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 the 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 wish to ask a question, we ask that you please use the raised hand function at the bottom of your Zoom screen. If you have dialed in, please select star nine to raise your hand and star six to unmute. Instructions will also follow at the time of the Q&A. I would now like to turn the conference over to Martin Ziegenberg, Head of Investor Relations. Please go ahead.

Thank you and a warm welcome from my side. Good morning to you wherever you're following this. This is the Q125 results presentation that I take it you have in front of you. As flagged, I'm going to have with me our Group CEO Tobias Meyer, Group CFO Melanie Kreis. We have the usual procedure. We will go through the deck. After that, there's time for Q&A. We are aware that there are other events going on in the sector today, so that should help us to go through what we have in a very focused manner. And with that, over to you, Tobias.

Thank you, Martin. Good morning, everyone. Welcome to our Q1 call. On page two, you find the highlights. We believe we had a good start into the year 2025 in what remains an interesting environment. We had about 5% growth In earnings, we had slight growth in revenue as well, and we delivered, from our perspective, a pretty good free cash flow based on what you heard earlier from us, that we also look carefully at cost and capex in this environment. Particularly, we had EBIT improvements in Express supply chain, supply chain in a very steady and consistent way that you have seen over many quarters now. And also, again, with P&P Germany, which is a bit more due to the specifics of the quarter, given the elections we had in Germany and the stem price increase ahead of wage increases in April. The macro environment overall has been in line with our expectations, was quite subdued, obviously induced volatility due to changing U.S. trade policies, which makes the day-to-day quite interesting on a financial view for the quarter. It was actually quite a small impact. The operational occupation is much higher than that impact that you see in earnings. And we also expect that, and we'll talk about that going forward. We execute on our growth strategy. We announced further acquisitions, especially in the life science and healthcare space. We continue to follow what we said. We want to buy capability, not scale, and then leverage, scale that capability across our network. It's not only the case in life science and healthcare, but also in the broad range of sub-industries on the new energy and obviously our continued drive in e-commerce as well. But we also executed against our cost and CapEx leaders as planned, overall happy with capacity management, especially in Express, that was another quarter well done on the operational side. So that was also supporting our results. The environment remains changing. You will follow that as well. On page three, you have a summary of some notable items in terms of the development of US trade policy. It's important, and we obviously recognize it as well, that even with some of those tariffs being either exempted or being put on hold for a certain time period, there is a notable increase in the effective US tariff rate. There's obviously a lot of uncertainty, a lot of changes. We've seen further changes yesterday night announced as it relates to auto. That not only has impact on our customers' financial calculation, but it also has operational impact. We've seen this in February with the discontinuation of the de minimis for four days, which created quite some operational challenges. We also saw that with some of the executive orders based on IEPA on Section 50 of the U.S. Code that that triggered what we believe was an unintended consequence to move quite a substantial number of clearances from informal to formal. So these are the practical implications that we see. For us, it's important that we continue to focus on quality. deal with those industry-wide impacts in a transparent way so that we keep a good relationship with our customers. What we see on page four, and that's obviously on a bit higher conceptual basis, there are a lot of individual, sometimes quite complex considerations that our customers have, but we summarize this here in six different type of behaviors that we observe. Quite strong is wait and see, especially on the industrial side. We see that customers just don't know whether things really come into effect and basically keep their current setup for the time being while recognizing that if those tariffs would come into effect or stay in place, that would bring them into an economically disadvantages situation, but there is still the belief with many of our customers also in the US that this environment is going to evolve and move back to lower tariff levels as those negotiations, much talked about, unfold. So that's why wait and see is actually something that we see rather skeptical. It delays certain investment decisions. and we also see some weighing on consumer confidence. Adjustment of pricing, obviously, in space like e-commerce, an absolute necessity, but we've seen it also in automotive and electronics. Paused delivery is something that we do expect now in April, May to affect heavily e-commerce, especially the front loading of deliveries, and that's coming to those effects that are