HSBC VIRTUAL TRANSPORT & LOGISTICS CONFERENCE - INVESTOR CALL Martin Ziegenbalg, Head of Investor Relations
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HSBC VIRTUAL TRANSPORT & LOGISTICS CONFERENCE Martin Ziegenbalg, Head of Investor Relations 10 June 2021 INVESTOR CALL
Content
DPDHL Group Highlights
Page 3
Strategy 2025
Page 15
Divisional Deep-Dives
DHL Express (page 26), DHL Global Forwarding, Freight (page 32), DHL Supply
Chain (page 38), DHL eCommerce Solutions (page 45), P&P Germany (page 51)
Financial Backup
Page 57
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 2
Content
DPDHL Group Highlights
Page 3
Strategy 2025
Page 15
Divisional Deep-Dives
DHL Express (page 26), DHL Global Forwarding, Freight (page 32), DHL Supply
Chain (page 38), DHL eCommerce Solutions (page 45), P&P Germany (page 51)
Financial Backup
Page 57
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 3
CONNECTING
PEOPLE.
IMPROVING
LIVES.
THE GLOBAL LOGISTICS POWERHOUSE –
SERVING B2C/B2B TRADE IN 220+ COUNTRIES
CONSISTENT & SUSTAINABLE STRATEGIC FOCUS
LEADER IN DIGITALIZING GLOBAL
E-COMMERCE LOGISTICS SUPPLY CHAINS
ATTRACTIVE & RELIABLE DIVIDEND POLICY
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 4
GROUP REVENUE, Q1 2021
€18,860m yoy: +€3,396m (+22%)
+1.349 +1.170
Divisional +32.5% +596
+32.7% +9 +458
revenue +46.0% +15.1%
+0.3%
growth yoy
in €m
DHL Express DHL Global DHL Supply Chain DHL eCommerce P&P Germany
Forwarding, Freight Solutions
Organic Growth
Group: +25.8% +38.1% +37.1% +4.7% +51.8% +15.1%
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 5
GROUP EBIT, Q1 2021
€1,911m yoy: +€1,319m (+223%)
in €m
DHL Global DHL eCommerce Group Functions /
DHL Express Forwarding, Freight DHL Supply Chain Solutions P&P Germany Consolidation
961 216 167 117 556 -106
+145% +192% +59% +1,850% +67% +67%
Q1 2020: €393m Q1 2020: €74m Q1 2020: €105m Q1 2020: €6m Q1 2020: €334m Q1 2020: €-320m
Delivering expected
Efficient network Continued strong parcel
significant EBIT growth
planning and relentless Strong profit increase growth offsets ongoing Group Functions results
as new business gains Continued strong B2C
focus enabled to cater for reflects return to volume adverse mail in line with ~€-400m
and gradual return of growth and cost focus
continued B2C growth growth, continued high development, supported guidance for FY 2021.
B2B activity levels are drive high utilization
and recovering B2B rates and ongoing by continuous efforts to Q1 2020 included
supported by improved across all networks, Q1
volumes, driving very internal efficiency gains. optimize cost structures €-234m StreetScooter
efficiency e.g. from margin at 8.0%.
high network utilization EBIT margin up to 4.5%. and utilization of effect.
digitalization. EBIT
and 17.5% EBIT margin. networks.
margin back to 5%.
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 6
DPDHL Group: Strategy 2020 delivered
Leading to better mix …
Revenue, in €bn
+21.7%
66.8
Consistent growth in DHL Express core TDI
54.9 19,1 DHL Express product
11,8 DGFF and DSC development reflects selective
DHL Global
15,9 Forwarding, Freight growth approach over the period as well as
(DGFF)
14,8 China and Williams Lea Tag disposals in DSC
DHL Supply Chain*
12,5 (DSC) New division DeCS contributes €5bn in 2020
14,2 DHL eCommerce Solutions
4,8 (DeCS) P&P Germany revenue up as Parcel growth
Post & Parcel
15.3
16.5 Germany
offset mail decline
t/o 3.7 t/o 5.9 t/o Parcel Germany
FY 2013 FY 2020
*includes DSC China and Williams Lea Tag disposal
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 7
DPDHL Group: Strategy 2020 delivered
… and higher profitability
EBIT Margin
12-months rolling 16,2% DHL Express
Group margin up >200bps under Strategy 2020
Strong increase in DHL Express
P&P Germany fully recovered
Post & Parcel
10,6% Germany
9,4% DGFF started upward trend
8,3% 8,8% GROUP
DSC impacted by 2020 circumstances
Profitable DeCS contribution; division created
5,2% 5,1% DeCS
4,3% DGFF in 2019
3,1% 3,9% DSC
3,0%
Further improvement embedded
in 2021/23 guidance
Q1 2014 Q4 2018 Q1 2021
EBIT Margin: DSC adjusted for 2019 one-offs, DGFF for NFE write-down in 2015
Until 2017: P&P values include business activities which are now under DeCS
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 8
2021 base assumptions confirmed
Expect B2C growth normalizing in course of 2021 from elevated levels
Continued and gradual B2B recovery globally B2C growth hasn’t
normalized yet
Divisional activity levels,
yoy change by quarter
B2B recovery
continued gradually
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 9
2021 and 2023 guidance
in € bn
EBIT 2021 Guidance Mid-term Guidance
Group >6.7 (from >5.6) 2023 Group EBIT >7 (from >6)
DHL >5.4 (from ~4.5) Free Cash Flow
~9 (from 7.5-8.5)
2021-2023 cumulative
P&P Germany ~1.7 (from ~1.6)
Gross Capex (excl. leases)
~11 (from 9.5-10.5)
Group Functions ~-0.4 2021-2023 cumulative
Free Cash Flow >3.0 (from ~2.3)
Gross Capex
~3.8 (from ~3.4)
(excl. leases)
Tax Rate 26-28%
Base assumptions:
B2C growth normalizing in the course of 2021
Continued and gradual B2B recovery globally
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 10Strong balance sheet and liquidity position
1.5x LIQUIDITY
No financial covenants on bonds and syndicated credit facility
Net Debt / EBITDA
(Dec 31st, 2020)
€4.5bn Maturity Profile, Senior Bonds
Cash & cash Average time to maturity 5.8 years
equivalents 2021 maturity of €750m senior bond was redeemed in Q1 2021.
