The Deutsche Post DHL Group, the world’s leading logistics service provider, continues its upward growth trajectory in the first quarter of 2022 despite global challenges. According to their statement, revenues increased by 19.5 percent to €22.6 billion.
Following significant earnings growth in the financial year 2021, the Group achieved an operating profit (EBIT) of €2.2 billion in the first quarter of 2022 (Q1 2021: €1.9 billion). The Group managed to balance higher energy prices and transportation costs. The EBIT margin of 9.6 percent was comparable to the previous year (Q1 2021: 10.1 percent).
Global B2B business was a key driver of growth in the first quarter of 2022. In particular, the business units Global Forwarding, Freight and Supply Chain, as well as Express, benefited from solid global trade development and strengthening B2B business. The earnings of the Global Forwarding, Freight business unit nearly tripled thanks to exceptionally positive results recorded in air and sea freight.
The volume of B2B shipments in domestic and international parcel business normalized as expected at the beginning of 2022 after exceptionally high levels in the previous year due to public life restrictions in many regions arising from the coronavirus pandemic. Consequently, the business units eCommerce Solutions and Post & Parcel Germany reported lower results than in 2021.
– The first quarter brought the expected normalization of e-commerce. However, we managed to more than compensate for this development with strong results in our global logistics activities. Once again, our portfolio – balanced across regions and sectors – proved to be a strong and resilient foundation for our success. Overall, we started the year well and further increased earnings – said Frank Appel, CEO of Deutsche Post DHL Group.
Regarding the consequences of the war in Ukraine, Frank Appel stated that after the outbreak of the war, ‘global trade has proven resilient, but we continue to closely monitor the growing challenges facing global economic development’.
The Group still expects EBIT of €8 billion (+/- 5 percent) in the current financial year. The Group forecasts an increase in EBIT to around €8.5 billion in 2024. Short-term and medium-term prospects for the development of free cash flow and gross capital expenditures (capex) have also been confirmed.
Excluding acquisitions, the Group expects free cash flow of €3.6 billion (+/- 5 percent) in the current year and cumulative free cash flow of around €11 billion from 2022 to 2024. The outlook for capital investments in 2022 remains at around €4.2 billion, and from 2022 to 2024 at around €12 billion.
The excellent financial situation of the Group is also reflected in its cash flow: in the first quarter of 2022, the Group’s operating cash flow was almost at the previous year’s level of €2.4 billion (Q1 2021: €2.5 billion).
Free cash flow amounted to approximately €1.1 billion (Q1 2021: €1.2 billion) without acquisitions, as the transaction for the acquisition of J. F. Hillebrand Group, a specialist in ocean freight, was completed for €1.4 billion. This nearly restored the record result from the previous year. The company invested €564 million across all business units in the first quarter of 2022 (Q1 2021: €583 million).
– The stable financial strength of the Group enables significant investment in a leading position and strengthening the Group’s resilience, which allowed us to acquire Hillebrand in the first quarter of 2022 without raising external capital and to continue investing in the development of our core business. With capital expenditures of around €12 billion by 2024, we aim to promote sustainable investments to expand our capacities for transport, storage, and sorting, and to support our customers with new low-emission solutions to achieve their carbon reduction goals – said Chief Financial Officer Melanie Kreis.
Ultimately, Deutsche Post DHL Group achieved a net profit after non-controlling interests of €1.4 billion in the first quarter of 2022 (Q1 2021: €1.2 billion). Basic earnings per share rose accordingly to €1.10 compared to €0.96 in the same quarter last year.
Thanks to the continued strong utilization of its crisis-resistant global networks, the Express business unit achieved an excellent EBIT of €971 million (Q1 2021: €961 million). This includes an impairment of assets of -€24 million in Russia.
Revenues increased by 15.9 percent to €6.4 billion, mainly due to heavier shipments and higher fuel surcharges. As expected, the volume of time-definite international shipments (TDI) recorded a moderate decline compared to the previous year. The EBIT margin remains strong at 15.2 percent (Q1 2021: 17.5 percent).
