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DHL Group posted €20.1 billion revenue in Q2 2023, operating profit of €1.7 billion, and free cash flow of €450 million
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2023 group EBIT guidance has been raised to €6.2-7 billion from €6-7 billion; 2025 outlook confirmed
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Capital expenditure in international business at a sustained high level
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CEO Tobias Meyer cites DHL’s balanced portfolio and global presence for the group’s resilience reflected on its still high earnings level
DHL Group says it is once again standing firm despite Q2 challenges, having been bolstered by its broad logistics portfolio and despite falling volumes and freight rates that hammered revenue for the second quarter of 2023 to roughly 16% below Q2 2022 levels.
On August 1, the group reported €20.1 billion (US$21.5 billion) revenue for the quarter, significantly below the record €24 billion in Q2 2022.
Even so, group chief executive Tobias Meyer commended the world’s largest logistics company and its employees for keeping DHL standing firm despite Q2 challenges, as he announced the Q2 2023 results from the group headquarters in Bonn, Germany.
“Thanks to our balanced portfolio and global presence, we were once again able to demonstrate our resilience. This is reflected in the still high earnings level,” Meyer said.
DHL said in its results report that operating profit (EBIT, or earnings before interest and tax) was €1.7 billion, the same as the year-ago level.
Despite the persistently weaker market dynamics, DHL Group achieved an attractive EBIT margin of 8.4% (versus 9.7% in Q2 2022), the group said. It raised the lower end of its 2023 EBIT guidance and confirmed its earnings forecasts for 2025.
Likewise, the group said it is benefiting once again from its broad logistics portfolio overall. While its DHL Express and DHL Global Forwarding, Freight divisions are more strongly correlated to the global economy, long-term customer contracts at DHL Supply Chain ensured a continuously stable earnings situation and further growth in Q2 2023.
“We took the right measures at an early stage to deal with the current macro environment. This, along with the dedicated efforts of our employees, is reflected in the high earnings level, which is well above those of the pre-pandemic years,” Meyer said.
With half-year earnings of €3.3 billion, DHL Group raised the lower end of its EBIT guidance for 2023 to €6.2 billion from €6 billion previously.
For its divisions, DHL expects EBIT of €5.7 billion to €6.5 billion, versus €5.5 to €6.5 billion in Q2 2022. For Post & Parcel Germany, DHL aims for EBIT of €800 million to €1 billion, vs. €1 billion previously. For 2025, the group confirmed its medium-term EBIT forecast of more than €8 billion.
DHL said its financial strength remains high with operating cash flow of €1.8 billion in Q2 2023, versus €2 billion a year ago. Free cash flow was €450 million, down 67% from €665 million in Q2 2022.
DHL Express revenue fell 12.5% to €6.1 billion in Q2 2023, partly due to negative currency effects of €298 million and lower fuel surcharges. Excluding these, revenue fell 6.9%. EBIT fell 18.2% to €901 million and return on sales was 14.7%.
Global Forwarding, Freight revenue fell 40.7% to €4.8 billion as volumes and freight rates fell. Minus negative currency effects of €221 million, revenue was 38.0% y-o-y. Air and ocean freight volumes on trade routes from China slipped. EBIT fell 47.2% to €388 million due to the revenue drop.
DHL Supply Chain revenue grew 4% to €4.2 billion. Excluding currency exchange losses of €126 million, growth was 7.1%. All regions and sectors registered revenue increases. EBIT rose to €272 million.
At €1.5 billion, eCommerce revenue was 0.3% below the Q2 2022 level. Excluding negative currency effects of €31 million, growth was 1.8%. EBIT fell from €109 million to €78 million on higher costs and network expansion expenses.
Post & Parcel Germany revenue rose 0.8% y-o-y to €4.0 billion. EBIT dived 49.2% y-o-y to €123 million due to higher costs as inflation and payment of special inflation compensation was felt.