(Dec 31st, 2020)
€m
Leases 10,459 €2.0bn
Syndicated credit
Related to multi-
year commitment facility runs until 2025
on operating (undrawn)
assets 8.677
>€1.3bn
0 500 500 700 1.250 500 750 750 750
Bilateral uncommitted
202
202
202
202
202
202
202
202
202
203
203
203
1
2
3
4
5
6
7
8
9
0
1
2
2.469
in €m credit lines (undrawn)
Net Debt EBITDA
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 11Sustainable improvement in cash generation puts us in
position to balance growth investments and shareholder
returns
New
2021/22
SBB Long-standing Finance Policy
In m€
provides definition of excess liquidity
FCF 2016/17 and clear principles on its usage
2.535
Dividend payment Share
Buyback Strong 2020 FCF lead to significant
excess liquidity generation in 2020
In line with Finance Policy principles,
1.422 new Share Buyback program
announced on March 8th:
Size: up to €1bn
Schedule: 12 months
FY 20
First period of excess liquidity excess Start: May 2021
liquidity
2010 2011 2012 2013 2014* 2015 2016* 2017* 2018 2019 2020
*2014: Adjusted for voluntary pension funding (€2bn) and non-recurring items; Adjusted for voluntary
pension funding (2016: €1bn, 2017: €0.5bn)
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 12Shareholder return based on strong operating performance –
Executing on our Finance Policy
Proposed dividend increase to €1.35 for FY 2020, up 17% yoy
FINANCE POLICY
€1,35
Target / maintain rating BBB
€1,15 €1,15 €1,15 Dividend payout ratio to remain between 40–60%
€1,05
of net profit (continuity and Cash Flow performance
€0,85 €0,85 considered)
€0,80
€0,65
€0,70 €0,70 FY20 dividend proposal: €1.35; 49% pay-out
60%
Excess liquidity will be used for share buybacks
59% 58%
53% 49% 50% 52%
55% 55% 49% and/or extraordinary dividends
46% 48%
40%
€1bn share buyback program announced
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Underlying Payout Ratio 1)
Dividend payment of €1.7bn to DPDHL shareholders, subject to approval of AGM on May 6th
1) Adjusted for non-recurring items when applicable
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 13CONNECTING
DPDHL GROUP IS A DIFFERENT,
PEOPLE.
BETTER COMPANY THAN BEFORE IMPROVING
STRATEGY 2015/2020 LIVES.
BETTER MIX, HIGHER
CONSISTENT, LEADING TO RECORD
RETURNS,
SUSTAINABLE FINANCIALS AND
STRONGER CASH
STRATEGIC AGENDA SHAREHOLDER
FLOW & BEST TEAM
ALONG ALL METRICS RETURNS
EVER
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 14Content
DPDHL Group Highlights
Page 3
Strategy 2025
Page 15
Divisional Deep-Dives
DHL Express (page 26), DHL Global Forwarding, Freight (page 32), DHL Supply
Chain (page 38), DHL eCommerce Solutions (page 45), P&P Germany (page 51)
Financial Backup
Page 57
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 15Strategy 2025 – Sustainability is integral along all dimensions
Our purpose guides our efforts and
Our Purpose
sense of responsibility
Connecting people,
improving lives
Our Vision
We are THE logistics company
for the world Our values are in line with
Our Values sustainable behavior
Respect & Results
Our Mission
Excellence. Simply delivered. We want to achieve our mission
Along the three bottom lines in a sustainable way sustainably along the triple bottom line
Enabled by Common DNA
Our Business Unit focus
Strengthening the profitable core
We aim to create long-term value in our
businesses by focusing on
Supported by Group functions
our profitable core
Digitalization
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 16Managing along integrated bottom lines since 2009 –
Particularly important and successful in 2020
EMPLOYER OF CHOICE PROVIDER OF CHOICE
Number of employees increased by +20k to Keeping our customers’ supply chains
570k in 2020 running despite COVID-19 challenges
Employee Opinion Survey (EOS) shows Net Promoter Scores (NPS) further
record employee engagement score increasing
SUSTAINABLE DEVELOPMENT INVESTMENT OF CHOICE
37% improvement in Carbon Efficiency (2007 Record Group EBIT and FCF
base year), up further 2 index points in 2020 Dividend proposal of €1.35, new €1bn
SBB announced
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 17CONNECTING
PEOPLE.
