CEO FRANK APPEL AT THE ANNUAL GENERAL MEETING: “WE ARE SHAPING THE FUTURE OF LOGISTICS”
Press Release: Bochum/Bonn, Germany 04/28/2017
"2016 was an excellent year for us and we have a clear idea of what the future of logistics will look like," said CEO Frank Appel at the Annual General Meeting in Bochum on April 28.
- Group ends financial year 2016 with record earnings: payout to be increased to EUR 1.05 per share
- Earnings targets confirmed for 2017 and beyond
- Carbon efficiency target for 2020 reached ahead of schedule; zero-emissions logistics to be achieved by 2050
- Digitalization, innovations and e-commerce driving growth
After a record year in 2016, the world’s leading mail and logistics company, Deutsche Post DHL Group, is facing the future with confidence. “2016 was an excellent year for us and we have a clear idea of what the future of logistics will look like. We are investing in expanding our network and in technology. We are working in a focused and connected way – and we will continue to grow,” said CEO Frank Appel at the Annual General Meeting in Bochum on April 28. At the same time, he confirmed the Group’s ambitious targets. Operating profit is to rise from EUR 3.5 billion to around EUR 3.75 billion in 2017. The CEO also confirmed the Group’s medium-term goal of increasing EBIT by an annual average of more than 8 percent between 2013 and 2020.
Speaking to shareholders, Frank Appel voiced his optimism that global trade would continue to grow despite mounting protectionist tendencies. “World trade drives prosperity, and prosperity promotes peace,” he said in Bochum. “We therefore don’t need less globalization, but more – and we need it now and sustainably.” He explained that countries should invest more heavily in education and infrastructure in the interests of long-term growth. Deutsche Post DHL Group connects people and markets all over the world, he said, stressing that the company would continue to serve as an advocate of free trade and global interaction in the future. “Logistics is the backbone of global trade,” he said, adding that global team work was impossible without it. Against this backdrop, he believes that Deutsche Post DHL Group is exceptionally positioned as the global industry leader: “Of all logistics service providers, we have the strongest global presence. We have the widest range of offerings and most extensive experience. We know how logistics works and, as the market leader, we have a clear idea of how our industry can continue to contribute to global prosperity,” he added.
A pioneer in climate-friendly logistics – Target: zero emissions by 2050
Deutsche Post DHL Group is also committed to making a positive contribution to climate protection. In this respect, it has exceeded its own goals and passed an important milestone, according to Appel: In 2008, the Group set itself the target of improving carbon efficiency by 30 percent over the 2007 baseline. “We achieved the goal in 2016 – four years ahead of time. We are proud of this. But now is the time to move forward with even larger strides.” Deutsche Post DHL Group is aiming to reduce logistics-related emissions to net zero by 2050.
In order to achieve this ambitious long-term goal, the Group will be using four specific interim targets that are to be reached by 2025. For instance, the company intends to increase its carbon efficiency by 50 percent against 2007 levels. Local air pollution emissions will be reduced by using environmentally-friendly pick-up and delivery solutions, including bicycle delivery and e-mobility options, for 70 percent of its own first and last mile services. More than 50 percent of sales will incorporate green logistics solutions. In addition, the Group will engage 80 percent of its approximately 510,000 employees around the world on environmental issues with special GoGreen training sessions and will collaborate with partners to plant one million trees each year. With this, Appel said, Deutsche Post DHL Group would be making its own contribution to limit global warming to less than two degrees Celsius.
Rethinking logistics: market leader in a digital world
Additionally, Appel re-affirmed the Group’s aspiration to also set standards in a digital world. In the long term, the companies that are successful will be those that seize change as an opportunity and deploy new technologies intelligently, he said. Deutsche Post DHL Group is a pioneer in many areas. The company has proven its ability to innovate by trialing the DHL Parcelcopter, and the Supply Chain division has very successfully tested robots that ease the workload of warehouse operatives, he said. He also noted that the Freight division had launched Saloodo!, a virtual market place that brings shippers and transport providers together, adding that “new technologies offer new opportunities for the next step. They make things easier and more productive – for our customers and for ourselves.”
