Dr Frank Appel

Chief Executive Officer
Deutsche Post AG

30 July 2009
First half-year of 2009

In the first half of 2009 we navigated the Group successfully through the economic downturn, and we did this despite feeling the effects of a persistently poor economic climate and facing a sharp drop in shipment volumes.

We made great strides in the four areas of costs, working capital, capital expenditure and revenue. All in all, we held the line across the board thanks primarily to costs savings. All the divisions were profitable in the second quarter before non-recurring items with DHL and Deutsche Post contributing nearly equally to operating earnings.

Last autumn we announced our intention to lower indirect costs – for example, administrative, travel and IT costs – by one billion euros by the end of 2010 as part of our capital markets programme. Since we have progressed faster than anticipated, especially in the express business, and have already reduced annualised costs by €552 million since the start of the programme, we are confident that we will reach our original goal as early as in the second quarter of 2010.

Costs savings remain a top priority but it is equally important to show strength in a tough economy. Our new business wins of approximately €2 billion and the growth we have generated with several of our key customers in the first half of the year demonstrate that resilience. It also confirms that our customers value us as a reliable partner. In my view, this is a fine position to be in as we safely steer through the recession and emerge a stronger market leader.

We have not seen a substantial improvement in trading conditions over the second quarter and a short-term recovery is not yet in sight. Assuming the bottom has been reached in terms of volume declines but that risks continue from prolonged factory closures in Q3 and customer insolvencies, we believe underlying Group EBIT of €1.2 billion for the full year 2009 can be reached.

We are navigating successfully through the crisis and, with our Strategy 2015, which we presented in spring, we have laid the foundations for our future success: We want to remain Die Post für Deutschland (The Postal Service for Germany) and become The Logistics Company for the World. We have now defined clear objectives and begun implementing the appropriate measures. Feedback from our customers, employees and shareholders has been extremely positive.

Yours faithfully,