Our Sustainability Roadmap IMPROVING
LIVES.
Clean operations Great company Highly trusted
for climate protection to work for all company
>80%
Reduce emissions to
External reporting in line withClean operations
for climate protection
All modes to contribute to targeted
reduction of CO2 emissions – key
Target >30% sustainable Electrify 60% of our last-mile
contribution to be achieved on aviation aviation fuels blending delivery vehicles by 2030
emissions by 2030 Grow sustainable fuel share
in line-haul to >30%
Science-based target for CO2 reduction:
Reduce our emissions to under 29m tonnes
CO2e by 2030
Offer green alternatives Carbon neutral design to be
for all our core used for all new owned
products/solutions buildings
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 19Great company
to work for all
We take action to provide a safe, inclusive
and engaging working environment for all
Attract and retain best talent Put safety first and reduce LTIFR
our employees. and reach a consistent >80% (lost time injury frequency rate)
score on Employee to below 3.1 by 2025
Engagement in EOS
Being “best-in-class" in Increase share of women in
our industry when it comes to management to 30% by
respect for Human Rights 2025
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 20Highly trusted
company
We take action to ensure trusted,
transparent and compliant business Train all employees in relevant
management positions on the Ensure that our information
practices every day, everywhere
Group’s compliance & data security capability is positioned
protection standards in the top quartile of our industry
ESG metrics fully integrated Build sustainable and resilient
into governance and incentives supplier relations based on our
Supplier Code of Conduct
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 21ESG targets fully integrated into new proposed
management remuneration
Bonus payment schedule for
2020 & 2021 20221) annual bonus and deferral
12,5 10 50% paid in current year if
25% other 30 % ESG
10
bonus criteria achieved
targets Individual Targets targets Environment
12,5 50% payout of achieved bonus
10 Social
10
Employee deferred by additional 2 years*
Engagement
10 Governance
Free Cash Flow
10
10 Free Cash Flow
EAC
2 Divisional
EAC Divisional2)
75% financial EAC Group 70 % financial
targets targets EAC Group
55 50
* Medium-term component will only be paid out if
EAC target is reached during the sustainability
phase; at least the cost of capital was covered
Criteria for Annual Variable Pay Criteria for Annual Variable Pay
1) Proposal to AGM 6 May 2021; 2) Divisional EAC: only applicable for Divisional CEOs
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 22Broad range of e-commerce offerings across the Group
All figures for FY 2020
Domestic delivery Cross-Border delivery
Germany International Deferred Premium TDI
P&P Germany DHL eCommerce Solutions DHL Express
>40% 12 Focus
Non-TDI cross-border
~1m
Parcel Market Share Countries with own domestic TDI shipments/Day
parcel delivery, t/o 8 in Europe delivery to/from and within
(UK, NL, BE, SE, PL, CZ, ES, PT) Europe
~5.9m 45%+
Parcels per day (2020)
~1.1bn European Express B2C Share
destinations served through
>100k 220+
parcels delivered in 2020 Parcel Connect platform – via
own delivery and partners
Parcel Business customers countries & territories served with pick-
eFulfillment
up and delivery
DHL Supply Chain
~6,650 ODD*
Parcel Lockers ~50% ~30k B2C-adapted recipient tool
Growth in eCommerce new Employees active in eCommerce
business signings operations globally
* On-Demand-Delivery
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 23DIGITALIZATION @DPDHL GROUP
As seen at IR Virtual Tutorial…
DGF myDHLi DSC Accelerated Digitalization Data Analytics
Operational Routing Product Classification
Volume Prediction Optimization for Customs
Invoice
Staff Scheduling Geocoding
Overdue Risk
Further ongoing initiatives
Packstation expansion: 7000 by 2021 Postal mail notification Parcel delivery: 15min notification & live tracking Mobile stamps
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 24Content
DPDHL Group Highlights
Page 3
Strategy 2025
Page 14
Divisional Deep-Dives
DHL Express (page 26), DHL Global Forwarding, Freight (page 32), DHL Supply
Chain (page 38), DHL eCommerce Solutions (page 45), P&P Germany (page 51)
Financial Backup
Page 57
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 25Global TDI market share (2016)
DHL: 38%
DHL UPS: 22%
FedEx: 29%
EXPRESS Others: 11%
Source: Market Intelligence 2017 on 2016 market data based on revenue, annual reports and desk research
Profitable Core Revenue Mix, FY 2020
Time Definite International (TDI) service
76%
for premium, cross-border delivery of
Time Definite International
