Risks arising from corporate strategy

During the economic crisis, which endured the entire year under review, the Group focused greater attention on its core competencies and on organic growth. We want to grow profitably and improve our competitive standing through optimum integration of our divisions and processes.

In the past, the MAIL division made a substantial contribution to consolidated earnings. Now, however, the division can increasingly expect to see sales volume declines in its German mail business based on the general economic slowdown, increased competition and continuing substitution of physical communication with electronic communication. Our corporate planning takes into account declining revenues in the Mail Communication Business Unit in Germany. We regard the risk of a significant deviation from the projected figures as low. Moreover, we also see opportunities in digitalisation and are developing new electronic products for our mail business.

In the EXPRESS division, revenue dropped in all regions during the reporting year due to the recession. This effect was intensified by our exit from the domestic US express business. Network, price and administrative structures had to be adapted to these circumstances. In addition, we are selling unprofitable units in Europe. The restructuring of the express business, which has been underway since the end of 2008, is aimed at strengthening the EBIT margin in Europe. At present, we believe that the expenditures budgeted for restructuring will suffice. We are furthermore looking for new possibilities to increase revenues and earnings in economically attractive markets.