Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Deutsche Post AG (DHLGY, Financial) reported a strong EBIT for the year at EUR5,886 million, with a particularly robust performance in Q4.
- The company maintained a high level of cash conversion, generating approximately EUR3 billion in free cash flow.
- Deutsche Post AG (DHLGY) increased its share buyback program by EUR2 billion and extended it by a year, demonstrating a commitment to shareholder returns.
- The supply chain division exceeded EUR1 billion in EBIT for the first time, indicating strong structural growth.
- The company has a strategic focus on high-growth geographies, which are less impacted by trade barriers, providing a positive outlook for future growth.
Negative Points
- The macroeconomic environment remains volatile, impacting the company's ability to provide specific guidance on achieving its EUR7 billion EBIT target.
- The company faces challenges in the Post and Parcel Germany division due to declining mail volumes and cost inflation, necessitating workforce reductions.
- Deutsche Post AG (DHLGY) anticipates a seasonal drag in Q1 2025 due to the late occurrence of Easter, affecting volume growth.
- The company is exposed to potential disruptions from changes in trade policies, such as the de minimis rule in the US, which could impact shipment volumes.
- The freight forwarding division continues to underperform compared to peers, with a need to improve its conversion rate to meet industry standards.
Q & A Highlights
Q: Can you clarify the 2025 guidance and its components, particularly regarding P&P EBIT and recent policy changes in Germany?
A: The 2025 guidance is based on the momentum from 2024 and does not account for recent short-term changes in Germany. The impact of these changes is uncertain, and we don't expect a significant effect this year. The reorganization of the legal structure is progressing well, aligning with management structure and strategic goals. (Tobias Meyer, CEO)
Q: Regarding the Fit for Growth program, is it primarily for cost mitigation, or will it contribute to EBIT growth? Also, can you elaborate on the cargo mix and sector growth?
A: Fit for Growth includes cost-saving measures that will support both current and midterm guidance, ensuring solid delivery despite a subdued macro environment. The cargo mix involves strategic choices, with a focus on sectors like life sciences and healthcare, which are seeing growth. (Melanie Kreis, CFO)
Q: How do the de minimis changes impact your operations, and what is your position in the US e-commerce market?
A: The de minimis changes caused temporary disruption, but our exposure is limited. In the US, we maintain a strong partnership with USPS for last-mile delivery, and our relationship remains stable despite changes in the competitive landscape. (Tobias Meyer, CEO)
Q: Can you provide insights into the EBIT growth assumptions for 2025 and beyond, including volume growth and pricing strategies?
A: For 2025, we expect a continuation of the current environment, with moderate growth in the medium term. Our pricing strategy aims to offset inflation, and the Fit for Growth program will support EBIT growth, with a full run rate impact expected by the end of 2026. (Melanie Kreis, CFO)
Q: What are the implications of the legal structure simplification, and how does it relate to strategic options?
A: The simplification has both operational and strategic benefits, aligning legal and management structures. It enhances operational efficiency and positions us to explore strategic options in the future. (Tobias Meyer, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
