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Deutsche Post DHL Commerzbank German Investment Seminar Lawrence Rosen, CFO New York, January 13-15, 2014

Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

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Page 1: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHLCommerzbank German Investment Seminar

Lawrence Rosen, CFONew York, January 13-15, 2014

Page 2: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Agenda

2

Strategy 2015: Towards sustainable growth 1

Structural trends lend support2

3

Appendix4

Divisional highlights and roadmaps

Page 3: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 3

1) Underlying EBIT

MAIL

DHL

Corporate Centre/Other

• EBIT stable at a minimum of EUR 1bn

• Improvement to EUR -350m by 2015

1.72.0

2010 2011 2015

2.7 – 2.9

2014

CAGR 13 - 15%

1.451)

20132012

Group EBIT of EUR 3.35 bn to 3.55 bn in 2015

– DHL EBIT, in EUR bn –

2.0-2.15

Strategy 2015: Mid term EBIT targets

Page 4: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Strategy 2015: All divisions have a clear roadmap

4

• Generate profitable growth based on industry expertise in outsourcing and emerging markets

• Sustainably stabilize EBITby improving efficiency and investing in growth in the parcel business and in new markets

• Transform business model(Transformation/NFE) and drivesustainable growth in difficult marketenvironment

• Increase market share by expandingnetwork and services while improving margins

Divisional priorities

Growththrough

Excellence

MAILStrategy 2015

Page 5: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Mid-term EBIT Targets: EUR 3.35–3.55bn Group EBIT in 2015Confirmed and on track

5

DHL: EBIT CAGR of 13–15% CAGR of 15.3%1) in 2010–2012

MAIL: EBIT stabilization at min. EUR 1bn Fully delivered in 2010–2012

EXPRESS

FORWARDING, FREIGHT

SUPPLY CHAIN

• Ongoing capacity and service quality investments weight on 2012 margins as expected

• Margin acceleration expected in 2013

• Focus on Contract Lifecycle Management and more integrated solutions delivered steady margin improvement

• Excl. NFE implementation costs, EBIT margin expansion would have been even greater

• NFE implementation intensifying, increase in NFE-related operational expenses expected in 2013

8.7%7.8%

3.3%2.9%2.8%

20122011

2.1%

20103)

2.7% 2.9%

DHL margin improvements on track

7.8%2)7.0%

1) 2012 EBIT excl. EUR 113m one-off items from VAT, restructuring provision release and disposal gain in Q2 2012; CAGR of 18.6% based on reported 2012 EBIT2) EXPRESS FY2012 margin excl. EUR 113m one-off items from VAT, restructuring provision release and disposal gain in Q2 2012 3) FY2010 margins excl. non-recurring items (restructuring)

Page 6: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Q3 2013 Highlights

6

2013 guidance confirmed: Group EBIT of EUR 2.75 – 3.0bn

Key growth drivers remain intact despite still soft macroeconomic environment

• TDI and Parcel achieve further solid volume growth

• Delivering on MAIL EBIT stabilization

• DHL Express showing expected margin acceleration

• Sustained focus on cost and cash management and execution of key strategic projects

Page 7: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Full-year 2013 Guidance

7

2013 Guidance confirmed

Group

MAIL

DHL divisions

Corp. Center/ Other

EBIT

Free Cash Flow

EUR 2.75 – 3.0bn

EUR 1.15 – 1.25bn

EUR 2.00 – 2.15bn

~ EUR -400m

Free Cash Flow To at least cover 2012 dividend

• Gross Capex of around EUR 1.7bn

• Net income growth to exceed operating profit growth

Page 8: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Operating Cash Flow Trend

8

1) Q2 2012: excl. EUR -21m effect from VAT settlement;2) Q3 2012: excl. EUR -300m effect from VAT settlement;3) Q4 2012: excl. EUR -1,986m Pension funding;

On track to achieve full year cash flow target

1,3573)

1,262

Q4Q3

8128682)826

Q2

501

2361)317

Q1

120

-357

-34

20122013

2011

in EUR m

Operating Cash Flow

Page 9: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Free Cash Flow Outlook

Major drivers

EBITIn line with 2015 guidance: Group EBIT up to EUR 3.35–3.55bn

Changes in provisions Utilization of restructuring provisions tailing off,pension payments declining slowly

Changes in W/C Increasing as business grows but strong focus on working capital management

Income taxes paid To increase driven by EBIT growth

Net Capex Normalization from current expected gross levels of around EUR 1.7bn in 2013

Net M&A No need or ambition for major M&A

Free Cash Flow EBIT increase to drive strong FCF performance

9

Multiple levers to drive FCF improvement over the next years

Expected Trend from 2013 onwards

Page 10: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Finance Policy

10

• Dividend payout ratio to remain between 40–60% of net profit (continuity and Cash Flow position considered)

• Excess liquidity will be used for– Share buybacks and/or extraordinary dividends– Stepwise pension funding

