Slide 1: Investor Call
e a > “he INVESTOR CALL Frank Appel, Group CEO Melanie Kreis, Group CFO
Slide 2: Management Comments: Q3 performance strong, FCF guidance increased
Management Comments: As pre-released on October 7th, Q3 performance was strong, driven by continued growth in e- commerce as well as recovering B2B activities. This strong operating development was also reflected in continued significant FCF generation. On the basis of the strong FCF YTD, management
Slide 3: Strategy 2025 is our compass
02 Strategy 2025 is our compass O3 Guidance Q3 2020 RESULTS | DEUTSCHE POST DHL GROUP | 10 NOVEMBER 2020 3
Slide 4: Management Comments: Organic Group revenue growth accelerated
Management Comments: Organic growth in Group revenue has accelerated to 9.0% in Q3 (from 4.6% in Q2) as e- commerce driven growth in B2C operations stayed strong while activity levels on B2B flows started recovering from Q2 declines. In P&P, Parcel volume growth as well as yield measures in both Mai
Slide 5: Management Comments: Mail and Parcel volume development
Management Comments: Mail volume development has improved vs. Q2 but remains in more significant decline than normal trend (-2 to -3%), mainly due to lower advertisement volumes in the Dialogue Marketing (DM) segment. Note that volume development between Mail Communication and Dialogue Marketing rem
Slide 6: Management Comments: New wage agreement for P&P
Management Comments: Our new wage agreement for P&P provides certainty on future wage development for more than 2 years going forward. The one-time payment agreed as part of the new agreement with the union, which was booked in Q3 EBIT, will be paid out in Q4 (€42m). 6
Slide 7: Management Comments: DHL Express TDI volumes and record margin
Management Comments: After strongly diverging regional volume developments in H1 2020, TDI volumes have maintained the growth momentum throughout Q3 that started towards the end of Q2. In-line with recovering economic activities, B2B volumes improved in the course of Q3. At the same time, B2C volume
Slide 8: Management Comments: B2C e-commerce at DHL Express
Management Comments: As explained at our IR tutorial on Oct 5th, 2020 with full details (see https://www.dpdhl.com/en/investors/events/ca pital-markets-event.html), DHL Express has made B2C e-commerce into its biggest and fastest growing end market vertical vs. other B2B verticals. With regards to p
Slide 9: Management Comments: Freight volumes and gross profit
Management Comments: Volume developments in AFR and OFR continued to reflect overall GDP and global trade circumstances. Nevertheless, gross profit is up in both AFR and OFR as tight market capacities and stringent cost management have allowed significant GP/unit increases to more than offset the vo
Slide 10: Management Comments: DSC recovery in customer activity
Management Comments: Compared to the other DHL divisions, DSC’s business model is much more directly linked to individual customers’ activity levels. As such, after a 13.1% organic revenue decline in Q2, which reflected government and/or customer restrictions, DSC organic revenue growth recovered to
Slide 11: Management Comments: DHL eCommerce Solutions first significant profit
Management Comments: Our DHL eCommerce Solutions division operates DPDHL’s domestic and cross-border Parcel activities outside of Germany. Since their launch (as part of PeP) in 2014, these networks have been developed with the purpose to complement our e-commerce delivery capabilities in Germany (P
Slide 12: Management Comments: Group EBIT up 46% yoy
Management Comments: Group EBIT was up +46% yoy driven by continued e-commerce strength, recovering B2B customer activities as well as stringent focus on yield and cost management. While one-off effects were not significant in Q3 2019 (Group: €-2m), Q3 2020 EBIT includes €163m special bonus rewardin
Slide 13: Management Comments: Revenue growth and EBIT margin increase
Management Comments: Based on +4.4% revenue growth (+9.0% organic), Group EBIT increased by 46% yoy. Group EBIT margin increased from 6.1% to 8.5%, with DHL Express (15.5%, +480bps) and DHL eCommerce Solutions (6.3%, +570bps) showing the strongest increases. Increase in taxes reflected stronger oper
Slide 14: Management Comments: Operating and free cash flow
Management Comments: A strong increase in Group EBIT has set a solid base for similarly strong developments in OCF and FCF. The yoy development in Change in Provisions is mainly influenced by provision utilization/reclassification in 2019 related to the early retirement scheme offered to civil serva
Slide 15: Agenda