time-critical parcels and documents Day Definite International &
Time Definite Domestic
10%
Air Capacity Sales and Others 14%
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 26DHL Express: Continued strong B2C e-commerce growth
coupled with B2B recovery
Q1 showed continued B2C strength and B2B recovery… …confirming B2B upward trend from Q2 trough
Time Definite International (TDI) Shipments/Day (SpD) growth Time Definite International (TDI) Shipments/Day (SpD) growth
26.3% B2C >45%
17.3%
15.8%
0.6% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
-0.2%
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 B2B >10%
Comments:
Continued strong B2C e-commerce growth & further B2B recovery drove strong
TDI volume growth, with all regions contributing significantly
TDI Revenue/day up +37.9%, outpacing TDI SpD based on higher
weight/shipment, emergency surcharge and ongoing yield management
B2B e-commerce adds another growth vertical with strong fit to TDI network and
capabilities – see also recent IR Tutorial on Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
https://www.dpdhl.com/en/investors/events/capital-markets-event.html
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 27Express TDI volume growth, quarterly growth ranking
#1 EU MEA MEA MEA AM EU MEA EU MEA EU EU AM AM AP AM MEA AM
#2 MEA EU AM AM MEA MEA EU AM EU MEA AM EU EU AM MEA AM EU
#3 AM AM EU EU EU AM AP AP AP AM AP AP AP EU AP EU AP
#4 AP AP AP AP AP AP AM MEA AM AP MEA MEA MEA MEA EU AP MEA
890 978 904 964 908 1.044 949 1.027 962 1.100 955 1.025 1.114 1.290 1.205
825 863
Q1 yoy: +26%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2017 2018 2019 2020 2021
FY 2017: +9.9% FY 2018: +7.5% FY 2019: +5.7% FY 2020: +8.7%
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 28E-commerce is a profitable
growth driver for DHL Network
Characteristics
B2C
Characteristics
Profitability
Impact
Express Shipments
per Day
Volume growth drives better
utilization of existing network
Weight per
Shipment
Lower weight per shipment
2013 2019 2020
Revenue
per Kilo Higher RpK related to lower WpS
B2C
volume 10%+
35%+ 45%+
Share First mile More pieces per stop at pickup
Better utilization of existing
Hub sort infrastructure, with high degree
Better utilization of existing capacity,
EBIT 9% 12% 14%
Airlift with lower WpS being advantageous
margin
Optimize residential delivery via On
Demand Delivery & Drop Off Locations
Last Mile and increased delivery density due to
B2C Growth
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 29DHL Express:
To serve our global network, we run more than just an airline
Dedicated Air Purchase Air
>2200 500 21
>280 15 >300 daily flights airports air hubs
aircrafts partner airlines commercial airlines (3 global; 18 regional)
Dedicated Air: Snapshot of DHL network flights Dedicated fleet (without feeders)
2010: ~150 planes 2020: >240 planes
Intercontinental Network Regional Networks
>50 Intercontinental >230 Regional
Owned Leased
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 30EXPRESS
Continued growth of absolute EBIT
Continued, but more incremental margin expansion
FINANCIAL TDI
Volume
Structural trend: +4% to +5%.
Volatile in 2020. Expect growth rates to
OUTLOOK
Growth trend back to initial assumptions over
time
Ongoing Capex spend of €~1bn p.a.
B777 Capex : €180m (2018); €1.1bn (2019), €321m
(2020),Market Position (2020)
DHL GLOBAL Air Freight #1
FORWARDING,
Ocean Freight #2
Road Freight (EU) Leading position in a
FREIGHT
highly fragmented
market
Profitable Core
Revenue Mix, FY 2020
International transportation of Air
Freight, Ocean Freight and Road Freight 39%
Air Freight
including Customs Clearance and related Road Freight 27%
value-added services like warehousing, Ocean Freight 22%
cargo insurance, etc.
Others 12%
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 32DHL Global Forwarding, Freight: Volumes recovering in
tight markets
Air Freight (AFR) Ocean Freight (OFR) AFR volume growth yoy
18.2%
Gross Profit Gross Profit
+27.0% +45.3%
Gross Profit/ton Gross Profit/TEU -9.5%
-4.6%
+7.5% +33.5% Q1 2020
-16.4%
Q2 2020
-13.9%
Q3 2020 Q4 2020 Q1 2021
OFR volume growth yoy
Comments:
Recovery of industrial activity globally drives OFR and AFR volumes back into 8.8%
solid growth, while rates and GP/unit remain at elevated levels
GP development supported by optimization of product mix, e.g. increasing LCL
(Less-Than-Container-Load) share in OFR -4.2%
-7.3%
Core IT upgrade accomplished: new Transport Management System (TMS) in -10.5%
OFR and AFR fully rolled out
-20.7%
DGF conversion up to 27.5% (Q1 2020: 10.7%, increase of +157% yoy)
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 33DGFF – Emerging new rivals do not pose imminent risk of disruption
Gaps to close ?