Target / maintain rating BBB+

1) €0,60/ €0,65/ €0,70 per share for the years 2009, 2010, 2011

External cash usage

Page 11: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Agenda

11

Strategy 2015: Towards sustainable growth1

Structural trends lend support2

Divisional highlights and roadmaps3

Appendix4

Page 12: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 12

Global TDI leadership with key strengths in growth markets

Express Forwarding Supply Chain

Revenue1): EUR bn

LATAM, MEAAsia Pacific

12.4

2009 2012

9.6

24%13%

32%

15%+13%

+20%

CAGR +9%

Global No. 1 in air freight, No. 2 in ocean freight

Revenue1): EUR bn

11.4

2009 2012

7.8

26%12%

26%

15%+23%

+14%

CAGR +14%

Market leader in contract logistics in Asia and Latin America

Revenue1): EUR bn

14.2

2009 2012

12.0

7%6%

11%

+14%

+21%

CAGR +6%

Structural trend “Emerging Markets”:DHL building on global footprint and leadership

Emerging Markets drive growth across DHL Divisions

8%

1) Based on external 3rd party revenue, region according to customer invoice

Page 13: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Structural trend “E-Commerce”:Key growth driver for Parcel business in Germany intact

• Average reported volume growth of 9.3% in Q1 2010 – Q3 2013 • Quarterly yoy growth rates ranging from 6% to 14%

1313

+8.7% +8.7%

184

Q2

237218

194181

Q1

249234206

188

+6.4%

Q4

284265

239

Q3

238219205

2013201220112010

Parcel volumes, in million pieces, 2010 – 2013 by quarter

New innovative services of PARCEL support e-commerce growth

Page 14: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Structural trend “E-Commerce”: Strong growth driver in Germany and beyond

14

Sustained e-commerce boom in Germany

Parcel volume CAGR over 9% for past 3 years0.5m more parcels/day delivered in ‘12 than ‘11

Cross-border services

DHL Express TDI service used for time-critical B2C shipments

New DHL Easy Return service for EU-based online retailers (launch in Sept. 2012 by DHL Global Mail)

Global E-Fulfillment solutions

End-to-end services from Webshop todelivery (offered by DHL Supply Chain)• Solutions in place for more than 60 topglobal brands

Continued investment to drive future growth:• Double-digit million investment in largest

parcel center in Obertshausen• Expansion of the Packstation network -

9% capacity increase by YE 2013• Expanding FMCG1) same-day delivery

pilots into new regions• 20,000 new Paketshops announced,

increasing flexible drop-off options

DHL Global Mail fulfills less time-sensitive international delivery

1) Fast Moving Consumer Goods

Page 15: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Agenda

15

Strategy 2015: Towards sustainable growth

Structural trends support our growth2

Divisional highlights and roadmaps3

Appendix4

1

Page 16: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Highlights MAIL Q3 2013

16

m units

m units

• Continuation of Parcel growth (+7.0% per working day) driven by e-commerce

• Mail Communication volumes supported by one additional working day (volume per wd: +2.6%) as well as shift effects from discontinuation of product Infobrief (Dialogue Marketing). Underlying decline in line with mid-term expectations

Parcel volumes

Mail Communication volumes

Milestones

Confirmation of trends: ongoing strong Parcel growth while Mail volumes are supported by transitory effects

237234

Q2 12Q1 12

218 249219284

+8.7%

238

Q3 13Q3 12 Q4 12 Q1 13 Q2 13

1,8182,024

Q2 12Q1 12

1,780 2,0531,790 1,984

+4.2%

1,865

Q3 13Q3 12 Q4 12 Q1 13 Q2 13

Page 17: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

• Limited Mail volume decline as expected – potential future decline is also limited vs. other markets as German addressed mail items per capita are already low1)

MAIL: Parcel growth counters letter mail decline

17

1) UPU postal statistics database, regulatory authorities, Ofcom analysis

2) As reported: aggregation of business segments Mail Communication, Dialogue Marketing and Press Services

650

347340270213

529

264261218200

USUKNLFRGER

2009

2011

25%Parcel

61%Letter1)

12%

GlobalMail

20%

Parcel

67%Letter1)

12%GlobalMail

Other / Consolidation2%

Other / Consolidation1%

Mail Division Revenue Mix9M 2010 9M 2013

Page 18: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

MAIL: Proposed Letter Pricing RegulationNew Price Cap May Be Revised to CPI-0.2%

18

Revised price cap regime offering more potential to partially offset factor cost inflation

• Proposed price cap of Federal Network Agency1)

– Formula: x-factor reduced from 0.6 to 0.2%– Regulation valid until Dec 31, 2018– Allowing potential average price increase of 1.6%

on Jan 1, 20142)

Directly impacted Mail revenues of EUR 3.3bn3)

