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 raise hand function at the bottom of your Zoom screen. Instructions will also follow at the time of the Q&A. I would now like to turn the conference over to Martin Ziegenbold, Head of Investor Relations. Please go ahead.

Thank you, and a warm welcome from my side to our Q126 call. As it says on the title, I've got with me our Group CEO, Tobias, and Group CFO, Melanie. You know the procedure, and... Let's start right away with your part, Tobias.

Good morning. I'm pleased to inform you about a good quarter. We started with good momentum in the year of 2026, building already on the trends of Q4 of 2025. So group revenue increased 2% on an organic basis. And this is led by a DHL supply chain, especially Very good momentum in the Americas and our e-commerce division. Group EBIT is up a good 8% year on year. Here, Express made a particularly important contribution. It's the seventh consecutive quarter of EBIT growth in our Express division. and we are on a very good momentum as it relates to the strategy and what we wanted to achieve in DHL Express. And you also see good cash flow in the quarter, so good earnings quality with a free cash flow of $1.2 billion, which for Q1 is a very good figure for us also if you compare this historically. This has been a quarter that has been, again, quite volatile. It's to the external conditions that we had to deal with. We obviously had the conflict in the Middle East that impacted our operations there. Now, this is a relatively small part of overall group revenue. but there are obviously broader implications, especially as it relates to the trade lane from Asia to Europe. I think we have been able to deal with that very well. It was a quarter with excellent quality and excellent customer feedback, so I'm very proud how our colleagues in the Middle East have handled the situation, but also, more broadly, how our operating divisions have reacted to the changing environment and continue to execute on the measures that we've talked about earlier, the ability to shift, especially in our asset-intensive express network, to continue to work on cost and structural improvements, as well as the established yield mechanisms. We're also making good progress as it relates to the execution of our strategy, despite demanding day-to-day. We are continuing to execute on fit-for-growth measures, the implementation of AI being part of that, but also the legal setup of the group, which will be voted on during the AGM, at least this part measure that relates to P&P. And we have continued to invest. especially in our supply chain division. This was a very good quarter in terms of customers signing. And as a result of that, we continue to invest to build the infrastructure that is needed to support those operations. So overall, despite a difficult backdrop of external factors, I think a really good quarter and a good start into the year. On page three are some more details on how the situation in the Middle East impacted us. Obviously, in the short term, with such a tragic military conflict, our concern is about the safety of our employees, but then to continue operation for our customers, we obviously had a significant volume shortfall, activity shortfall in the initial two weeks of the conflict. Logical outcome of that military activity and the closure of airspace and sea routes. After that period, we saw volume recovering. Very good reaction, which I'll talk about in a second, in terms of how we handled the situation operationally, and that also brought some opportunities. But now, in this phase, in transitioning to the long term, I think a worry across the industry and more broadly regarding the macroeconomic impact that the situation has, especially as it relates to the price of energy for us, that being especially the price of kerosene, jet fuel, and diesel. Page four gives you a little bit of details and the sense of how we operationally reacted to this situation. on the air side that being express and global forwarding air freight. In express, our regional hub is in Bahrain, which was obviously significantly impacted by the military activities with airspace being closed for several weeks. We shifted operations using Riyadh and Muscat as primary airports of entry. for our dedicated fleet, which were able to evacuate some aircraft out of Bahrain after some days into the conflict, and those then being productively deployed into Riyadh and Muscat. So, the road network that we have in the region was extremely helpful in this situation to connect via road, Riyadh and Muscat, to those areas, the UAE, Qatar, Bahrain, but also Kuwait, where airspace was closed. So that enabled us to provide good service to our customers. And given that not all competitors were able to provide such a setup, it was also visible that our customers were very pleased. On the ocean side, similar setup with ports. in Oman and the Red Sea ports of Saudi Arabia being used for ports of entry into the regions. And then we secured additional trucking capacity very early in the conflict to distribute containerized cargo across the region. Obviously, with the Straits of Hormuz still being closed on the ocean side, there's continued disruption and still cargo that has not reached the region. And on the air side, the capacity shortfall of the Middle Eastern carriers is something that we continue to see and that continues to impact the trade flows from Asia to Europe. And then, obviously, the impact of the fuel price, both in its volatility as well as its level, is something that concerns our customers. You know that we have established mechanisms to pass higher cost onto customers. Some of those mechanisms have a certain latency, but again, it's something that we're used to. Overall, the Middle Eastern situation not having a significant impact on our Q1 earnings. Page five shows a little bit more about the volume and revenue development that we've seen for the group and DHL Express specifically. So the group on the left side, achieved 2% organic growth in the first quarter. We obviously continue to face headwinds, especially when it comes to FX. Now that's going to cycle out as we go along from Q2 onwards. We will have less of FX headwinds, at least with current exchange rates relative to last year. And also on the volume side, we have easier comparables. So if you look to the first quarter, we were about 4.5% organically above the first quarter of 2024. And would we continue with that momentum, you would see a significant change in the year-on-year comparisons with Q2. On the express side, we're very pleased that our measures as it relates to the focus on smart industrial growth are playing out as we planned. We see now significant growth in the weight per day of a time-definite international in the rest of the world, that excluding those destination U.S. lanes. And also, As it relates to destination U.S., we see a significant improvement, as we would expect with now the effects of the U.S. tariff changes annualizing. What has helped us to a great extent also to stay cost competitive and to grow in areas that are profitable for us is our modern fleet. On page six, you see the transition that we went through with significant investments that we made as a group over time. the last six years, now being a very large 777 operator and having the most modern and fuel-efficient fleet in our industry. With current jet fuel prices, this is obviously extremely helpful to act profitably and to be cost competitive for our customers. This is the perfect fleet to support our commercial strategy of smart industrial growth. and explains why we have this continued margin expansion in DHL Express. It is a contributing factor to the success that we have seen in Q1 and the ongoing positive momentum this brings. Page 7, some highlights in terms of continued focus on executing our strategy. Despite the turmoil in the Middle East, we remain focused on regions that benefit from the geopolitical situation we are in, our GT20 countries, so those countries with geo tailwinds. We continue to work intensively to improve our market position in those countries, close capability gaps, especially as it relates to the focus sectors that we have globally and where we want to make sure that we're particularly successful in those geographies. Also, by working even better together across the divisions and thereby delivering end-to-end solutions to our customers. Again, on the customer side, this was an extremely successful quarter with very good feedback and very good quality, objective quality KPIs across all divisions, and that supports, obviously, this strategy. So sector focus, last time we talked about license and healthcare. Today, a snapshot on data center logistics. This is a a value chain that is still unfolding. We see particularly high demand in North America to stage inbound to manufacturing, you could say, inbound to construction might be a better word, supplies there, so to bring the components of data centers close to the location of usage, store them locally to have them just in time available, when the construction of the data center progresses. So, that's a significant activity that we are engaged in. next to the international transportation of such goods that not only being server racks and servers themselves, but a lot of equipment around it, especially electricity related. These are significant components and significant tonnage that is typically transported by air, where the collaboration of DHL global forwarding and DHL supply chain is very helpful for our customers and highly appreciate it. As it relates to the guidance for the rest of the year, we uphold what we communicated earlier, that we want to increase EBIT, group EBIT, above the 2025 level, so above $6.2 billion. The split on DHL, P&P, and group function remains unchanged. So does the outlook on free cash flow, on CapEx, on the tax rate, the term outlook. We remain conservative in light of the volatility around us and the potential adverse effects of higher energy prices on global GDP growth, whilst we obviously recognize that we had a very good start into the year and have good momentum. With that, over to Melanie for some more details on the divisional.