• Back-end IT infrastructure
• Own setup (physical) globally
• Operational expertise
• Global sales force
Digital Capabilities
Digital • Carrier relationships
Forwarders
Incumbents
Gaps to close
• Modern, fully-integrated IT infrastructure
• Digital customer interaction tools
Global network
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 34The lifecycle of a shipment is a complex process and
technology investments are key to success
Take control Create documents
Plan route of goods from for export compliance Manage transport
& organize Customer & customs to port/airport
shipment Consolidation Manage loading
Quotation & export process
process
Ensure goods
Goods are shipped
App-based IT System
to be shipped Online tracking tools Upgrades
App-based
tracking tools
Quotation
Tools
Real-time Ensure
Digital
tracking shipment
analytic
platform stays on track
tools
IT System
Upgrades App-based
tracking tools IT System
Billing Upgrades
& payments
Accept delivery
at port/airport
Transport to warehouse
or final destination
Manage documents for import
compliance & customs process Step in the lifecycle of a shipment
System or technology support
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 35With IRR & Digital Customer Interaction DGF is enhancing
customer experience while increasing operational efficiency
myDHLi 360° VISIBILITY COLLABORATION FULL ACCESS MANAGED BY CUSTOMER
External
QUOTE + BOOK TRACK DOCUMENTS ANALYTICS
IT Renewal Roadmap (IRR): Our Digital Backbone established
Internal
New TMS Paperless Quotation Track + trace / shipment Steering Logic … and many more
forwarding tool visibility
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 36EBIT/GP Conversion improvement of 100-200 bps
p.a. (with basis from 2018)
Long-term target: 30% DGF conversion. 5-6% DGFF
EBIT Margin
DGFF Initial* market growth assumptions (2018-25):
Air Freight +1-3%
FINANCIAL
Ocean Freight: +2-4%
Road Freight: +3-4%
Market significant down in 2020. Return to initial
OUTLOOK
assumption depending on recovery shape beyond
2020.
Capex: Flat / slightly increasing from FY 2020 levels
(€104m)
CargoWise1 implementation for both Air and Ocean
Freight is fully rolled out
*as introduced at Capital Markets Day in 2019
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 37Market Position (2019)
Market share: Top 5 players in contract logistics
DHL
DHL: 5,9%
XPO Logistics:
2,4%
Kuehne+Nagel:
SUPPLY CHAIN
2,2%
CEVA: 1,7%
Hitachi
Transport
System: 1,6%
Profitable Core
Source: company estimates; Transport Intelligence. Market share is presented on the basis of divisional revenue.
Manage supply chains to reduce complexity Revenue Mix, FY 2020
for our customers. Our profitable core Retail 28%
includes warehousing, transportation as Consumer 23%
well as key solutions like e-Commerce, Lead Technology 13%
Auto-mobility 13%
Logistics Partner (LLP), Service Logistics, Life Sciences & Healthcare 10%
packaging and real estate solutions Engineering & Manufacturing 5%
Others 8%
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 38DHL Supply Chain: New business wins, gradual B2B
recovery & improved processes drive significant earnings
growth
DHL Supply Chain – Reported EBIT Margin Organic revenue growth yoy
5.2%
5.0% 5.0% 4.7%
2.1%
3.6%
3.2%
-1.9%
1.2%
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Comments:
Second consecutive quarter of return to sales growth driven by new business -13.1%
wins, continuously good contract renewal rate and gradual B2B volume
recovery Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Margin back to ~5% target level supported by efficiency improvements, a.o.
from digitalization
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 39DHL Supply Chain offering attractive strategic
solutions across the whole supply chain
As the world’s leading contract logistics provider
we create competitive advantage for our
customers by delivering exceptional operational
DHL Supply Chain portfolio of key solutions 1) service as well as innovative and sustainable
solutions across the supply chain.
We leverage thorough depth of knowledge of
market and its dynamics, with highest standards
Lead Logistics Partner
and with a benefit of unrivaled environmental and
Transportation Solutions safety credentials, along with state-of-the-art
technology and an attractive portfolio of
Service Logistics
solutions.