1) Federal Network Agency = Bundesnetzagentur; CPI = German Consumer Price Index 2) 1.6% = 1.8% inflation rate minus 0.2% x-factor; based on arithmetic average of the monthly CPI values for reference period from July 2012 - June 2013: 1.6% price increase applicable based on weighted average across the relevant Mail product portfolio as per price-cap regulation; 3) 2012 revenues affected subject to price-cap regime

Page 19: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Highlights EXPRESS Q3 2013

19

Time Definite International (TDI) –Shipments per day ‘000s

Time Definite International (TDI) –Revenues per day1) in EUR m

1) Currency translation impacts are eliminated. Hence, 2012 and 2013 data are aggregated with the same currency rate

Strong performance of global TDI network continues

• Continued strong TDI volume growth, with all regions above market: Europe +6.3%; Americas +5.4%; APAC +9.9%; MEA +10.4%

• Customer and product mix continues to result in lower Revenue per Day increase than Shipments per Day

• Volume increase as well as progress in ground and air costs per shipment drive margin improvement

Milestones

Q2 13

649+8.0%

Q3 13

621

Q1 13

618

Q4 12

643

Q3 12

575

Q2 12

602

Q1 12

564

Q2 12Q1 12 Q3 12

36.5 34.2

+6.7%

Q3 13

31.9

Q2 13

35.1

Q1 13

32.8

Q4 12

35.037.1

Page 20: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 20

Keep executing our successful strategy

On track towards 2015 targets driven by organic growth, operating leverage as well as direct and indirect cost management

MotivatedPeople

Great Service Quality

QCC

LoyalCustomers

ProfitableNetwork

10% margin by 2015

CIS program is a key success factor enabling

our employees to deliver the best

performance for our customers

Focus on the best service for our TDI customers driving industry-leading volume growth

Insanely customer centric, supported by strengthening brand

awareness

Strict discipline on pricing tools / principles

Virtual airline balances service quality,

planning flexibility and operating costs

Focus on costs and cash generation

Page 21: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 21

sed Financial Management

Gross Profit Triangle

1. Profitable GrowthRevenue per Day (RpD)Shipment per Day (SpD)

Revenue per Shipment (RpS)Weight per Shipment (WpS)

Revenue per Kilo (RpK)

Topline / Revenue Management

Direct Cost Management

3. Efficiency in Ground OperationsReduce Operations Cost per Move (OCPM) by 2.5% yoy in 2013

5. Cash Management

Direct Cost Management

2. Leverage Aviation NetworkReduce Cost per Kilo (CpK) by 1.5% yoy in 2013

4. Reduce Indirect Cost Share of Revenue

Page 22: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

HighlightsDHL Express Delivering on Margin Acceleration

22

1) Q1 2013 excl. EUR +12m positive effect from disposal gain; 2) Q2 2012 excl. EUR +113m net positive effect from VAT settlement, disposal gain and release of restructuring provision

7.7%7.8%

Q4

8.4%7.9%

Q3

8.5%

7.3%7.4%

Q2

9.1%

7.8%2)8.3%

Q1

8.0%1)

20122013

2011

Q3 margin up 120 bp yoy to 8.5%

DHL Express, EBIT Margin, by quarter, Q1 2011 – Q3 2013

Page 23: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Highlights GLOBAL FORWARDING, FREIGHT Q3 2013

23

• Volume trends reflect weak demand frommultinational customers of Engineering & Manufacturing and Technology sectors, continuing shift from AFR to OFR, lower weights per shipment and selective strategy

• No major peak season effect to date in OFR• GP margins down in AFR reflecting selling

rate pressures. Higher share of controlled volumes drives slightly higher OFR margin

• NFE implementation on track – project costs slightly up yoy in Q3

Ocean freight ‘000s TEU1)

Air freight ‘000s Tons

Milestones

1) Twenty Foot Equivalent Unit; Q1 2013 TEUs adjusted

Persisting weak volume development

709672

Q2 12Q1 12

716 658751 701

-2.4%

733

Q3 13Q3 12 Q4 12 Q1 13 Q2 13

986992

Q2 12Q1 12

1,046 9331,039 1,070-5.3%

984

Q3 13Q3 12 Q4 12 Q1 13 Q2 13

Page 24: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

FORWARDING: Executing our planned transformationUpdate on New Forwarding Environment (NFE)

24

• Modular state-of-the-art IT platform

• Standardized processes on a global scale

• Centralized back office support (Global Service Centers)

Changing the future of FORWARDING

We have a clear vision …More customer intimacy

Improved end-to-end transparency

Increased productivity

… and implementation is on track Functionality: pilot country indicatesnew process landscape will deliver expected improvements

Timing: in line with plans

Costs: lower than expected in 2013, mainly based on savings from project mgmt

Page 25: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Highlights SUPPLY CHAIN Q3 2013

25

• APMEA1) continues to show the strongest regional revenue growth; Europe soft

• New business wins of EUR 350m demonstrate robust business model. Fastest growth seen in Automotive and Life Sciences & Healthcare. Technology also exhibits good growth

