Deutsche Post DHL Group expects record earnings in 2021 of more than EUR 7.7 billion - mid-term outlook also raised

[POSTMAN]

https://www.dpdhl.com/en/media-relation ... -2021.html

Growth continued in the third quarter of 2021: Group revenue up 23.5 percent to EUR 20.0 billion
Preliminary quarterly figures confirmed: Operating profit (EBIT) improved by 28.6 percent to EUR 1.8 billion
Earnings guidance raised to record level: Group EBIT of more than EUR 7.7 billion in 2021

CEO Frank Appel: "We achieved a sustainably higher level of earnings and anticipate for 2023 an EBIT of more than EUR 8.0 billion."
Deutsche Post DHL Group again grew strongly in the third quarter of the current financial year 2021. The Group increased its revenue by 23.5 percent year-on-year to EUR 20.0 billion. The dynamic development was driven in particular by the noticeable increase in global trade. This led to a strong demand for logistics services worldwide and a jump in earnings, particularly at the DHL divisions. Although brick-and-mortar retail has reopened, the shipment volumes in e-commerce stabilized on a higher level.

The Group's operating profit (EBIT) in the third quarter of 2021 increased by 28.6 percent year-on-year to EUR 1.8 billion. The EBIT margin improved to 8.8 percent (previous year: 8.5 percent). Deutsche Post DHL Group thus confirmed the preliminary quarterly figures published at the beginning of October. Against the background of the continued very positive development of revenue and earnings, the Group has again raised its earnings outlook: for the financial year 2021, Deutsche Post DHL Group now expects a record result of more than EUR 7.7 billion (previously: more than EUR 7.0 billion). For 2023 the Group anticipates an EBIT of more than EUR 8.0 billion (previously: more than EUR 7.4 billion).

"Our business continued to develop extremely positively in the third quarter of 2021. After nine months, we have already exceeded our record full-year result from the previous year", said Frank Appel, CEO of Deutsche Post DHL Group. "Based on this substantially higher earnings level, the prospects for Deutsche Post DHL Group's future development remain positive: Global trade returns to its old strength. Online shopping is maintaining its new higher level. With our focus on e-commerce and digitalization, we have positioned Deutsche Post DHL Group excellently. We will build on that momentum and expect an EBIT of more than EUR 8.0 billion in 2023."

Earnings outlook raised again

After the end of the third quarter 2021, Deutsche Post DHL Group has already outperformed key performance indicators from the entire 2020 financial year, which was the best in the company's history. EBIT in the first nine months of 2021 increased to around EUR 5.8 billion (9M 2020: EUR 2.9 billion). Net income after non-controlling interests totaled around EUR 3.6 billion (9M 2020: EUR 1.7 billion). Basic earnings per share rose accordingly to EUR 2.89 in this period, compared with EUR 1.36 a year ago. In response to the continuing positive business and earnings performance, the Group has again raised its short- and mid-term earnings guidance:

For the current financial year 2021, Deutsche Post DHL Group is projecting a record result of more than EUR 7.7 billion (previously: more than EUR 7.0 billion). This includes a one-time effect of

minus EUR 178 million for the second Corona special bonus. It will be paid out to around 550,000 employees worldwide in the fourth quarter of 2021. In the previous year, the Group paid out the first Corona special bonus totaling EUR 163 million in the third quarter.

The mid-term earnings outlook for 2023 was raised to more than EUR 8.0 billion (previously: more than EUR 7.4 billion). This adjustment is based on the continued high shipment volumes expected in e-commerce, a solid recovery of the global economy and further initiated efficiency enhancements by Strategy 2025, while freight rates are still expected to slowly normalize.

Strong cash generation leads to improved cash flow guidance

The Group's operating cash flow increased to more than EUR 2.6 billion in the third quarter of 2021 (Q3 2020: EUR 2.4 billion). Gross capex totaling EUR 880 million (Q3 2020: EUR 683 million) was spent in the build-up of additional sorting capacity at Express and Post & Parcel Germany, and further automation technology in the Supply Chain Division. At around EUR 1.3 billion, free cash flow in the third quarter was above the preliminary result published in October. Free cash flow reached around EUR 3.4 billion after nine months (9M 2020: EUR 1.5 billion).

Based on the significantly improved cash generation, the Group now forecasts free cash flow of more than EUR 3.6 billion for the full year 2021 (previously: more than EUR 3.2 billion). The previous guidance of around EUR 9.0 billion for cumulative free cash flow in the years 2021 to 2023 has been raised to around EUR 10.0 billion. This figure does not include effects from the acquisition of the ocean freight specialist J.F. Hillebrand Group announced in August. The short- and mid-term outlook for gross capex remains unchanged.

"In the first nine months of this year, we more than doubled EBIT, net profit and free cash flow. Thanks to the relentless joint efforts we were able to successfully convert the structurally higher demand for logistics solutions into profitable growth. It is particularly pleasing that this strength spreads across all divisions and comes along with sustainably improved cash generation", said CFO Melanie Kreis.

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