Inbound to Manufacturing B2B Warehousing Distribution
Returns
eFulfillment & Management
Omni-channel
Over 502) 12.537€m
Packaging Countries served Revenue in 2020
Real Estate
Solutions
Further customer specific services on demand
~1,500 3) ~15 MIO3,4)
Locations Square meters
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 1) Not exhaustive 2) Countries with significant Supply Chain revenue; 3) Data correct at 40
December 2020; 4) Incl. DHL owned and leased warehouse space only and not customer
owned facilities operated by DHL; as of December 2020Offering globally consistent and innovative solutions to
our customers through modular standardization
High project management standards
Best in class solutions Flexible automation solutions Globally standard project management
Flexibility to build end-to-end customized solutions at Focused deployment approach through methodology ensuring smooth and fast setup
increased speed due to modular building blocks Accelerated Digitalization Program and of new operations
compromising solutions design, IT and Operations optimal orchestration of robotics and people
catering specific needs e.g. eCommerce resources through Robotics Hub. Data analytics for operational improvements
Data is being collected in a coherent way and
decisions are made by artificial intelligence e.g.
warehouse labor optimization
Operations Management System First
Choice
Holistic approach to drive productivity and End-to-end
continuous improvement through visibility across the
processes, behaviors, infrastructure and whole Supply
tools including coaching and incentives. Chain
Globally consistent operating standards Real time data based decision taking
Labor management
Minimum standards for key processes and tools Standard reporting tools provide real time
Standards implemented incl. labor
e.g. for labor management and quality defined for financial and operational insights for
management tools, consistent introduction
all operations. customers and operations enabling agility
and training, allowing scaling in line with
demand and labor sharing across and decisions at the right level.
operations.
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 41DSC is uniquely positioned to cater for
e-commerce growth
Fully integrated end-to-end IT solution for e-Fulfillment
eCommerce is a focus product for DSC with
~20% of its global staff already working in
eFulfillment operations
The 53% YoY growth in eCommerce new
business in 2020 was an acceleration of the
growth over past years due to the pandemic
The growth is fueled by the priority areas that
DSC is focusing on:
• Pure e-commerce for brand manufacturers
• Pure e-commerce retailers / etailers,
marketplaces
• Omni-channel centralized and combined
B2C/ B2B fulfillment
• Regional fulfillment networks across multi
user locations
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 42DHL Supply Chain is leveraging digitalization across all
operations to increase efficiency and customer value add
Accelerated Digitalization and Data Analytics (as of 12/2020) Business Model
Digitalization
1,700+ 60% 800+
projects deployed of staff touched by AD sites touched
750+ Collaborative robots deployed
Examples below:
15.000+ smart • UK’s first and Europe’s
wearable devices deployed largest truly digital freight
Indoor Robotic Transport platform (DFP)
• DigiHaul matches
customer demand for
200+ analytics projects transport load and capacity
Assisted Picking to optimize our operations through digital platform
Robots* by artificial intelligence
Standard IT-Robotics integration layer DHL Robotics Hub
allowing plug-and-play robotics deployment and orchestrating
labor and robotics in most efficient way
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 43DSC
FINANCIAL EBIT margin at ~5%
OUTLOOK
Capex outlook: Slightly increasing from FY 2020
levels (€351m) driven by new business wins and
including investments in digitalization
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 44DHL
ECOMMERCE Revenue Mix, FY 2020, in €m
SOLUTIONS
Europe 2.618
Americas 1.629
Profitable Core
Domestic last mile parcel delivery in Asia 593
selected countries outside of Germany
(Europe, USA and selected Asian
emerging markets).
Non-TDI cross-border services primarily
to/from and within Europe.
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 45DHL eCommerce Solutions: International expansion of
e-commerce capabilities fully paying off
Revenue growth, Q1 2021 DeCS, Organic revenue growth, yoy
51.8%
Netherlands Czech Republic
>60% >50% 40.4%
United States Cross Border Solutions 31.2%
>60% >50%
17.4%
Comments:
Strong e-commerce growth continues across all DHL eCommerce Solutions
networks
Unchanged assumption: expect continued structural e-commerce growth, with
-1.2%
normalization in the course of 2021
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 46DHL eCommerce Solutions: Regions and service portfolio
EUROPE
Pan-European cross-border shipping
via DHL Parcel Connect platform
AMERICAS Domestic delivery in 8 countries:
Nationwide domestic United Kingdom, Netherlands,
delivery in the United States Belgium, Poland, Spain, Portugal,
Cross-border from US and Czech Republic, Sweden
Canada
ASIA PACIFIC
Blue Dart in India: nationwide domestic
courier delivery and integrated express
parcel distribution
Nationwide domestic and cross-border
delivery in Thailand, Malaysia and Vietnam.
