DP-DHL sees “best opening quarter ever”


What is now a boom in the logistics sector continues with record results in Q1 from Deutsche Post DHL Group (DP-DHL).

Speaking to the electronic media on Thursday (May 6), Frank Appel, CEO of the group said that it had reached a “sweet spot” with a continuing growth in B2C now complemented by a recovery in B2B. He described it as the company’s “best opening quarter ever and were able to unleash our full strength as a group”.

For Q1-21, ending 31 March, DP-DHL saw revenue rise by 22% year-on-year to €18.8bn with operating profit in terms of EBIT (Earnings Before Interest and Tax) hitting €1.9bn, a jump of 222%. Once again, the biggest driver of growth was internet-retailing, however, the contrast between the e-retail exposed divisions of the group and say, Supply Chain, is marked.

The DHL Express business saw revenue climb by 32.5% to €5.5bn whilst operational profits hit €961m, up 145%. DHL explained the growth as driven by “double-digit percentage growth in all regions of the world” of its favourite, most profitable Time-Definite International products. Underlying demand was up 26.3% with margins hardening impressively, at 17.5% EBIT margin. This is despite DHL having expanded their aircraft fleet over the period.

Global Forwarding, Freight also boomed with revenue up 32.7% at €4.8bn with operating profits trebling to €216m. Essentially the story is similar to much of 2020, with airfreight seeing “a challenging environment with further elevated competition for available transport capacity” whilst sea freight saw “cargo space… in short supply”. Yet demand was very strong, with air freight volumes up 18.2% and sea freight up 8.8%. The greatest increase in demand was seen in Asia.

The German Mail operation, Post&Parcel Germany, also continued to benefit from the e-retail activity, with parcel shipments growing “dynamically” at 41.3% although mail volumes fell by a heavy 9.5%. Operating profit was up 66.5% at €556m. At eCommerce Solutions, the situation was even more ‘dynamic’, with profits increasing by over 1000%, to €117m and revenue was up by around a half. The particular focus was on international parcel traffic. 

Compared to the other businesses, DHL Supply Chain performance was comparatively muted, with revenue edging up slightly by 0.3% although EBIT recovered by 59% to €167m with profit margins back up over 5%. Contract logistics activity continues to be quite bumpy, and this is reflected in the different performance of the division with the rest of DHL, however, it might be expected that the market may recover through the year.

DP-DHL has exploited the market effectively resulting in a marked improvement in profits. What the rest of the year will look like is unknown, however, as Frank Appel hinted, things may not change until early 2022.

Source: Transport Intelligence, May 6, 2021

Author: Thomas Cullen