DHL revenue falls 13.4% in 2023

DHL Group today reported 81.8 billion euros ($89.1 billion) in 2023 revenue, down 13.4% from 2022, which saw record revenue for the company. [caption id="attachment_57139094" align="alignright" width="300"] (Courtesy/DHL)[/caption] THE BIG PICTURE: DHL attributed its results to weak demand, noting that air and ocean freight rates continue to normalize from peaks during the pandemic. DHL’s Global Forwarding, Freight, division saw the largest drop in revenue, down 36.1% year over year. Other freight forwarders fared similarly or worse, with: DSV revenue down 36% to $22 billion; Expeditors revenue down 46% YoY to $9.3 billion; and Kuehne+Nagel net turnover down 40% YoY to $26.9 billion. “Business developed quite robustly compared to our competitors,” DHL Group Chief Executive Tobias Meyer said on today’s earnings call. However, “we’re not happy about all the details.” BY THE NUMBERS: DHL Group’s EBIT was $6.9 billion, down 24.8% YoY. Revenue per division in 2023 was: $27.1 billion for Express, down 10% YoY; $21 billion for Global Forwarding, Freight, down 36.1% YoY; $18.5 billion for Supply Chain, up 3.2% YoY; $6.9 billion for eCommerce, up 2.8% YoY; and $18.4 billion for Post & Parcel Germany, up 0.7% YoY. WHAT THEY’RE SAYING: DHL Group met its 2023 earnings forecast “even in the absence of a significant recovery in the global economy,” the company’s earnings report stated. “It was clear that this was going to be a year of normalization,” Chief Financial Officer Melanie Kreis said on the earnings call. “Everybody was aware that in ocean freight ... and airfreight, the rates would normalize.” Express volumes declined for the second year in a row and Global Forwarding, Freight, was challenged by lower volumes and the rate normalization. On the other hand, Supply Chain grew and eCommerce and the German parcel business benefited from increased e-commerce. “We are significantly more profitable than before the pandemic,” Kreis said. “We have a very broad-based portfolio. We have areas, such as airfreight, or ocean freight, which are very sensitive to economic cycles. But we also have our Supply Chain business, our contract logistics business ... where we can achieve revenue growth and EBIT growth even in this adverse market environment.” STATE OF PLAY: Economic uncertainty and consumer restraint worldwide lowered business-to-business volumes compared with previous years in the Express division, according to the company. Daily time-definite international shipment volumes fell 2.5% YoY. Meyer said that 2023 airfreight volumes were 11% below 2019 levels. “That is in line with the decline we saw in the market,” he said. “In Europe overall, the economic environment continues to be weak.” FLASHBACK: Meyer was named Air Cargo Next ’s Executive of the Year for 2023 in recognition of the company’s growth in technology and services. DHL Group ranked second on Air Cargo Next ’s Power 25 list of top freight forwarders. The company had an airfreight throughput of 1.9 million tonnes in 2022. NOTEWORTHY: DHL has been working to digitalize processes across its brands. Supply Chain expanded the use of robots in 2023 and 15% of its picking operations are supported by automation, the earnings report stated. DHL has more than 7,000 robotics systems in its warehouses across the globe, including automated sorting machines, autonomous vehicles, sorting bots and drones, the company previously told Air Cargo Next. “Robotics and smart wearables are no longer just pilot projects,” Meyer said. “They are already used on a large scale. That has a major bearing on our business.” FUTURE LOOK: The company will propose a dividend of $2.02 per share, the same amount as the previous year, to shareholders at its annual general meeting on May 3. If approved, DHL Group would pay $2.4 billion. The share buyback program, scheduled to run from 2022 to 2024 has been extended until 2025 with the volume increased by $1.1 billion to $4.4 billion. MARKET REACTION: Shares of DHL Group ( OTCMKTS: DHLGY ) were down 5.41% from market open to $42.69 as of market close today. The company has a market capitalization of $53 billion. Editor’s note: All amounts have been converted to U.S. dollars. Register here for Air Cargo Next ’s free webinar, “The Role of Drones in the Future of Air Cargo,” on Tuesday, March 26, at 11 a.m. ET.

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