Cross-border shipping from China, India,
Australia and Singapore
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 47DHL eCommerce Solutions: Key stats at a glance
>1.1 billion 35 22,500 2,400
parcels delivered each year Country Offices Vehicles Facilities
45,000 >70,000 6
Employees Access Points Dedicated Aircraft
Data as of 31.12.2020
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 48E-commerce: Profitable expansion into international parcel markets
International Domestic and cross-border Parcel delivery – DHL eCommerce Solutions
BUILD SCALE CONTRIBUTION
Before Strategy 2020 DHL eCommerce Solutions Expectation (CMD 2017, p.22)
Revenue development1) Strong revenue growth driven
Hamburg
Berlin
by e-commerce trend and portfolio
expansion
Munich
in €bn 4.8 EBIT contribution by 2020 will also depend
on trajectory of further portfolio expansion
Positive but not yet significant
Today EBIT contribution in 2020
1.6
2020 results:
• DeCS EBIT: €158m (3.3% margin)
2013 2014 2015 2016 2017 2018 2019 2020 • Expect further growth on this base
1) Since 2019, international parcel operations are combined under the new
eCommerce Solutions division. Prior to that, part of PeP division (DHL
Parcel Europe + DHL eCommerce)
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 49DeCS Positive EBIT contribution in 2020 (FY 2020: €158m)
FINANCIAL
Mid-term: 5-10% sales growth with gradual margin
expansion towards 5% long-term margin across all
businesses
OUTLOOK Average Capex spend of ~€200m p.a. over 2019-
2022
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 50Market Position (2020)
~63% Market share Mail Communication
POST & PARCEL
(business customers)
>40% Market share Parcel
GERMANY
Profitable Core Revenue Mix, FY 2020
Transporting, sorting and delivering of
Parcel 36%
documents and goods-carrying
shipments in Germany and export. Post 49%
International & Others 15%
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 51Post & Parcel Germany: Historic volume trends remain at
elevated levels
Mail Communication &
Parcel Germany, yoy Dialogue Marketing, yoy Parcel volume growth yoy
41.3%
Volume Volume
+41.3% -9.5% 21.4% 23.3%
11.6%
3.3%
Revenue Revenue
+44.7% -4.7% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Mail volume growth yoy
Comments:
Parcel growth stayed at strong growth levels throughout Q1 – unchanged
expectation for fundamental structural growth in e-commerce, with
normalization expected in the course of 2021 -5.6%
-7.1%
Mail volume decline remains worse than historic trend of -2 to -3% -9.4% -9.5%
-16.8%
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 52P&P Germany: Products and Pricing
P&P revenue Pricing
FY20: €16.5bn
Ex-ante products
Jul 2019: 10.6% increase for 2019-2021 period (incl.
– private customers (€1.0bn)
international)
Mail Communication – business customers (€1.6bn)
€5.5bn Partial services
2020: 3-4% through reduction of discounts
– business customers (€1.9bn)
Other (€0.9bn)1) Partially increased in 2020/2021
Dialogue Marketing Addressed and undressed advertisement mailings,
Partially increased in 2020/2021
€1.8bn campaigns (both digital & physical)
International Depends on the product category: Partially increased
In- and outbound Germany shipments
€2.4bn in 2020/2021
Other
Press, pension services, retail Partially increased in 2020/2021
€0.8bn
Top accounts (~470 customers) Pricing varies by contracts.
Business
Middle accounts (~20k customers) Stronger price increase than historically in 2020.
Parcel Germany customers
Small accounts (~85k customers) Last increase: January 1st 2021.
€5.9bn
Private customers Listed prices in retail outlets and online
1) e.g.: small items eCommerce, Philately, “Postzustellungsauftrag“
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 53Topline Germany: Standard letter stamp price
development is based on regulated price cap
Pricing headroom
for basket of
No price increase
mail products
headroom before 2011
+1.2% +2.8% +1.6% +1.0% +7.5% +10.6%
under regulated
price cap Carried over
to 2013
German standard letter price, in € cents
80 80 80
70 70 70
60 62
58
55 55 55 55
NEXT REVIEW:
Expected by
end of 2021
for the period
starting
January 2022
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020 2021
Price cap
CPI – 1.8% CPI - 0.6% CPI - 0.2% CPI + 5.8% CPI + 5.4%
regulation
*implemented from July 1st 2019 onwards, taken into account in headroom calculation
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 54P&P Germany: Wage deals in Germany
Wage increases for P&P Germany employees, yoy in %
4.0
3.1 3,0 Current agreement
3.0
applies to ~140,000
2.6 Deutsche Post tariff
2.0 2.1 2,0 employees.
1.7
Contract period:
Sep 1st 2020 -
Dec 31st 2022
0,0 0,0 0,0 0,0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
One-time
Flat €320 €400 €400 €250 €300
payment
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 55EBIT 2021
Guidance: ~€1.7bn
Mid-term: Slow topline growth with stable EBIT
P&P GERMANY
margin
Structural trend:
FINANCIAL Volume
Mail: -2% to -3% p.a.
Parcel: +5% to +7% p.a.
Stronger Parcel growth and Mail decline seen
OUTLOOK in 2020. Expect growth rates to trend back to
initial assumptions over time
Capex: Flat / slightly increasing from FY 2020
levels (€590m)
Wage increase for tariff employees: 3% from Jan 1st 2021
and 2% from Jan 1st 2022.