• Attractive revenue and gross profit profile of new signings

New business gains continue strong development

Revenue by sector Q3 2013

10%

9%

18%

24%

Technology12%

Life Sciences &Healthcare

Consumer

20%

Retail

Others

4%Williams Lea

Energy3%

Automotive

Milestones

1) Asia-Pacific, Middle-East and Africa

Page 26: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page 26

Identify, standardize and growglobal products and solutions• Co-Packing• Lead Logistics Provider• Technical Service• Airline Business Solutions• Life Sciences & HC platform

Continuous improvement across the entire contract lifecycle• Project selection• Design• Execution• Price / risk discipline

Sector Focus

Differentiate through sector-specific solutions• Global expert communities• Be the competent partner

for outsourcing in target sectors

• Leverage DHL customer contacts and brand

SUPPLY CHAIN: Strategic programs in place delivering margin improvement and further growth

Standardization & Replication

Contract Lifecycle Management

Page 27: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Supply Chain: Leveraging our international leadershipGlobal reach supports profitable growth track

27

Driving record level of new business wins YTD in 2013Order intake, in EUR m

• Global reach combined with replicable supply chain solutions

• Targeting new international clients with clear benefits of outsourcing and increasing penetration of existing customers

Undisputed global leader with presence in over 60 countries worldwide

9M

290

810

1,130

Q3

350

Q2

350

Q1

330430

190

20122013

Page 28: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Wrap Up: Focus on executionConfirmation of 2013 guidance and mid-term targets

28

• Focus on cost and cash management in volatile environment

• Continue TDI growth and Express margin improvement

• Actively drive MAIL Division shift towards growing Parcel markets

• Keep working on and implementing our key strategic projects

• Confirmation of 2013 and mid-term guidance

Key priorities remain unchanged

Page 29: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

Deutsche Post DHL | PageInvestor Relations – January 2014 Post DHL | Page

Agenda

29

Strategy 2015: Towards sustainable growth

Structural trends lend support2

Divisional highlights and roadmaps 3

Appendix4

1

Page 30: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

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Deutsche Post DHL at a Glance

30

1) Average FTEs FY 2012

The postal service for Germany

Domestic German Mail and Parcel

Sales: EUR 13,972m EBIT: EUR 1,051mEmpl.1): 146,923

The logistics company for the world

International and Domestic Express

Sales: EUR 12,778m EBIT: EUR 1,108mEmpl.1): 84,623

Global Air, Ocean and Road Freight

Sales: EUR 15,666m EBIT: EUR 512mEmpl.1): 43,590

Global Supply Chain Solutions

Sales: EUR 14,340mEBIT: EUR 416mEmpl.1): 140,193

Corporate Center / Other: Sales: EUR 1,203m; EBIT: EUR -422m

2012 key figures Group: Sales: EUR 55,512m; EBIT: EUR 2,665m; Employees1): 428,287

Page 31: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

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Group P&L Q3 2013

31

• Revenue decrease due to adverse FX effects and lower forwarding volumes. Organic growth in group revenue was 3.4%

• Group EBIT increase despite significant FX headwind and continued subdued economic environment

• MAIL EBIT performance supported by solid business development esp. in Mail Communication and Parcel Germany

• DHL EBIT growth mainly reflects continued strong volume and margin performance in Express

• Higher taxes yoy due to stronger EBIT and exceptionally low tax rate in Q3 2012

• Despite slightly higher taxes, good EBIT development drives 5.8% EPS growth

Q3 Group EBIT increased by 7%

1) Attributable to Deutsche Post AG shareholders

2) Undiluted, growth rate based on non-rounded numbers

EUR m Q3

2012Q3

2013 Change

Revenue 13,839 13,498 -2.5%

EBIT 604 646 +7.0%

t/o MAIL 246 261 +6.1%

t/o DHL 463 489 +5.6%

Financial result -107 -98 +8.4%

Taxes -86 -121 -40.7%Consolidated net profit1) 377 399 +5.8%

EPS2) (in EUR) 0.31 0.33 +5.8%

Page 32: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

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Free Cash Flow Q3 2013

32

Strong cash flow generation again in Q3

EUR m

Reported Q3

2012

VAT payment effects in Q3 2012

Q3 excl. VAT

2012

ReportedQ3

2013Cash from operating activities before changes in Working Capital

632 632 675

Changes in Working Capital -64 +300 236 137

Net cash from operating activities after changes in Working Capital

568 +300 868 812

Net Capex -385 -385 -347

Net M&A -20 -20 -13

Net Interest -168 +155 -13 -22

Free Cash Flow -5 +455 450 430

• Reported Cash Flow comparison impacted by VAT payment in Q3 12

• Strong Operating Cash Flow of EUR 812m although down yoy due to lower seasonal working capital decline, mainly in Forwarding

• Capex spend below last year's level due to timing effects

• FFO/Debt at 31.4% (year-end 2012: 30.5%)

Page 33: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

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Free Cash Flow drives net debt improvement of EUR 354m in Q3in EUR m

