Slide 1: Deutsche Post DHL Group Q2 2021 Earnings Investor Call
Deutsche Post DHL Group Q2 2021 EARNINGS INVESTOR CALL FRANK APPEL, Group CEO MELANIE KREIS, Group CFO DEUTSCHE POST DHL GROUP INVESTOR RELATIONS | 05 AUGUST 2021
Slide 2: Q2 Business Review
> Q2 Business Review Frank Appel, Group CEO (02 2021 RESULTS | DEUTSCHE POST DHL GROUP | 05 AUGUST 2021
Slide 3: Management comments: Q2 2021 another very strong quarter
Management comments: Q2 2021 was another very strong quarter for DPDHL Group. As in the last years, the Group’s networks have continued to serve the structural growth in e-commerce in terms of domestic and international delivery as well as e-fulfillment. Just as well, the broad logistics capabilitie
Slide 4: Management comments: global GDP recovery driving B2B volumes
Management comments: The ongoing recovery in global GDP has, as expected, continued to drive further growth in B2B volumes across the full DHL logistics spectrum. In DHL Express, TDI volume growth in B2B of >25% is now actually stronger than the yoy growth in B2C. As for all divisions, yoy compariso
Slide 5: Management comments: Parcel Germany volume development
Management comments: Volume development in Parcel Germany so far confirms our expectation that B2C activity levels have reached a new, higher plateau as the lockdown measures have led to a structural increase in e-commerce penetration. Volumes were still up significantly in Q2 2021 with +13% yoy gro
Slide 6: Management comments: DHL eCommerce Solutions major markets
Management comments: Business development in the major markets of DHL eCommerce Solutions’ portfolio so far confirms the same trend on B2C development as Parcel Germany described on the previous page. Revenue is still up yoy in Q2 across all major markets despite the fact that the base effects from
Slide 7: Management comments: Express TDI volume development
Management comments: TDI volume development in Express shows the strength of the international network that can cater for the cross- border needs of B2B and B2C shipments with the same global infrastructure. With activity levels staying high in B2C and B2B volumes continuing to recover, the network
Slide 8: Management comments: DHL Express TDI volume up 20%
Management comments: DHL Express TDI volume was up 20% yoy in Q2 2021 with >25% growth in B2B volumes and still double-digit growth in B2C (see also p. 4+19). Alongside this accelerated B2B shipment growth, Express is also seeing an increase in weight/shipment driven by a series of partly related re
Slide 9: Management comments: Global Forwarding Freight record Q2 results
Management comments: B2B volume recovery, high rates and improved internal efficiencies have driven record Q2 results for DGFF (see also p. 4+19). Given the exceptional circumstances in Q2 2020, the performance trend in Ocean Freight (OFR) and Air Freight (AFR) is best explained with the two-year vi
Slide 10: Management comments: DHL Supply Chain record second quarter
Management comments: Based on the strong recovery of B2B customers and the continued expansion of e-commerce related activities, DHL Supply Chain has grown revenue, EBIT as well as EBIT margin beyond pre-pandemic levels, driving EBIT to a record second quarter. As the global leader in the contract l
Slide 11: Management comments: DHL eCommerce Solutions B2C activity
Management comments: DHL eCommerce Solutions has seen continued high B2C activity levels as well as the B2B recovery driving >20% growth in all three regions. The expected normalization of B2C growth rates has started, as growth is slowing down sequentially but overall e-commerce volumes stay on hig
Slide 12: Management comments: Parcel Germany volumes up 13%
Management comments: Volumes in Parcel Germany were up strongly at 13% on last year’s high base level. While this implies a slowdown vs Q1 as the expected normalization is happening, this volume development in the early phase of lockdown easing seems to confirm that e-commerce activity levels should
Slide 13: Management comments: ESG roadmap
Management comments: With the launch of the new ESG roadmap as part of our Group-wide Strategy 2025, DPDHL Group has identified the key ESG topics and set ambitious but realistic targets on the steering KPIs along all the core ESG dimensions. By setting a compulsory 30% weight on ESG targets of the
Slide 14: Q2 Financials & Outlook
> Q2 Financials & Outlook Melanie Kreis, Group CFO (02 2021 RESULTS | DEUTSCHE POST DHL GROUP | 05 AUGUST 2021 14
Slide 15: Management comments: organic revenue growth of 25%
Management comments: Organic growth in Group revenue of 25% is driven by a strong performance across all divisions. Continued strong activity levels in B2C combined with the resurgence in B2B volumes drove organic revenue growth of more than 20% in all DHL divisions. Besides the volume development,
Slide 16: Management comments: Group EBIT more than doubled
Management comments: As pre-released on July 7th, Group EBIT more than doubled and exceeded €2bn in the quarter at €2,083m. Benefitting from both B2B and B2C strengths, DHL Express added more than €600m of EBIT yoy as high and well balanced network utilization and ongoing yield management drove a re
Slide 17: Management comments: EBIT to net income and EPS
Management comments: Based on strong organic revenue growth, DPDHL has more than doubled Group EBIT in Q2 2021, as all divisions have expanded EBIT margins yoy. Financial result was stable yoy, while higher taxes reflect the higher taxable income as well as the expected uptick in the tax rate (Q2 20
Slide 18: Management comments: EBIT conversion into free cash flow
Management comments: Conversion of EBIT into FCF has been influenced by a series of expected developments in the quarter: • The provision line was exceptionally positive in Q2 last year, due to non-recurring factors, mainly related to the StreetScooter refocusing. The return to a more normal change
Slide 19: Management comments: volumes in line with guidance assumptions
Management comments: Q2 2021 volumes have overall developed in-line with the assumptions, that form the basis of our 2021/23 guidance set. As such, we have seen a continued recovery across all our B2B metrics, with growth rates actually accelerating sequentially. Global economic activity has been fi
Slide 20: Management comments: H2 uncertainty and peak season
Management comments: As seen on the previous page, volume developments in 2021 so far have confirmed the expected basic volume trends. Therefore, our base assumptions are confirmed. However, the timing and shape of growth in H2 remain highly uncertain, especially in B2C, where the expected normaliza
Slide 21: Management comments: inflation and cost mechanisms
Management comments: As inflation is currently a very big topic in financial market discussions, here is a quick overview of how our existing and well-established contract features and mechanisms, notably regarding yield management, allow us to address all elements of cost inflation that we may face
Slide 22: Management comments: guidance confirmed
Management comments: Our guidance set is confirmed regarding all metrics as per our guidance increase announced with the Q2 2021 pre-release on July 7th, 2021. As was mentioned already then, the upgraded 2021 EBIT and FCF guidance includes the one-time covid bonus, with expected €200m expenses to be
Slide 23: Management comments: conclusion
Management comments: As conclusion: • Q2 2021 results have again shown the full strength of the diversified DPDHL portfolio, offering market leading solutions along the full logistics spectrum • Both general economic recovery and structural e- commerce growth have driven strong balanced growth • Str