rather positive for a logistics player like us. who has a strong global footprint and a disproportionately high market share in non-direct U.S. trade lanes that the front-loading of deliveries, especially in electronics, took place. Some later and different than we expected based on historical experience. Again, this shows that some players, some of our customers don't act before a deadline because they're not sure whether the policy stays in effect. but we've seen some front-loading and shifting of inventories and also thereby higher demand for air freight, for warehousing, especially in Asia. The structural shift of production or the supplier footprint is starting. We do see that particularly Chinese manufacturers who have overseas capacities as well, so production capacity in countries that are not impacted as much by U.S. tariffs, that such production is considered and reconfigured for export to the U.S., and the markets which these plants originally serve are then served by China export, by the production capacity available in the home country of these Chinese companies. So this is starting, and that is obviously for us quite a positive element because this leads to more transport and more complex supply chains than the more efficient setup before. The shift in delivery mode, and that also means the mode of entry into the country is something that is especially relevant for e-commerce. And we see that on the next page, on page five, that these are the additional services that we try to offer or collaborate on with our customers. Particularly the break-bulk solution is something that is much discussed as a solution for some e-commerce imports. Now, whether that really works in the way it's foreseen and what's the specifics that are required to make this an efficient and compliant import in the United States is to be seen. As we speak, there are pilots and ongoing discussions on some operational formalities and details with customs, as often the case with the implementation of such solution. We obviously had breakback all along, but here it is also the question who's importer of record and what additional data is required for these products. We obviously have multiple dimensions of U.S. trade policies and related barriers that need to be considered. But we do indeed see that our broad portfolio of services, but also the geographic footprint is an advantage in this context. On page six, because we got the question, what is our exposure to the Trans-Pacific, particularly China, Hong Kong to the US? You see this quantified here. Those figures have historically been partially higher. You know, and we have talked about in earlier calls that we've reduced our exposure especially as it relates to e-commerce on the Trans-Pacific already over the last year, especially in the TDI segment as well. This is also why the shipment number in the B2C space has been notably down for DHL Express now for some quarters and also in the first quarter of this year. So, yes, we have some remaining exposure, as you would expect, to the Trans-Pacific on the eastbound direction. but it is relatively small also if you compare it with some of our peers. What is important for us to highlight on page seven is that we continue to execute our strategic initiative as we have communicated last September and did a deep dive that many of you attended in about four weeks ago, five weeks ago now. We continue to execute our strategy in life science and healthcare. We did one of those specialist acquisitions that we're looking for, capabilities that help us accelerate our progress in offering great solutions for our customers and then allow us to scale those capabilities in a rapid fashion globally. We are, as DHL, the global provider, and that's what we also want to achieve here. The main trade lanes is something that many can cover. We play our strengths as a global player also on those fringe lanes, and this is something that has helped us to maintain good profitability as well. We remain excited about some of those geographies that have intrinsically good characteristics, demographics, for instance, and therefore posed for domestic growth in consumption, but also can and are benefiting from those geopolitical trends. We call this the GT20, the geographic tailwind countries of which we identified 20. Those have a specific focus for us to deliver great solutions in great service to those customers who diversify their manufacturing footprint, especially and seek to set up shop in those countries for distribution and manufacturing, and that's working out very well for us. And we also, as the third point, continue to invest largely organically into the e-commerce space and continue to do so. It is a sector that has provided us with good structural growth and will continue to do so for the decade to come. On page eight, Examples only on fit for growth. This is obviously a very granular program with many, many initiatives, the deployment of technology in several areas to enhance efficiency, but also some specific focus on bread and butter topics. Aviation net supply cost, for instance, declined by 7%. So you see here with those examples, this is obviously supporting earnings as well. in this environment, which again, from a macro perspective, is largely in line with what we expected. And with that, I hand it over to Melanie for some more specifics on the divisional performance.