Net debt(Dec 31 2012)

OCF beforechange in

W/C

Changesin W/C

-1,952

Net Capex

-670

-811

-192

Net dividend

-934

Net debt(Sep 30,

2013)

-2,456

Other effects1)

2,103

Net Debt (-)/Liquidity (+)

Net debt (June 30,

2013)

-2,810

Page 34: Deutsche Post DHL Commerzbank German Investment Seminar ... · Commerzbank German Investment Seminar Lawrence Rosen, CFO ... Q3 2013 Highlights 6 ... Investor Relations – January

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Bond maturity structure

1) With two additional extension options of one year each 2) Convertible bond – assuming no conversion before 2019

Target Financing Structure in Place

2024

700

2023

500

2022

500

20212020

300

2019

1,000

2018

500

2017

750

201620152014

9262)

4.875%1.875% 1.50%

0.60% 1.875%2.95% 2.75%

2.875%

Issue VolumeEarly refinancing of 2014 maturity Coupon

• EUR 1bn issued via two conventional bonds in the amount of EUR 500m each in Sep:– 5-year term, coupon of 1.5% p.a. – 10-year term, coupon of 2.75% p.a. – Refinancing EUR 0.9bn bond due Jan 2014 (10–year term, coupon 4.875%)

• Five-year EUR 2bn syndicated loan facility agreed in 2010 renewed ahead of schedule until 20181) – with significantly reduced annual commitment fee and lower margin

Taken advantage of attractive market conditions

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Balance sheet impact of IAS 19R implementation

35

5,018

9,758

Net Pension Provision

Unrecognized gains/losses

Plan assets

June 30, 2013as reported under IAS 19R

4,751

9,582

Dec 31, 2012as reported under IAS 19

1,908

3,082

9,758

in EURm

Total Defined Benefit

Obligation EUR 14,748m

IAS 19R implementation as of Jan 1, 2013

• Restated 2012 balance sheet: – Net pension provision increased

by EUR 3.1bn

– Equity reduced by EUR 3.0bn

(Difference mainly due to tax effects)

• Q3 2013 development:– Re-measurement of pension

provision and increase of total defined benefit obligation due to marginally lower discount rates (GBP)1)

– Plan assets development reflects investment return, forex effects as well as pension payments

• No cash impact from accounting change to IAS19R

Highlights

unrecog-nized gains/losses included within net pension provisions

Dec 31, 2012as restated under IAS 19R

Total Defined Benefit

Obligation EUR 14,776m

Total Defined Benefit

Obligation EUR 14,333m

Total Defined Benefit

Obligation EUR 14,587m

4,814

9,773

Sept 30, 2013as reported under IAS 19R

1) EUR: 3.75%, CHF: 2.00%, GBP: 4.50%, USD: 5.00%

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Cash conversion

36

DHL

Mail

1998–2007 2014–20152011–20132008–2010

Level of M&A

Level of Capex

Restr. cash requirement

DPDHL transitioning to high Cash Flow generation

EBIT Performance

Special factors

StableStable

Strong improvement

High, but decreasing

Improving

Average

Very high

Low

State aid (–)

Low

Very low

Very high

State aid (+)Postbank sale (+)

High

Very low

Low

State aid (–)VAT (–)

Average

Very low

Very low

State aid (+) ?

High, but decreasing

HighLow

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• Revenue gain driven by stamp price increase, one additional working day as well as small benefit from elections

• Wage increase of 3.1% as of Aug. 1 restrains EBIT development. Small operational increase boosted by absence of Neckermann charge (EUR 10m) in Q3 2012.

• Operating cash flow up yoy, also after adjusting for EUR -269m impact from VAT settlement in Q3 2012

• Capex down yoy due to timing effects, parcel network upgrade and corresponding IT investments continue to be the main investments areas

EBIT increases as additional working day, stamp price increase and business development offset cost increase in Q3

MAIL – Divisional Results Q3 2013

37

Q1 Q2 Q3 Q4-3 +1 +1 0

yoy working days in Germany

EUR m Q3

2012Q3

2013 Change

Revenue 3,276 3,439 +5.0%

EBIT 246 261 +6.1%

Operating Cash Flow -56 227 n.a.

Capex 98 63 -35.7%

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Parcel Germany: Strategic Focus

38

• DPDHL only postal organization world-wide to offer nation-wide 24/7 access to all shipping needs– 13,500 retail outlets

– 1,000 Parcel Boxes for 24/7 drop-off

– 2,500 automatic PACKSTATIONs to drop-off, frank, or use as delivery address

– Online Franking of all parcel products

– iPhone and Android apps for all services

– Pilot project Paketkasten – personal parcel lockers

• To date 2mn registered PACKSTATIONcustomers

• 83% check whether vendor ships to PACKSTATION before purchase

• 36% increase their online spend after registration for PACKSTATION

• Target group in age segment 25–50 years with high online affinity

Parcel Germany is shaping eCommerce as the leading service provider

Source: Europäisches Handelsinstitut

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With DHL Parcel we are shaping a dynamically growing market environment

39

50

32

+5% p.a.

