DHL Group Maintains Stable Position in Weak Market Environment and Raises Lower End of EBIT Guidance

DHL Group has once again demonstrated its resilience in a less dynamic market environment in the second quarter of 2023. The group achieved revenue of €20.1 billion (Q2 2022: €24.0 billion). Operating profit (EBIT) was at the level of the first quarter, amounting to €1.7 billion. As expected, the second quarter, which was still marked by lower volumes and falling freight rates, did not reach the record earnings of the previous year (Q2 2022: €2.3 billion). Despite the continuously weaker market dynamics, DHL Group achieved an attractive EBIT margin of 8.4 percent (Q2 2022: 9.7 percent). The group raises the lower end of its EBIT guidance for 2023 and confirms its profit expectations for 2025.

DHL Group is once again benefiting from its broad logistics portfolio. While the DHL Express and DHL Global Forwarding, Freight business units are more dependent on the global economy, long-term contracts with clients in the DHL Supply Chain business unit ensured continuously stable earnings and further growth in the second quarter.

– Thanks to our balanced portfolio and global presence, we were able to demonstrate our resilience, especially in times of weak global economic momentum. We took the right measures early on to address the challenges of the current macro environment. This, along with the dedicated efforts of our employees, reflected in a high level of earnings that significantly exceeded earnings from the years preceding the pandemic – said Tobias Meyer, CEO of DHL Group.

Revised Forecast Scenarios: Group Expects Further Growth in the Medium Term

With a half-year profit of €3.3 billion, the group performed well in a challenging environment. Therefore, DHL Group raises the lower end of its EBIT guidance for 2023 to €6.2 billion (previously €6.0 billion). The group continues its forecasts based on three scenarios presented at the press conference on the annual results for 2022 in March:

• In a favorable scenario of a global economic recovery in the early second half of the year (V-shaped development), the group expects EBIT of around €7.0 billion (unchanged).
• In the case of a recovery at the end of the year (U-shaped development), the group expects EBIT of around €6.6 billion (previously €6.5 billion).
• In an unfavorable scenario of no significant recovery of the global economy in the remainder of the year (L-shaped development), the group expects EBIT of at least €6.2 billion (previously €6.0 billion).

For DHL’s business units, DHL Group expects EBIT between €5.7 and €6.5 billion (previously €5.5 to €6.5 billion). For the Post & Parcel Germany business unit, the company forecasts EBIT between €800 million and €1.0 billion (previously €1.0 billion).

For 2025, the group confirms its medium-term profit forecasts exceeding €8 billion.

Sustained Investments in Profitable Growth and Sustainability

The financial strength of the group remains high: in the second quarter of 2023, operating cash flow amounted to €1.8 billion (Q2 2022: €2.0 billion). Free cash flow was €450 million (Q2 2022: €665 million).

– While we closely monitor our costs in the current challenging environment, earnings growth allows us to continue to invest significantly in future business growth. Precisely because supply chains are becoming increasingly complex, our customers trust us as experts in sustainable transport and logistics solutions – said CFO Melanie Kreis.

Gross capital expenditures (capex) amounted to €708 million in the second quarter (Q2 2022: €798 million). The focus was on investing in sustainable business activities such as building new, climate-neutral centers, transport solutions, and service centers in the Express business unit, as well as expanding low-emission transport structures. To sustainably improve productivity, additional funds were invested in automation and digitalization initiatives. For 2023, the group forecasts total investment volume between €3.4 and €3.9 billion (2022: €4.1 billion).

DHL Group achieved a total consolidated net profit after non-controlling interests of €978 million in the second quarter of 2023 (Q2 2022: €1.5 billion). Basic earnings per share amounted to €0.82, compared to €1.19 the previous year.

Express: Effective Management of Earnings and Costs

Revenue in the Express business unit recorded a decline of 12.5 percent, amounting to €6.1 billion in the second quarter of 2023, partly as a result of negative exchange rate effects of €298 million and lower fuel surcharges. Excluding exchange rate effects and fuel surcharges, revenue decreased by 6.9 percent in the second quarter. As a result of the weak overall economic situation, a decline in daily volumes of time-definite international shipments (TDI) is recorded.

To address this, the focus was on effective cost management and network capacity optimization. The business unit countered the general inflationary effects with a systematic increase in prices. EBIT for the business unit decreased by 18.2 percent to €901 million in the second quarter of 2023. The return on sales was 14.7 percent.