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Strong performance in all divisions contributes to record group revenue of €81.7 billion (US$89.83 billion) in financial year 2021
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Operating profit surges 65% year on year to €8 billion while free cash flow nearly doubles to €4.1 billion
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Global logistics leader proposes increase in dividend payout to €1.80 per share, launches €2 billion new share buyback program
Global logistics leader Deutsche Post DHL Group closed its 2021 financial year with profitable growth in all units that drove up group revenue 22.5% year on year to a record €81.7 billion (US$89.83 billion).
“In a challenging year, we achieved the best performance in the company’s history,” DHL chief executive Frank Appel said as he announced the group’s results to the media in the company’s headquarters in Bonn on March 9.
The group said its logistics solutions reached a new all-time high last year, driven by a significant increase in global trade and continued strong e-commerce that fuelled further growth in shipment volumes.
That enabled the more efficient utilization of network capacities, DHL said. The rapid pace of development led to record earnings of €8 billion, as against €4.8 billion in 2020.
Profit margin before interest and tax was a record 9.8%, compared with 7.3% in 2020.
“We have demonstrated our full strength in demanding times and achieved a new revenue and earnings record. Never before has [DHL] transported so much freight, express shipments and parcels worldwide. We also make an important contribution to society through vaccine logistics,” Appel said as he thanked his employees “for their extraordinary commitment in a challenging year”.
Chief financial officer Melanie Kreis said DHL’s third consecutive financial year with record results has strengthened its ability to pay dividends and create opportunities to use excess free cash flow.
DHL said it will propose to the annual general meeting on May 6 an increase of dividend from €1.35 per share in 2020 to €1.80 this year. If approved by the shareholders, total payout would be €2.2 billion, reflecting an adjusted payout ratio of 43%.
In view of the positive business development, the Board of Management and Supervisory Board have again decided to launch a €2 billion share buyback program, the group said.
The logistics giant expects to continue its growth course in financial year 2022, forecasting earnings before interest and taxes of €8 billion (plus/minus 5%).
DHL said the guidance is based on the assumption that e-commerce will maintain its strength and continue its structural growth after a phase of normalization.
The group said it expects growth in global logistics activities to continue, albeit at a slower pace, after the dynamic recovery in global trade over 2021. DHL sees intercontinental transport capacity easing in the second half of this year at the earliest.
“Our guidance does not include the impact of the conflict in Eastern Europe on global GDP growth and the world’s transportation markets, which is currently difficult to assess. Our priority now is to help the people in the war zone, to ensure the safety of all our employees and to keep global supply chains operating,” said Appel.
DHL invested a record €3.9 billion in its business, digitalization and sustainability in 2021, with most of this gross capital expenditure going into modernizing the Express division’s aircraft fleet and expanding the domestic and international parcel infrastructure.
The group said it made good progress in cash generation again in 2021 with free cash flow nearly doubling to €4.1 billion from €2.5 billion a year ago despite higher gross capex.
DHL, unveiling mid-term financial targets, forecast that EBIT will increase to around €8.5 billion in 2024. Without taking into account acquisitions, the group expects cumulative free cash flow of about €11 billion and cumulative gross capex of €12 billion for 2022-2024.