2011

2020

= 32 bn €

20

8

+11% p.a.

• Convenience as a key driver for e-commerce:– 3 out of 4 online shoppers believe

e-commerce has improved their quality of life– Over 40% claim they save time

German parcel market:growth of 5-7% p.a. until 2015

• B2C growth 11-13% p.a. by e-commerce adoption independent of GDP development

• B2B growth 3-5% p.a.depending on GDP and export development

... and is driving parcel volumes

E-commerce salesEUR billions1)

Share of retail spendingPercent2)

1) Bundesverband des Versandhandels; 2) TNS Infratest und MRSC, “Einkaufen 4.0”, Gesellschaft für Konsumforschung

= 80 bn €

E-commerce is growing strongly ...

! We are profiting from a fast growing market

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Aim to increase market share and secure growth rates above market average

40

Target2015

5.0

10

1.5

2006

0.4

• Network upgrade “Paket 2012”

• DHL-Fulfillment

• DHL-checkout

Simplified services …

47 40

53

Other

Parcel

20152010

No. of registered customers … … will boost our B2C market share

… will help to grow our B2B market share

revenue increaseabove market growth

81 75OtherParcel

2015

20-25

2010

19

Millions Percent

Percent

DHL

20152010

55-60

! Parcel Germany is a solid growth story

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Distribution

DHL Parcel offers the entire eCommerce value chain for small and large vendors

Source: DHL Parcel

FulfillmentPaymentListing

• Online market place MeinPaket.de with 2,800 vendors and 10m buyable offers

• Among top 50 online shops in Germany by merchandise value

• More than 1.8mregistered customers after 3 years

DHL Parcel offers all steps in the eCommerce value chain

• PostPay as secure checkout procedure for vendors comp-arable to PayPal

• Broad acceptance of difference payment methods (credit card, invoice etc.)

• Over 200m EUR in turnover handled since launch in 2010

• B2C fulfillment in5 locations in Germany (Bremen, Staufenberg, Greven, Langenfeld, and Braunschweig)

• Warehousing and commissioning for large customers (HSE) and internet startups (fab.com, fashionID)

• Additional to standard parcel delivery up to 31.5 kg own 2-Man-Handling network capable of transpor-ting goods up to 100 kg and 4 cubic meters

• Mostly furniture and large household appliances

41

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Working days Germany

2012 2013 2014 2015

Q1 64.2 61.6 62.2 62.2

Q2 59.3 60.3 59.3 59.3

H1 123.5 121.9 121.5 121.5

Q3 64.8 65.8 65.8 66

9M 188.3 187.7 187.3 187.5

Q4 60.2 60.2 60.9 63

H2 125 126 126.7 129

FY 248.5 247.9 248.2 250.5

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Delivering further margin improvement

EXPRESS – Divisional Results Q3 2013

• Revenue growth was impeded above all by major negative currency effects. Up +5.1% organically driven by strong TDI growth

• EBIT up 13.9% yoy leading to an improved EBIT margin from 7.3% to 8.5%. This is driven by increased network utilization with core TDI volume reflected in improved OCPM and CpK1)

• Operating cash flow increased yoy due to increased profitability. Also some smaller base effects from Q3 2012

• Capex decline mainly due to phasing, regular network renewals and gradual upgrades ongoing

EUR m Q3

2012Q3

2013 Change

Revenue 3,172 3,112 -1.9%

EBIT 231 263 +13.9%Operating Cash Flow 332 422 +27.1%

Capex 141 109 -22.7%

1) OCPM = Operating Costs Per Move (ground costs); CpK = Costs per Kilogram (aviation costs)

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EXPRESS: 2015 EBIT target and key levers

44

1. Leverage strength in fastest growing regions

2. Focus on TDI3)

3. Further improve customer satisfaction4. Continue investments in network

and service5. Leverage cross BU opportunities

6. Manage cost through operating leverage

7. Increase brand awareness

2015Renewal

2014Convergence

2013Margin

acceleration

2012Market share

growth

2011Invest for growth

2010 Business

stabilization

+13% – 15% CAGR

1) Underlying EBIT and before the transfer of Czech domestic business to DHL Freight; 2) Reported EBIT; 3) Time Definite International

EUR 785 m1)

EUR 916 m

EUR 288 m

EUR 497 m2)

EUR 1,108 m

+13 – 15% CAGR

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Others29%

UPS3%

FedEx9% TNT

10%

DHL49%

Global [21,983 m€]

DHL32%

FedEx27%

UPS21%

TNT7%

Others13%

Europe [6,813 m€]

DHL41%

UPS23%

TNT14%

FedEx10%

Others12%

Americas [7,352 m€]Others3%

TNT1%

DHL16%

UPS30%

FedEx50%

Market share expansion continues across all regions

Asia Pacific [7,487 m€]