E-commerce logistics offering growth opportunities in all divisions
Under the Group’s Strategy 2020, all divisions are focusing on consistently leveraging growth opportunities – particularly through the sustained growth in online commerce. Deutsche Post DHL Group covers the entire supply chain with its four divisions – from order processing through warehousing to cross-border delivery.
Appel re-affirmed the Group’s goal of being the market leader in e-commerce-related logistics. To this end, the company was continuing to invest steadily in the expansion and modernization of its infrastructure in this area. It would be establishing a further “parcel center par excellence” at the former Opel site in Bochum with a capacity of up to 50,000 items per hour. He reported that 600 new jobs were planned here. Construction of this facility is expected to begin in the coming months. The Group had already launched a similarly sized parcel center in Obertshausen in the Frankfurt region in June 2016, also creating 600 new jobs there.
A modern, efficient parcel infrastructure is providing a foundation to systematically develop products and services that meet the needs of the booming online commerce sector. The Group launched the new “DHL Paket Prio” service for business customers in Germany who need to send 50 or more parcels a day. This product offers a next-day delivery money-back guarantee. The Group plans to roll out the service throughout Germany in the long term following a pilot phase in Leipzig, Würzburg and Nuremberg.
The international parcel business also promises further growth. Here, too, the Group is expanding its network to capitalize on the boom in online commerce. The creation of the “United Parcel Nations of Europe” is progressing rapidly, according to Mr. Appel. He reported that DHL Parcel Europe now operates in 22 countries. Deutsche Post DHL Group is also moving into lucrative e-commerce markets outside of Europe, recently launching DHL eCommerce in Malaysia and Chile. With the right logistics partner, online commerce makes people’s daily lives easier, Appel said, adding that “Deutsche Post DHL Group is such a partner.”
Innovation leader in electromobility-based logistics
Deutsche Post DHL Group is also an innovation leader in the logistics industry when it comes to electromobility. Since 2013, the Group has been producing its own environmentally friendly, electrically powered delivery vehicle – the StreetScooter – which is tailored to meet the needs of parcel delivery workers. With some 2,500 StreetScooter vehicles on the road, Deutsche Post DHL Group already operates the largest commercial electric fleet in Germany. The company plans to at least double the number of self-produced electric vehicles by the end of the year.
In addition, speaking in Bochum, CEO Frank Appel announced that Deutsche Post DHL Group now also intended to sell the StreetScooter to outside customers, such as municipal enterprises and strategic partners. With this aim in mind, the Group will be expanding its production capacity significantly from a current 10,000 vehicles to 20,000 by the end of the year. Through this investment, Deutsche Post DHL Group is underlining its aim of being a driving force behind electromobility and becoming the market leader in green logistics.
Review of the record year in 2016
Appel expressed his great satisfaction with the results of the past financial year. “2016 was a record year. We achieved a great deal,” he said. “We successfully invested in growth, refined our processes and launched new products on the market. All this bore fruit and improved our results.” The Group increased its operating profit (EBIT) by 45 percent to EUR 3.5 billion, thus meeting the earnings target that had been announced for 2016. With EBIT coming to EUR 1.11 billion in the final three months, the Group recorded the best operating quarter in its history.
Appel was particularly pleased that all divisions had contributed to this positive performance. Post - eCommerce - Parcel (PeP) posted the highest earnings since 2008, while DHL Express and Supply Chain were able to increase their margins and achieve record earnings. Global Forwarding, Freight also improved considerably in a persistently difficult market environment.
Highest dividend proposal in the company’s history
In light of the Group’s successful business performance, the Board of Management and the Supervisory Board will be proposing to the Annual General Meeting an increase in the dividend to EUR 1.05 per share. Assuming that it is approved by the shareholders, this will be the highest dividend since the company’s IPO in 2000. The Group will be paying out a total of EUR 1.271 billion. Expressed as a proportion of the consolidated net profit adjusted for one-off effects, the proposed dividend equates to a payout ratio of 48.2 percent. This figure ensures that the company remains within the target range of 40 to 60 percent defined by the Board of Management in 2010. The dividend is to be paid out on May 4, 2017.