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 56Content
DPDHL Group Highlights
Page 3
Strategy 2025
Page 15
Divisional Deep-Dives
DHL Express (page 26), DHL Global Forwarding, Freight (page 32), DHL Supply
Chain (page 38), DHL eCommerce Solutions (page 45), P&P Germany (page 51)
Financial Backup
Page 57
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 57DPDHL Group at a glance
DHL Global
DHL eCommerce
GROUP DHL Express Forwarding, DHL Supply Chain P&P Germany
Solutions
FY 2020 Freight
Revenue €66,806m €19,135m €15,914m €12,537m €4,829m €16,455m
EBIT €4,847m €2,751m €590m €426m €158m €1,592m
EBIT Margin 7.3% 14.4% 3.7% 3.4% 3.3% 9.7%
FTEs* 502,207 99,365 42,376 159,152 29,819 158,889
Network business Brokerage Outsource Network business Network business
– asset intensive – asset light – asset light – asset intensive – asset intensive
*average for the year
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 58Q1 2021 Group P&L in €m Q1 2020 Q1 2021 vs. LY Revenue 15,464 18,860 +22.0% EBIT 592 1,911 +222.8% Financial result -151 -154 -2.0% Taxes -106 -492 -364.2% Consolidated net profit* 301 1,190 +295.3% Basic EPS (in €) 0.24 0.96 +300.0% *attributable to DPDHL Group shareholders HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 59
Q1 2021 Cash Flow Statement in €m Q1 2020 Q1 2021 vs. LY EBIT 592 1,911 +1,319 Depreciation, amortization and impairment losses 1,021 930 -91 Change in provisions -26 9 +35 Income taxes paid -168 -273 -105 Changes in working capital -758 -94 +664 Other 89 7 -82 Operating Cash Flow 750 2,490 +1,740 Net Capex -571 -667 -96 Net cash for leases -578 -629 -51 Net M&A -5 -2 +3 Net interest -5 -9 -4 Free Cash Flow -409 1,183 +1,592 HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 60
Capex development 2019-2023e
Group gross capex, in €m
~3.800 ~3,600 Group
3,617 2,999 DGFF
DSC, DecS
981 Corp Functions
1.069
P&P, EXP
1.448 1.697
2019 2020 2021 guidance
Guidance Yearly average 2022-2023
Note: Capex expectation includes full gross capex spend related to 2018 & 2020 Boeing 777 orders
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 61Group ROCE trending further up: returns increasing on
higher asset base
Increasing returns under Strategy 2015 / 2020 – positive trend continued after lease accounting rebasement
Group ROCE vs WACC Under IFRS16 as of FY18
14,7%
14,1%
12,3% 12,4%
11,1%
11,6% 11,9% 11,4%
10,8%
9,0%
WACC (8.5%)
6,8%
2010 2011 2012 2013 2014 2015* 2016 2017 2018 2019 2020
*2015 EBIT adjusted for NFE-write off
ROCE = EBIT / (Total assets – current liabilities)
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 62Balance sheet continues to show healthy leverage ratios
47.9% 25.5% 1.7x (2019) 1.5x (2020) 9.9x
Net Gearing Equity Ratio Net Debt / EBITDA Net Interest Cover
All figures in €m, FY 2020
55,307 12.928
Pension Provisions
Other Provisions
Current liabilities 8.677
Non-current liabilities 4.847
Equity
489
Total Equity Net Debt EBITDA EBIT Net interest paid
& Liabilities
31.12.2020
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 63DPDHL Group Pensions – DB and DC plans
in €m
Defined Benefits Defined Contribution (Cash out ≈ staff costs in EBIT)
Defined Benefit Obligation Staff Costs* & Change in Provisions Civil Servants in Germany Hourly workers & salaried employees*
* Excluding one-offs *mainly outside Germany
516
493
461
5.815 449
4.326 409
376
193 162 347 352
187 317 305 300 307
193
227
13.849 13.699 218
264 266
230
168
83 96
2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020
Dec 31st 2020 Mar 31st 2021
Plan Assets Net Pension Provision Current service costs Change in provisions
Discount Rate (DBO) Germany UK Other Total
Mar 31st 2021 1.40% 2.00% 1.46% 1.58%
Dec 31st 2020 0.80% 1.20% 1.06% 0.95%
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 64Investor Relations Contact
Martin Ziegenbalg Robert Schneider Sebastian Slania Agnes Putri
+49 228 182 63000 +49 228 182 63201 +49 228 182 63203 +49 228 182 63207
m.ziegenbalg@dpdhl.com robert.schneider1@dpdhl.com sebastian.slania@dpdhl.com a.putri@dpdhl.com
HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 65Disclaimer 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 statements. Many of these risks and uncertainties relate to factors that are beyond Deutsche Post AG’s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. Deutsche Post AG does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation. This presentation does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor shall there be any sale, issuance or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law. Copies of this presentation and any documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from Australia, Canada or Japan or any other jurisdiction where to do so would be unlawful. This document represents the Company‘s judgment as of date of this presentation. HSBC Virtual Transport & Logistics Conference | Martin Ziegenbalg | 10 June 2021 66
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