DHL40%

FedEx21%

UPS10%

TNT6%

Others23%

MEA [330 m€]

Source: MI study 2012, annual reports and desk researchAM: AR, BR, CA, CL, CO, CR, MX, PA, VE, US; EU: AT, BE, CH, CZ, DE, DK, ES, FR, IL, IT, NL, NO, PL, RU, SE, TR, UK; MEA: AE, ZA ; AP: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN

45

Market Position in TDI – Value Share (€)

4 ppt increase vs previous year

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DHL Express volumes around the world benefit from leadership in Asian TDI markets

46

1

1 11

11

11

1

1

1

1

TDI leader (revenue) in all polled APAC markets1)Strongest exposure to Asian growth

>50% of global DHL TDI shipments

touch Asia

Inbound Asia

Outbound Asia

Intra-AsiaOthers

Break-down of DHL Express global shipments by origin/destination:

No market share data available

Market share data available

1 DHL Express TDI market position

1) Source: MI study 2012, annual reports and desk research; APAC: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN

1

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Increasing TDI Revenue Share

58% 61% 63% 66% 69%

11%

9%

31% 28% 26% 24% 22%

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 H1 2013

Time Definite International (TDI) Revenue Share

Other Product Revenue Share (DDI, DDD, ACS etc.)

ProductsTDI – Time Definite InternationalTDD – Time Definite Domestic

Time Definite Domestic (TDD) Revenue Share

DDI – Day Definite International (only offered in 5 countries in EU)DDD – Day Definite DomesticACS – Air Capacity Sales

∑ 78%∑ 69% TDI+TDD

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HighlightsKey Driver Express TDI Growth Intact

48

2009 2010 2011 2012 2013

450

650

350

550

600

400

500

Q2 Q3 Q4 Q1Q1 Q2Q2Q1 Q3 Q4 Q3Q2Q1 Q2 Q3Q4 Q1Q4Q3

SpD

in ‘0

00

DHL Express, TDI Shipments per Day (SpD)

Momentum continues with TDI volumes per day up +8.4% YTD

Investment in Network Expansion and Optimization

Margin Improvement

Economic Downturn & Business Stabilization

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Active Customer Base and Classification

Customers(Revenue Share)

Revenue Growth Margin Sales Approach

104(~12%)

• Global weekly Tender Review Board • Sophisticated pricing and margin

tools • Win the ones we should & correct

“Walk Away’s” • Avoid RFQ’s / competitive bidding –

benchmarking preferred • Only concede on price if more

volumes offered• Euro 500m under review each

quarter

~440(~8%)

>410.000(~65%)

• Culture of “sell sell sell” • Global sales campaigns twice per

year• Sales process and call rate• Leaderboard visibility on country

growth rates

>2.200.00(~15%)

• Much more competitive rates for smaller customers

• No GPI on full tariff • Discounts for Ecom users & retail

outlets • PR oriented towards small customer

value added

GlobalCustomer

Multinational Customers

Direct Sales(Telesales, DM, Web, Physical Channels)

Field Sales (incl. Major &

Key Accounts)

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Our Dedicated Fleet

138RegionalAircraft

90FeederAircraft

30IntercontAircraft

Youngest intercont fleet

in the Industry!

7 new aircraft in 2012

25 average aircraft age

3.5% reduction in CO2

output during 2012

+20 aged aircraft replaced;

727, DC8, A300

The only Helicopterexpress delivery service in the

World!

Global access to small

markets (Africa)

Growth enablers!

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Balanced, “virtual airline” business model increases flexibility

Cost Position

Asset Intensity

Flexibility

Capacity Commitment

1) Commercial Air Linehaul

1)

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Air Capacity Sales (ACS) – 4 Different Product Offerings

1 Block Space Agreement, guaranteed air cargo product.

2 Express TDI core product, capacity based on average utilization, adjusted on a daily basis

Total Spare Capacity (TSC), average capacity not utilised by Block Space or TDI Core on a planned basis. To be sold by air cargo product

3+4

CORE Flex & Air Capacity Sales Flex, a set amount of the Total Spare Capacity to be utilised for TDI core volume surge and/or air cargo filler traffic

4

Air cargo guaranteed, a set amount of the Total Spare Capacity guaranteed for priority traffic & key customers3

3 4

3+4

21

• More than ACS 500,000 bookings per year

• For DGF we improved from no. 8 in 2010 to the no. 3 supplier in 2012

• DGF is the biggest customer from DHL Aviation

• More than ACS 500,000 bookings per year

• For DGF we improved from no. 8 in 2010 to the no. 3 supplier in 2012

• DGF is the biggest customer from DHL Aviation

Selling air cargo space purely helps to offset aviation costs and is not a TDI product sold by the core sales team; DHL Global Forwarding (DGF) is the main customer

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FORWARDING, FREIGHT – Divisional Results Q3 2013

53

• Revenue decline impacted by weak global volumes and adverse FX effects. Organic revenue decline of -2.5%

