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Ad hoc: Deutsche Post AG upgrades outlook for 2022 after preliminary FY 2020 results


Based on preliminary group results for the month of December and hence the full year 2020, management today has assessed the outlook for the coming years.

The finishing quarter of the year has seen the expected overall strong volume development, particularly driven by B2C volumes. The distribution of volumes across the period and the main trade lanes was well matched by network capacity allowing for high service levels being upheld despite unprecedented total volumes.

For the fourth quarter and hence the full year 2020 the financial performance forms out as follows:

Preliminary group revenue for the year 2020 stands at EUR 66.8 billion (Q4 2020: EUR 19.1 billion), up 5% from 2019 (Q4 2020: +13%)

Preliminary group EBIT reached around EUR 1.960 billion in Q4 2020 (up 56% from Q4 2019), bringing group full year 2020 EBIT to around EUR 4.840 billion. This includes the already communicated negative one-time effects of nearly EUR 600 million of the first 9 months, whereas there is no one-time effects in Q4 20 worth mentioning.
The divisional performances in 2020 in detail (all figures rounded):

Post & Parcel Germany:
Full year revenue of EUR 16.5 billion, up 7% yoy (Q4: EUR 4.8 billion, up 12% yoy).
Full year EBIT of EUR 1.590 billion, up 29% yoy (Q4: EUR 670 million, up 28% yoy).
Parcel volume growth accelerated through the quarter bringing Q4 total volumes ahead by 23% yoy to record levels. The decline rate for mail volumes in Q4 stabilized at – 7%.

Full year revenue of EUR 19.1 billion, up 12% yoy (Q4: EUR 5.6 billion, up 20% yoy).
Full year EBIT of EUR 2.750 billion, up 35% yoy (Q4: EUR 1.040 billion, up 70% yoy).
Core TDI volumes in Q4 increased in all regions and overall grew by 17%, bringing the full year growth rate to 9%. Main driver continued to be B2C volumes but Q4 also saw some further recovery in B2B volumes.

Global Forwarding, Freight:
Full year revenue of EUR 15.9 billion, up 5% yoy (Q4: EUR 4.4 billion, up 14% yoy).
Full year EBIT of EUR 590 million, up 13% yoy (Q4: EUR 170 million, down 2% yoy).

Supply Chain:
Full year revenue of EUR 12.5 billion, down 7% yoy (Q4: EUR 3.5 billion, down 3% yoy).
Full year EBIT of EUR 430 million, down by 53% yoy (Q4: EUR 175 million, down 1% yoy).

eCommerce Solutions:                                               
Full year revenue of EUR 4.8 billion, up 19% yoy (Q4: EUR 1.5 billion, up 33% yoy).
Full year EBIT of EUR 160 million, vs last year’s loss (Q4: EUR 75 million, vs last year’s loss).

The overall positive business development is underpinned by an ongoing strong development of cash flow; free cash flow has increased in the fourth quarter to around EUR 1.05 billion, resulting in a free cash flow of around EUR 2.5 billion for the full year of 2020.
Group gross capex in owned assets for the full year reached around EUR 3.0 billion.

In light of this strong performance going out of 2020 management adjusts the mid-term outlook as follows:

We expect group EBIT 2021 to be above the EBIT of 2020 adjusted for the above mentioned one-time effects (EUR 5.4 billion); further group EBIT 2022 is expected to be above the result of 2021.
A detailed guidance for 2021 and 2023 will be published on March 9th, 2020.

The outlook for the aggregate free cash flow for the period 2020 to 2022 is revised to more than EUR 6 billion (previous: EUR 5.0 – 6.0 billion). The total gross capex for the period is now expected to be at around EUR 9.5 billion (previous: EUR 8.5 – 9.5 billion). This includes the effect of the newly ordered eight 777 cargo aircraft as announced today.

The comprehensive disclosure for Q4 and the full year of 2020 will be released on March 9th, 2021 as planned.

Financial indicators:
Explanations on these financial indicators are available in the 2019 Deutsche Post DHL Group Annual Report (see page 14f) which is published on the company's website at the link below: