Deutsche Post DHL Group looks forward to 2016

After a tumultuous year that included a €336 million write down for a failed IT system rollout, the Deutsche Post DHL Group is moving full-steam ahead with greater confidence in 2016. Consolidated EBIT for the full year 2015 was €2.41 billion, almost exactly the group’s target of €2.40 billion for the year, but less than 2014’s €2.97 billion. The Post-eCommerce-Parcel (PeP) division amounted to €1.1 billion, as forecast, and the DHL divisions generated an operating profit of €1.66 billion.

One of the of the most notable surprises in the DHL report was what appears to be a turnaround in the company’s troubled Global Forwarding, Freight, business segment. Since DP-DHL made the painful decision to abandon its “New Forwarding Environment” initiative in Q3 2015, the turnaround plan, led by CEO Frank Appel, looks like it is taking shape in Q4, with the segment reported its first increase in operating profit – a 39.4 percent rise to €99 million – since 2013.

The PeP division invested heavily in expanding its parcel network in 2015 to capitalize on the global boom in e-commerce, and the Supply Chain division also made progress by investing in restructuring in 2015.

Fourth quarter 2015 revenues decreased by 0.2 percent to €15.3 billion, but the PeP business reported an increase in revenue for the quarter of 12 percent, year-over-year. EBIT for the entire group in Q4 2015 rose 5.7 percent, y-o-y, to €957 million – the best quarterly result on an operating basis in the history of the group. The gain reflects a 14.6 percent growth to €487 million in the PeP division, which is attributable in part to the success of the parcel and e-commerce business during the holiday season.

The PeP division processed more than 1.1 billion parcels in Germany for the entire year 2015, 8.7 percent more than 2014, another reflection of the growing e-commerce business. The express division continued to perform well in terms of volumes, revenue and earnings in 2015 with revenue climbing 9.4 percent to €13.7 billion for the year compared to €12.5 billion in 2014. EBIT in the express division grew by 10.4 percent to €1.4 billion over €1.3 billion in 2014.