• EBIT up despite ongoing NFE costs and weak markets, driven by strict cost management and selective strategy

• Operating Cash Flow down due to temporarily higher DSO levels and very strong Q3 2012 level

Offsetting difficult market conditions with strict cost management

EUR m Q3

2012Q3

2013 Change

Revenue 4,018 3,712 -7.6%

EBIT 122 127 +4.1%Operating Cash Flow 246 106 -56.9%

Capex 31 30 -3.2%

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GLOBAL FORWARDING, FREIGHT: 2015 EBIT target and key levers

54

201520112010

Volume & Gross Profit Improvement

Volume growth due to exposures to emerging markets

GP2) margin improvement due to enhanced IT (enhanced buying due to better transparency)

Cost Improvements

Productivity gains due to economies of scale

Indirect costs savings due to optimization of regional and country organizational structures

Efficiency gains due to new IT (NFE)

Road Freight

+13 – 15% CAGR

+13% – 15% CAGR

1) EBIT before the transfer of the Czech domestic business from DHL Express to DHL Freight

2) Gross Profit

EUR 383 m1)

EUR 440 m

2012

EUR 512 m

2013 2014

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Maximized profitability: GP on product level reflects our size advantage and product portfolio

55

• Performance benchmarking on product level is impacted by differences in accounting – key DGF competitors allocate value added services to AFR or OFR

• DGF has chosen to account for VAS separately under category called ‘Others’. This allows to measure true performance on product level

• When relevant VAS (customs, handling, cartage) are allocated to AFR & OFR to improve comparability, DGF’s GP margin is in line with peers

• GP margin in AFR benefits from DGF’s large scale, while OFR reflects its share of uncontrolled volumes

Gross Profit margin 2012(in %, Air Freight)

Gross Profit margin 2012(in %, Ocean Freight)

1) Including value-added services; Note: GP margin absolute level not fully comparable due to different revenue recognition principles across competitorsSource: Official company publications

20,2%22,6%24,6%

20,7%25,7%

DG

F

DG

Fco

mpa

rabl

e1)

17,6%20,7%

19,2%18.9%21%

DG

F

DG

Fco

mpa

rabl

e1)

What about fuel costs?Fuel costs have not a significant impact on DGF as they are passed through costs

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SUPPLY CHAIN – Divisional Results Q3 2013

56

• Revenue decline driven by adverse FX effects, in particular GBP and USD. Organic growth continued to improve at +6.6%

• EBIT decline due to soft business conditions in Europe

• Operating cash flow stable supported by good working capital management

• Capex reflects continued investment in new contracts and selective growth infrastructure

EUR m Q3

2012Q3

2013 Change

Revenue 3,670 3,532 -3.8%

EBIT 110 100 -9.1%Operating Cash Flow 217 214 -1.4%

Capex 70 79 +12.9%

Contracts won – Annualized revenue

New gains 290 350

Financial performance impacted by FX translation effects

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SUPPLY CHAIN: 2015 EBIT Target and Key Levers

57

2011

EUR 362m

2010 2015

EUR 272m1)

57

+13%–15% CAGR

1) EBIT excluding restructuring

Contract Lifecycle Management

Standardization & Replication

Sector Focus

EUR 416m

2012 2013 2014

+13 – 15% CAGR

Drive continuous improvement in project selection, design, execution and overall performance

Identify, leverage, and grow best practice globally

Differentiate with sector-specific solutions Leverage expertise to drive growth,

especially in first time outsourcing and Emerging Markets

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Structural trend “Simplifying industry solutions”DHL leads the growing Outsourced Contract Logistics market

58

Huge outsourcing market1) potential …

154

197

2015

1,121

924

2011

981

827

In house LogisticsOutsourced Contract Logistics

6.5%

2.8%

CAGR

1) DHL Supply Chain projection based on forecasts from IHS Global Insight and Transport Intelligence

EUR bn

Top 3 market shares, 2011

OtherLargest providers

88% ~12%

K+NCEVA

DSC

Largest providers

~12%

2.1%2.4%

7.7%

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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 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.

59

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Investor Relations Contacts

60

Sarah Bowman• +1 212 381 3463 • E-mail: [email protected]

Sarah Bowman• +1 212 381 3463 • E-mail: [email protected]

Sebastian Slania• +49 228 182 63203• E-mail: [email protected]

Sebastian Slania• +49 228 182 63203• E-mail: [email protected]

Daniel Stengel• +49 228 182 63202• E-mail: [email protected]

Daniel Stengel• +49 228 182 63202• E-mail: [email protected]

Martin Ziegenbalg, Head of Investor Relations• +49 228 182 63000• E-mail: [email protected]

Martin Ziegenbalg, Head of Investor Relations• +49 228 182 63000• E-mail: [email protected]

Robert Schneider• +49 228 182 63201• E-mail: [email protected]

Robert Schneider• +49 228 182 63201• E-mail: [email protected]