It was a sweet-and-sour quarterly result published by the Group last week. Air and ocean freight volumes went south, compared with the same period of the previous year, as did the express business. Group sales, which totaled €21 billion in Q1/23, fell by almost seven percent. Below the line, DPDHL achieved a net profit of €911 billion, compared with €1.4 billion in Q1/22.
Despite weaker figures, the quarterly results are roughly in line with management's expectations. This was emphasized by the new CEO, Tobias Meyer. Following the announcement of the figures, he
sat down on the Group CEO, Frank Appel’s chair, whose 15-year term as Head of DPDHL ended on the day of the Group's Annual General Meeting, last Thursday (04MAY23).
“We anticipated the slowdown in global growth momentum at an early stage and were able to respond efficiently. Our measures are taking effect and we have achieved a continued high revenue and earnings level. This was made possible by our consistent earnings and cost management, our well-balanced portfolio of logistics services, and our international footprint. We once again demonstrated the strong resilience of our business model and therefore fully confirm our forecast,” stated Mr. Meyer.
The EBIT forecast for fiscal 2023 contains three scenarios and ranges from €6.0 billion to €7.0 billion:
- The V-shaped model. It is the by far most attractive scheme, provided economic recovery starts around mid-year. It would allow DPDHL to achieve EBIT of €7 billion in fiscal 2023,
- U-shaped recovery: should the global economy pick up only towards year end, the Group anticipates EBIT of around €6.5 billion,
- L-shaped scenario: In case dark clouds continue to hover over the markets until Q1, 2024, the management forecasts EBIT of minimum €6.0 billion.
Further investments announced
Despite contracting volumes and profits, DPDHL keeps investing large amounts in sustainable logistics solutions and the strengthening of its global network. This was confirmed by Melanie Kreis, Chief Financial Officer of Deutsche Post DHL Group. The Group plans to renew its fleet of aircraft operating on intercontinental routes, coupled with investments in sustainable and low-emission transport structures. For the entire year, the Group targets an investment volume of between €3.4 billion and €3.9 billion (2022: €4.1 billion).
One beneficiary of the costly upgrading of ground infrastructure will be Munich Airport (MUC). There, DHL Express is erecting a new cargo building which will provide direct airside access, cutting-edge sorting technology, and contain an integrated service center. “The area currently used by us at Munich Airport was no longer able to keep up with the increase in cargo quantities thanks to the continuing trends of value chain globalization and international e-commerce growth,” explains Tobias Wider, COO DHL Express. The upcoming facility offers almost seven times as much space compared to the existing facility. And it meets high sustainability standards, emphasizes the DPDHL management. This is seen by state-of-the-art LED technology to illuminate the building, solar panels, and heat pumps for electricity provision and to heat or cool the facility depending on the outdoor temperature. “Both employees and customers in the region will benefit enormously from the new building once we begin operations there in 2024,” forecasts Mr. Wider.
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