Deutsche Post DHL Group saw growth in Q3 2020 in an economy dominated by COVID-19, as the Group grew its revenue by 4.4% to €6.2bn. Organic revenue – after adjusting for portfolio and currency effects – was up by 9.0%. The Group’s Post & Parcel Germany and DHL eCommerce Solutions divisions reported especially pronounced growth in shipment volumes. Volumes also surged in the time-definite international Express business across all regions, which allowed the Group to utilise its network. Deutsche Post DHL Group increased EBIT by approximately 50% compared with the prior year to €1.4bn. The EBIT margin rose from 6.1% to 8.5%. The free cash flow increased by more than €750m to around €1.3bn compared with the prior year.
Post & Parcel Germany
Revenue in the Post & Parcel Germany division rose by 3.4% Y-o-Y to more than €3.8bn. Operating profit improved to €320m (2019: €304m). In addition to the strong parcel growth, earnings were positively impacted by the cost and pricing adjustments made in both the letter mail and parcel business.
In Q3, the pandemic significantly accelerated the long-term trend of rising parcel volumes and decreasing mail volumes. Dialogue Marketing business remained restrained, whereas the e-commerce boom in the German parcel business enabled volume growth of 11.6%. This was considerably above the growth forecast of 0% to 5% given at the beginning of the year.
The Express division increased Q3 revenue by 14.6% Y-o-Y to approximately €4.9bn. Operating profit rose by 65.9% over the prior-year level to reach a record €753m.
This performance was driven by growth of 15.8% in the time-definite international Express shipments. Volumes were significantly higher in all regions of the world during the entire third quarter. The network was adapted in response to the increased share of B2C business across all industries and the simultaneous return of volumes in B2B business. In doing so the Express division succeeded in further increasing shipment processing efficiency as well as in achieving a utilisation of its flight capacity in its network, leading to a record margin of 15.5%. This represents a significant increase over the prior-year figure (2019: 10.7%).
Global Forwarding, Freight
Despite ongoing capacity shortage in the international transport markets, the Global Forwarding, Freight division increased Q3 revenue to around €3.8bn (2019: €3.7bn). Operating profit rose by 25.0% to €155m. The positive Y-o-Y margin development in the airfreight business had a notable effect on earnings and compensated declining volumes.
In addition to the continued lack of cargo capacity on international passenger flights, the division was confronted with a further shortage of ocean freight capacity.
Customer activity in contract logistics picked up over the course of the third quarter as the division increasingly recovered from the weak, pandemic-related momentum of the previous quarter. At around €3.1bn, however, revenue was still below the previous year’s level (2019: €3.4bn). Operating profit for the Supply Chain division came to €111 m in Q3. Adjusted for the bonuses, earnings were nearly at the previous year’s level of €162m. The division achieved this performance in a volatile market environment thanks to its high cost discipline and its flexibility in finding new solutions for customers.
Revenue in the e-commerce Solutions division increased by 26.1% in Q3 to more than €1.2bn. The division’s operating profit also rose considerably to €76m (2019: €6m) as a result of strong volume growth in the private consumer business in Europe and the Americas.
The realignment of the Group’s international parcel activities is paying off: In addition to the good revenue trend, improvements in cost management also led to efficiency increases. The Q3 operating margin came to 6.3%, which is well above the prior-year level (2019: 0.6%). The increase would have been even more pronounced without the one-time special bonus expenses of €10m.
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