Despite major challenges, the DHL Group of Deutsche Post set a record in the last fiscal year. Following the release of the annual report, the group confirmed the preliminary data for 2020 announced in January this year. Deutsche Post DHL Group's revenue for fiscal year 2020 increased by 5.5% year-on-year to 66.8 billion euros. After taking into account the impact of investment portfolio and exchange rate and making corresponding adjustments, the increase in organic income reached a more impressive 8.5%. This increase is mainly due to the global e-commerce boom, which has led to a substantial increase in the volume of parcel and express delivery services. Earnings before interest and taxes in 2020 increased by 17.4%, exceeding 4.8 billion euros. Therefore, the group exceeded the previously adjusted profit target of 4.1 billion euros to 4.4 billion euros. After adjusting for a one-off impact, the basic profit before interest and tax even exceeded 5.4 billion euros.
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CEO Frank Appel said: "For Deutsche Post DHL Group, 2020 is a very challenging year. Our service is more popular than ever. We not only announced record revenue, but also created 20,000 new jobs worldwide. This success does not come in a vacuum. This is the result of years of hard work by our entire group. We focus on our profitable core logistics business, continue to adapt our company to the e-commerce market, and invest in logistics networks and digitization. In this way, we are enhancing our profitability and our ability to withstand global economic turmoil. Therefore, the Deutsche Post DHL Group is ready for continued profit growth in the next few years.
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2021 guidelines: earnings will grow on an expected trajectory
In fiscal year 2021, the group expects profit before interest and taxes to increase significantly to over 5.6 billion euros. This expectation is based on the following assumptions: Electronics for the current year Business will continue to grow from a higher structural starting point, and the growth rate will return to normal within the year. World trade may also recover further in 2021, leading to an increase in the volume of our global logistics activities. At the same time, due to the cargo capacity of passenger aircraft belly Recovery is slow, and intercontinental transportation capacity is expected to remain limited.
In the last fiscal year,The total capital expenditure of all sectors is 3 billion euros. In 2020, the group's free cash flow has improved significantly, reaching 2.5 billion euros (2019: 900 million euros), thereby enhancing the group's financial strength. The company expects free cash flow of approximately 2.3 billion euros in 2021, and total capital expenditures of approximately 3.4 billion euros. The focus of these investments is to modernize the fleet of the express delivery sector, expand domestic and international parcel infrastructure to effectively handle the growing cargo volume, and continue digital transformation.
Raise the rolling mid-term target: It is expected that the profit before interest and tax will grow strongly by 2023
As announced in the "2025 Strategy", the Deutsche Post DHL Group updates its mid-term financial targets every year. With the release of the annual report, the group has now extended its guidelines to 2023. In January of this year, the company raised its previously announced mid-term target until 2022 based on its positive business performance.
The goal of EBIT is to increase to more than 6 billion euros by 2023. The group plans to generate a total of 7.5 billion to 8.5 billion euros of free cash flow from 2021 to 2023 (previous forecast for 2020 to 2022: over 6 billion euros). Cumulative capital expenditures between 2021 and 2023 are expected to be between 9.5 billion euros and 10.5 billion euros (previous forecast for 2020 to 2022: approximately 9.5 billion euros).
Chief Financial Officer Melanie Kreis said:
"Our strategic investment in core business and group digitization is paying off. The increase in mid-term goals also reflects the fundamental improvement in our position. The structure of cash flow. Improvements have strengthened our investment capabilities and our ability to pay dividends."
After record revenue: the dividend increased to 1.35 euros per share, and the stock repurchase program was launched
The record revenue of the previous fiscal year also reflects On the improvement of net profit in 2020. The consolidated net profit after deducting non-controlling interests increased to 3 billion euros (2019: 2.6 billion euros).Basic earnings per share were 2.41 euros (2019: 2.13 euros). As expected, the tax rate has increased from the previous year, reaching 23.9%.
In view of the group's good earnings performance, the board of directors and the board of supervisors plan to propose an increase in the dividend from last year's 1.15 euros per share to 1.35 euros at the annual general meeting of shareholders to be held on May 6, 2021. If approved by shareholders, the total dividend will reach approximately 1.7 billion euros, and the adjusted dividend payout ratio will be 48.9%, which is within the dividend target range of 40% to 60%.
In addition, based on the positive business performance, the Management Committee and the Supervisory Board have decided to implement a share repurchase program of up to 1 billion euros. The decision to initiate the share repurchase program is in line with the Group’s corporate financial policy and was made with an optimistic outlook with free cash flow of up to 2.5 billion euros in fiscal year 2020.
Sustainability: Expanded commitment to the environment and society, and improved carbon dioxide efficiency
In 2020, Deutsche Post DHL Group not only made significant progress in financial performance, but also in environmental protection, carbon dioxide efficiency and social responsibility There are also great achievements in this regard.
The comprehensive report in the non-financial part of the annual report released today describes the group's initiatives and progress in environmental, social responsibility and management. Deutsche Post DHL Group will give a detailed outlook on the adjustment of sustainable development strategies and planned measures on March 22, 2021, in order to achieve the established mid-term goals.
All departments performed well: set goals for e-commerce development
E-commerce solutions department: In 2020, the volume of all regions will grow significantly faster than expected, especially B2C e-commerce. Due to the large differences in the impact of the epidemic in some regions, the volume of this sector has increased significantly in many European countries and the United States. The re-adjustment of the group's international parcel business has achieved results: in addition to good revenue trends, improvements in cost management have also improved efficiency. The EBIT margin of the youngest division of the group closed for the first time with a positive increase of 3.3% (2019: -1.3%).
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