Agenda Ol Q3 Review 02 Strategy 2025s our compass O3 Guidance 03 2020 RESULTS | DEUTSCHE POST DHL GROUP | 10 NOVEMBER2020 as 15
Slide 16: Management Comments: Strategy 2025 first presented October 2019
Management Comments: We first presented our Strategy 2025 at our Capital Markets Day in October 2019. Strategy 2025 builds on very successful elements of DPDHL’s previous strategies, especially our Purpose, Values, Mission and the tree bottom lines. On top of that, Strategy 2025 has confirmed DPDHL’
Slide 17: Management Comments: Purpose and 2020 circumstances
Management Comments: Having ended 2019 with record financial results, we have started into 2020 in the Group’s best shape ever. 2020 turned out to be a very different year – in many ways different to what we could have imagined when launching and developing our Strategy 2025. Nevertheless, just as t
Slide 18: Management Comments: Three bottom lines and employee engagement
Management Comments: The exceptional circumstances in 2020 have actually exemplified how our long-standing 3 bottom lines interact towards sustainable success for DPDHL Group. Our 550,000 colleagues are the basis of the Group´s success – and in 2020, our employee engagement has been tested and prove
Slide 19: Management Comments: ESG commitment and progress
Management Comments: Strategy 2025 has also reiterated our commitment to our Environmental, Social and Governance programs and policies. As we continuously strive to improve our performance along our multiples bottom lines, we can also report further progress along all elements of our ESG agenda in
Slide 20: Management Comments: Five divisions strategic set-up
Management Comments: Strategy 2025 has actively affirmed our strategic set-up based on our five strong divisions. We have shown before how this set-up gives us differentiation along varying levels of GDP and growth exposure. Moreover, 2020 has shown how this diversified Group structure provides resi
Slide 21: Management Comments: E-commerce penetration leapfrogged years of growth
Management Comments: Different statistics all show the same conclusion: E-commerce penetration has leapfrogged several years of growth in 2020. The fact that we are able to reap profitable growth from this structural acceleration in 2020 verifies that we have actively build up our e- commerce capabi
Slide 22: Management Comments: Dedicated e-commerce capabilities
Management Comments: Our dedicated e-commerce capabilities range from last mile delivery – both domestic and cross-border – to e-fulfillment. Of course, long- haul transport in DGFF is also part of many customers e-commerce value chains as product flows are executed on Air, Ocean or Road Freight. On
Slide 23: Management Comments: Digitalization focus
Management Comments: Last but not least, Strategy 2025 has further increased our focus on digitalization across our operations. With numerous technology solutions available to optimize internal as well as customer facing processes, all divisions are addressing their own digitalization agenda as part
Slide 24: Agenda
Agenda Ol Q3 Review QO2 Strategy 2025 is our compass O03 (Guidance Q3 2020 RESULTS | DEUTSCHE POST DHL GROUP | 10 NOVEMBER 2020 24 24
Slide 25: Management Comments: EBIT guidance unchanged, FCF raised
Management Comments: EBIT guidance remains unchanged from our last update on October 7th. The special bonus payment booked in Q3 2020 is now exactly quantified at €163m – vs. our estimation of ~€170m on October 7th. Based on the strong YTD FCF performance, management has increased our guidance for 2
Slide 26: Management Comments: Special bonus and 2020 EBIT guidance
Management Comments: The special bonus payment booked in Q3 2020 ended up amounting to €163m – slightly less than we expected on October 7th (~€170m). For this reason, the expected 2020 EBIT excluding One-offs and StreetScooter slightly changed to €4,712m-€5,012m (prior: €4,720m- €5,020m) and the yo
Slide 27: Management Comments: 2022 guidance confirmed
Management Comments: 2022 Guidance is confirmed as communicated on July 7th 2020. 27
Slide 28: Wrap Up
WRAP UP = Strongly positioned to achieve PROFITABLE growth from e-commerce acceleration, across our group = 2020 has shown agility to adapt to quickly changing circumstances = Strategy 2025 sets clear priorities, which address the more than ever relevant key trends around us: e-commerce, globalizati
Slide 29: Disclaimer
Disclaimer This presentation contains certain statements that are neither reported results nor other historical information. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statem