, while the DHL divisions should continue to grow earnings and generate an EBIT of between EUR2.1 billion and EUR2.3 billion for the year.

“Strategy 2020” also includes a number of ambitious financial targets, he said. From 2013 to 2020, the group expects earnings growth of more than 8 percent per year on average based on the 2013 EBIT of EUR2.86 billion. The 2015 EBIT target of between EUR3.35 billion and EUR3.55 billion remains unchanged.

The DHL divisions are expected to continue to be the main contributor to the group’s revenue and profitability growth, with an annual average EBIT growth of about 10 percent per year over the period. At the same time, the PeP division is forecast to increase operating earnings by an average of around 3 percent each year.

Meanwhile, shareholders at the annual general meeting approved a proposed dividend of EUR0.80 per share for 2013. This reflects an increase of EUR0.10 over the previous year’s level.