DHL Group hits 2023 targets despite weak global economy

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DHL Group hits 2023 targets despite weak global economy
DHL Group Chief Executive Officer Tobias Meyer. Photo from DHL.
  • The DHL Group performed better than expected last year as revenues hit €81.8 billion
  • This is even if revenues are less than €94.4 billion booked in 2022
  • Profit from operating activities (EBIT) of €6.3 billion was also within the forecast range but also down from the 2022 figure of €8.4 billion
  • The company said revenues and EBIT were significantly above pre-pandemic levels
  • For 2024, DHL Group expects operating profit of €6.0 to €6.6 billion and for 2026, €7.5 to €8.5 billion

The DHL Group performed better than expected last year as revenues hit €81.8 billion although this is down from the adjusted 2022 figure of €94.4 billion.

The company said profit from operating activities (EBIT) of €6.3 billion was also within the forecast range even in the absence of a significant recovery in the global economy. Compared to the 2022 profit of €8.4 billion, the latest figure is down 25%.

Free cash flow amounted to €3.3 billion before M&A activities.

DHL said with EBIT and free cash flow well above the figures for the pre-pandemic year 2019, the Group demonstrated its increased earning capacity even in a persistently soft market environment.

For 2024, the Group expects operating profits of between €6.0 and €6.6 billion.

The better-than-expected performance was achieved despite 2023 being characterized by a weak global economy, resulting in weak global trade, CEO Tobias Meyer said.

“Even under these conditions, we achieved our targets for the year. Our high profitability allows us to continuously invest in our network, sustainability, digitalization and our e-commerce capabilities and to further improve quality for our customers. Major uncertainty factors such as volatility in demand and geopolitical crises will remain with us in 2024. However, we are very well positioned for the opportunities and challenges of 2024,” he said in a statement.

The Group’s comprehensive portfolio of logistics services helped offset the weak economic conditions, he added.

Looking further ahead, the Group expects operating profits in 2026 to be in the vicinity of €7.5 to €8.5 billion.

Still, there were areas that experienced headwinds. Volumes in its DHL Express business, for example, declined for the second year in a row in 2023.

DHL Global Forwarding, Freight likewise faced lower freight volumes.

On the other hand, DHL Supply Chain’s business grew.