Deutsche Post Ag S/Adr

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the DHL Group conference call. Please note that this conference call will be recorded. You can find the privacy notice on dhl.com. Throughout today's presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you have a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. I would now like to turn the conference call over to Martin Ziegenwell, Head of Investor Relations. Please go ahead.

Thank you, and a warm welcome and good morning from my side to all you who have dialed in to our call. As flagged, I have got with me our Group CEO, Tobias Meyer, and the Group CFO, Melanie Kreis, who, as always, will take you through the deck that you have in front of you. And after that, I hope we have sufficient time for Q&A. So without further ado, over to you, Tobias, please.

good morning thanks for joining us i'm glad to have you and speak about the full year 2024 and how we finished it on page two you find some highlights starting with the ebit for this year which stands at five eight eight six million euros uh we had the expected relatively strong q4 We delivered what we think was a great peak season across all divisions, not only from a financial point of view, but also from a quality point of view and had also very targeted yield and cost measures, especially in express. The cargo mix was really working out very well for us and that led to a strong finish. Also in terms of cash conversion, we stayed at the high level you're now used from us with roughly 3 billion in terms of free cash flow. We stay committed to a stable dividend at 185 euros per share, and we have upped the buyback program by 2 billion and extended it by a year. As was already talked about in strategy 2030 with a setup for success component, we have now put our measures into a group-wide program, which we call Fit for Growth. We believe that's needed to keep the focus on those efficiency measures as to be able to provide the cashflow needed to achieve our growth aspirations. I'll come to the guidance later with a detailed chart. Next page, you see the longer-term development with our new flying altitude post-COVID, with obviously the normalization that we've seen since the peak in 2022, but also that the fourth quarter is in line with the historical share that we have in terms of earnings. The fourth quarter, obviously in P&P, but also in Express being particularly strong in those areas where we have fixed cost network, we also then have a higher profitability. So, we are quite pleased with the fourth quarter, and overall, we had a good momentum throughout the year. You will remember we started relatively softly in 2024, still with declining revenue in the first half, and then started to grow top line in the third quarter. and now have achieved also good earnings growth in the fourth quarter. As it relates to 2025, we are off to an okay start. It's very volatile, so it's not that easy to see. And we also have Easter later this year, so that will provide a bit of a seasonal drag on this quarter. But overall, despite the volatile condition, We are quite confident and especially confident to continue to grow our business in those areas geographically and from an industry perspective where there is growth. Page four sheds a light on the e-commerce space quarter on quarter. So to demonstrate that there was a good peak season across Express, Parcel Germany and e-commerce, but also in the longer term. I find it particularly noteworthy on the bottom right, the 61% that we have grown volumes in e-commerce over the last five years. So whilst the division is still not a full adult, it is getting there, and we intend to keep a good growth momentum, especially in e-commerce, but also in the other areas where we have exposure to the B2C trend. Page five is about Supply Chain, our new member of the Billionaires Club, exceeding for the first time the billion in EBIT and being really on a good structural trajectory. So we're very pleased with the actions that have been taken over the last years. We have good signings and thereby a good pipeline also for the year to come. So we see ourselves on a good trajectory, both from a top line growth perspective, but also as it relates to the necessary measures to ensure we are profitable. Any of you will have questions regarding our exposure to global trade and what it means. I want to spend some time on that starting with page six and highlighting that obviously, Trade barriers, as we have seen with the Brexit, have an adverse impact on volume. That's what would you expect. Though often trade is more resilient than some people think, finds other ways to still happen. And what is very important, it often means also more activity for us. for the Brexit that meant more customs filings, which is also true now for the days that the de minimis in the US was not in effect. You had 5 million more shipments that needed customs clearance, which led to issues, bottlenecks that then seemingly led to the US administration changing their mind on it and reinstating the de minimis. So it is clearly volatile and operationally quite demanding, but that environment also provides opportunities for us. The next point is on page seven, which is our geographical footprint, which is very much tilted to high growth geographies. and those geographies that are currently not impacted as much from trade barriers, especially the new trade policy of the US administration. We have a higher market share in those fast-growing geographies, and that's where we will continue to focus with our geographic tailwind program, where we highlight several countries that have both strong GDP growth, but also strong growth in trade, and we aim to solidify and grow our position, especially in those markets. And that gives us great confidence that we can also continue to grow in express. Page eight particularly addresses the question of express and its relation to the general air freight market. You see historically that Express, the integrated business model, has taken share from the carrier-forwarder model, and we would, as others, expect that to continue. The Express model is... suited to handle certain cargo much better than the carrier forwarder model and it is very perceivable that in sectors like life science and healthcare you will have more smaller higher value shipments and thereby a natural shift into the sweet spot of the integrator model That's what we see as an opportunity and that we'll continue to work on, especially with our cross-divisional initiative on life science and healthcare, which will get us more cargo control and will enable us to leverage our fantastic express network to a greater extent also in that sector. Page nine puts our actions into the context of strategy 2030, which we presented in September. On the right-hand side, several areas addressing growth, and we'll talk about that, especially when we see each other in our capital markets day early April. But then also, the set-ups of success part of the strategy, which we had highlighted there, which has several profitability levers, which we now bundle in the program Fit for Growth. H10 talks about this program and what it aims to do and what areas it addresses. So we aim to have a run rate impact from more than a billion euros by end of 2026. It is really spread over multiple areas in aviation and air freight. We'll continue to phase in 777 this year, but we're also simplifying structures, for instance, with the exit of the Polar JV. We have several other initiatives in place to structurally take out cost and drive efficiencies. In Germany, this unfortunately also leads to the reduction in headcount to a greater extent, given that we have structural improvements measures that meet a soft market, a soft market especially due to the structural decline in male volumes, and that requires us to do more drastic steps to reduce the workforce and adjust our capacity to demand in that area. In many other areas, we expect that growth compensates for the efficiency gains that we will be able to achieve and thereby will have a more heterogeneous set of actions as it relates to labor. This brings us to the outlook on page 11, where we have a guidance of more than 6 billion in EBIT for 2025. DHL should deliver more than 5.5. PNP around 1 billion in group functions. We lowered to minus 0.4. Cash flow at 3 billion, very similar than what we achieved in 2024. Also, the gross capex very much in line with what you have seen from us in the past that also applies for the tax rate. In the medium term, we expect to exceed the 7 billion. We are quite confident in our structural growth levers, but we also have to be realistic that the macro environment has a profound impact on our business and our earning situation. This is why we are not specific on 12-month period where we achieved those 7 billion but we are confident to see and deliver structural growth in terms of top line but also in terms of the bottom line that brings me to our commitment to shareholder returns on page 12 we keep and propose to the general assembly early may a constant dividend at 185 that's slightly outside our payout corridor at 64 of net earnings after tax but that and we have said that multiple times dividend continuity is a very important priority for us And given that we have a balance sheet and we've left, at least for some rating agencies, our target corridor in terms of rating to the upside, we have decided to up our share buyback program by 2 billion and extend it by a year. Given our current valuation, we see that as very creative to share the returns also in the long term. and thereby we use our cash generating capability, but also our balance sheet to provide attractive shareholder returns. With that, I would turn it over to Melanie to give you some more specifics regarding the developments in the divisions.