Revenue and earnings performance

Rise in adjusted revenue

Revenue in the SUPPLY CHAIN/CIS Division declined by 4.2% to €13,718 million (previous year: €14,317 million). However, adjusted for negative currency effects of €1,061 million and other inorganic items, the division achieved organic growth of 2.8%.

The Supply Chain Business Unit generated revenue of €12,469 million (previous year: €13,099 million) with revenue growth of 1.9% after excluding negative currency and other inorganic effects. The organic growth in our regions is tempered by customer losses and soft volumes resulting from the global economic environment. The Corporate Information Solutions Business Unit reported revenue of €1,243 million (previous year: €1,214 million). When excluding negative currency effects we maintained double-digit organic revenue growth, principally due to new business acquired in the previous year. This was partially offset by reduced volume levels in document management and in marketing solutions business as a result of the economic downturn.

More than 90% contract renewal rate

In the Supply Chain Business Unit we signed new contracts worth €1.1 billion (annual revenues) with existing and new customers. The renewal rate for contracts remained constant at more than 90%.

Earnings impacted by non-recurring items

In financial year 2008, the division registered a loss of €675 million before interest and taxes (previous year: profit of €577 million). This figure includes restructuring expenses of €124 million and write-downs on the value of the Exel brand amounting to €382 million, which is a result of the Group’s new branding strategy to use the DHL brand. Moreover, an impairment test as prescribed by IAS 36 resulted in an impairment loss of €610 million.

These non-recurring items, along with the sale of Vfw AG in 2007 and negative currency effects, led to a decrease in the division’s organic EBIT of 5.5%, particularly as a consequence of the negative impact on the Corporate Information Solution’s business in the financial sector. By contrast, the Supply Chain Business Unit saw organic growth of 5.7%, well ahead of organic revenue growth.

Operating cash flow amounted to €481 million (previous year: €319 million). Efficient working capital management and, in particular, a stronger focus on customer payment terms contributed to a significant improvement in cash flow.

 1 | 2 | 3

 1 | 2 | 3