Deutsche Post Ag S/Adr

Ladies and gentlemen, thank you for standing by. I'm Stuart, your chorus call operator. Welcome and thank you for joining the Deutsche Post DHL group conference call. Please note that the call will be recorded. You can find the privacy notice on dpdhl.com. Throughout today's presentation, all participants will be in a listen-only mode. Presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Press the star key followed by zero for operator assistance. I'd now like to turn the conference over to Martin Ziegenbach, head of IR. Please go ahead.

Thank you, and a warm welcome from our side to anyone up there to our Q3 conference call. As flagged, I've got with me Frank Epple, CEO, Melanie Christ, CFO, and we go with the procedure you're all familiar with, We're going to start with the presentation and leave sufficient time for Q&A. And with that, Frank, over to you.

Good morning as well from my side and welcome. Thank you for joining us. Let's go straight away to page three, the executive summary. Of course, we are very happy that we have seen in the third quarter, again, profitability for the group more than $2 billion, a lift up year over year, despite that Q3 last year was already very strong. I'm particularly happy about the free cash flow performance, which is even stronger than in our preliminary announcements, so that's very good, 45% up year over year. I think that shows that we really are focused on free cash flow generation. Going forward, we have increased our guidance to around 8.4 on the EBIT level and more than 4.2 billion on free cash flow, which shows our confidence in this year's numbers. Going forward, of course, there will be challenges without a doubt. We have seen that already in the development of B2B volumes in the third quarter. So we expect as well that there will be a cool down of the economy, but we feel that we are well equipped to manage that and start from a very strong standpoint. On the next page, you can see what happened to B2C volumes. As we have predicted, we will see a recovery of year-over-year development. You can see that here. Two out of the three divisions have seen a B2C growth in the third quarter. That is in alignment with the reduction in growth we have seen last year. As you remember, the first half of 2021 was extremely strong volume growth over 2020. And of course, that has led to the decline in the first half of this year. So we are very happy that we have now a stabilized situation overall. On the right, you can see how much more volume we now move in our networks than before COVID. I think particularly impressive is Express and e-commerce solutions. Part of Germany is more or less in alignment with what would happen anyway if you think about a 5% to 7% growth from 19 to 22, but the other two divisions have grown significantly stronger, and that shows how well we are positioned in both in the respective markets. So that's good news. The more challenging news is on page five. You'll see that we have seen a decline in volumes year-over-year in air freight and ocean freight, if you exclude Hildebrand on ocean, and that even in comparison to 2019, We have not such a strong volume. We have even the decline. But that might show as well that a recovery could come faster than we think because we are moving already less volume in 2019 and the world is not smaller than it was in 2019. So I think customers are concerned short-term and we will see how Christmas comes and then what happens in the new year. On Express, this is more resilient. The B2B shipment has dropped less than in Airfreight. In particular, in the area of weight, we have mentioned that several times that this is something which has supported our growth quite nicely. That's the reason why we have seen a strong EBIT in Express and in DJF, we have still seen a very good conversion rate. And of course, that is a consequence as well of our deployment of a new IT system, which will help us in the rest of this year and next year as well. In an express, we see the benefits of the virtual airline because we can really adjust volumes to a lower level if it happens by stopping then using third-party suppliers. So overall, we see the same what the market sees, that B2B volumes are dropping. Maybe too fast and too much if you compare that to 2019. And since we don't see a recession in consumer demand, that can't go on forever because sooner or later the warehouses will be empty again. But maybe it's a good sign. And it's a particularly good sign for us because we still have traded very well despite the volume decline we have seen. That confirms on page six. What I've just said, that we are very good in yield management. We have increased prices consistently, and we have a very good established surcharge mechanism. But we do the same in the other divisions, also in supply chain e-commerce solutions. We have done well in adjusting our pricing. In P&P, we always are more limited because the stamp price regulation is as it is. On the cost side, We are well positioned as well. That's not the first time that we see change. In particular, I remember very well the drops in 2009 in volumes were even bigger than what we observe at the moment after the financial market collapsed. Despite all of that, we have not stopped to execute our ESG agenda. Well, our electric airplane, which we want to use soon, is made in flight. We have continued to enlarge our electric fleet. We also sell our products to customers, which is encouraging to see. Last week, we signed another deal on buying even more sustainable maritime fuel. to really make a big step forward also on the ocean front. On social, the employee opinion survey was in alignment with last year. As you remember, we had record numbers last year, so we kept that high level. That's great news. And DHL Express became another great place to work, number one, which no other company has ever done before. On the highly trusted company, We have revamped our Sustainability Advisory Council and Melanie, Thomas Ogilvie and I have recently had a session with them, which was very encouraging because we got good feedback, but very encouraging words as well that they are very happy and impressed by the progress we have made. On compliance, which of course is important, I'm very proud that we have, through a very tight process, very high compliance. I talked to many other companies. Typically, you have 50% to 60% of mandatory trainings done. In our case, it's above 97%. So that's fantastic news, and I think that shows that we are really serious about that subject. On the next page, we celebrate, again, our success. The good news is that not only Express is a great place to work, number one, we see tremendous progress The CEO of Great Place to Work had a session recently with us, and he said really what he sees in our company is that we are really employee-centric and doing a lot of stuff, and that is not just PowerPoint. That is really embedded in the culture because he exchanged with our top 100 team, and that is encouraging to see if an external person says what we are doing is really a role model. Let me conclude before I hand over to Melanie. Yes, we are a great place to work, number one. That's a base for our great service quality, and that great service quality enabled us to win market share in the last couple of years and drive the performance up. We upgraded our guidance for this year. Melanie will show later on the detail. And overall, we are confident that we can keep a very high level Even if now the next quarters will become more challenging, but still if you compare that before, in comparison to the pre-COVID level, we believe that we can keep a significantly higher level than before COVID, despite all the risks we face. So with that, thank you very much for listening, and I hand over to Melanie to give you more detail on the numbers. Thank you.