Thanks to the boom in e-commerce, the logistics and postal group significantly increased both its sales and earnings compared to previous year, as the preliminary results presented today
(13JAN21) show. Thus, Deutsche Post joins the economic beneficiaries of the pandemic, alongside e-traders such as Amazon, Alibaba, and others.

The published figures show that the Group EBIT amounts to EUR 4.840 billion, thus significantly outperforming its earnings guidance of EUR 4.1 to 4.4 billion for the fiscal year 2020. At the same
time, Group sales increased by 5% to a total of EUR 66.8 billion.

The Group cites the booming development in the express and national and international parcel business as the main reason for the record figures. It was the racehorse in DPDHL’s stable in 2020, as
the figures illustrate: Full year revenue of EUR 19.1 billion, up 12% year-on-year (Q4: EUR 5.6 billion, up 20% year-on-year). Full year EBIT of EUR 2.750 billion, up 35% year-on-year (Q4: EUR
1.040 billion, up 70% year-on-year). Core TDI volumes in Q4 increased in all regions and grew overall by 17%, bringing the full year growth rate to 9%. The B2C volumes continued to be the main
driver, but Q4 also saw some further recovery in B2B volumes. e-Commerce Solutions performed similarly positively, shown by the full year revenue of EUR 4.8 billion, up 19% year-on-year (Q4: EUR
1.5 billion, up 33% year-on-year). The full year EBIT of EUR 160 million contrasted sharply with last year’s loss (Q4: EUR 80 million, vs last year’s loss).

Parcel pandemic
The positive trend had been emerging since the outbreak of the Covid-19 pandemic, prompting an ever-increasing number of people to purchase online instead of on the high-street, and this
accelerated even further during the Christmas shopping season. Lockdowns were imposed in various countries in December, for example, and continue to this day, or have even been tightened in the
meantime by strict curfews. This additionally fueled online buying behavior and thus led to a year-end rally in sales for parcel delivery companies such as Deutsche Post as well as their
international competitors.

Freighter freedom
The logistics giant benefits from having a large freighter fleet (DHL, AeroLogic, European Air Transport, and Polar Air Cargo make up 49%, along with many individual national companies), so that
orders could be fulfilled contractually using its own aircraft. This was an advantage over those competitors who had to buy transport capacity on the market to ensure their supply chains kept
running. Given the lack of belly capacity due to reduced global passenger aviation, this constituted a major and costly disadvantage for those market players as freight rates shot through the
roof.

“2020 was an exceptional year: despite all the challenges faced, we achieved a record result. Our strategy and business model have proven resilient – even in turbulent times for the global
economy. Thanks to the incredible performance of our 550,000 employees all over the world, we made a positive contribution to people and societies during the Covid-19 crisis. We are now focused
on distributing the Covid-19 vaccine all over the world”, Frank Appel, CEO Deutsche Post DHL Group, said.

The future looks bright
Free cash flow was around EUR 2.5 billion in 2020, well above the latest guidance, which last stood at more than EUR 2.0 billion. The Group significantly exceeded its previous-year result by
around EUR 1.6 billion, as well as the market estimate. With gross capex in owned assets of around EUR 3.0 billion in 2020, the Group invested around EUR 100 million more than forecasted.

“In financial terms, the past financial year was a complete success. We were able to accomplish all planned investments in future growth and, at the same time, increased our profitability. We
can be proud of the outstanding development of free cash flow in an economically uncertain environment. With the record result behind us, and the beginning economic recovery in sight, we can
confidently provide a more positive outlook”, said CFO Melanie Kreis.

Full reporting for fiscal 2020 will be published on 09MAR21.

Heiner Siegmund

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