Dr Frank Appel
Chief Executive Officer
1 March 2011
To become the company of choice for customers, employees and investors is a logical but also an ambitious goal. That’s why I’m quite pleased that we have made good progress towards this goal.
In 2010, the economy in many parts of the world saw a notable recovery. Transport volumes and the demand for logistics services grew noticeably. By taking strategic and operating measures, we made clear progress in nearly all divisions, taking full advantage of the economic recovery, something I never doubted.
Our consolidated revenue saw double-digit growth, rising by 11.4% to €51.5 billion. The savings generated in the previous year improved profitability in almost all divisions, coupled in some cases with significantly higher margins. Over the course of the year we raised our original forecast for earnings before non-recurring items twice. In the end, we exceeded our expectations by €100 million, closing the year at €2.2 billion. With substantial net liquidity, we find ourselves in a very stable financial position.
In our mail business, we have been required to apply value added tax to revenues generated with business customers since mid-2010. Revenue and earnings in the second half of the year suffered as a result. By contrast, our parcel business performed particularly well due to the brisk e-commerce market, which allowed us to more than compensate for the loss of the Quelle business.
Our DHL divisions are growing, especially in booming markets such as Asia. Restructuring in these divisions is now largely complete. For the first time the DHL divisions made the largest contribution to consolidated net profit.
Overall, your company achieved all the financial targets we had set for financial year 2010. I’d like to thank you, our shareholders, again for your trust in me and my colleagues on the Board of Management. Based on this year’s earnings, we shall propose to the Annual General Meeting an increase in the dividend to €0.65 per share.
I’d like to sincerely thank our around 470,000 employees, who received a special bonus at the end of the year in appreciation for their service.
Our Strategy 2015 has three objectives: we want to become the provider of choice for customers, the investment of choice for investors and as an employer our ambition is to attract and retain an exceptional number of highly qualified employees.
We strive to offer our customers solutions that make their lives easier. One of the best examples of this is our E-Postbrief. With the introduction of this product, we successfully launched a secure, confidential and reliable form of electronic communication onto the market. At DHL, we are getting better and better at developing integrated solutions for regions, industries and customer groups.
The results of our annual employee opinion survey indicate that we have made great progress along the path to becoming the employer of choice. This is one of my primary concerns. At 79%, the response rate for the last survey was very high. Improvements were achieved in all areas.
After talking with many of you, I know that as investors you count above all on reliability and continuity in addition to profitability and returns. Our finance strategy calls for distributing 40% to 60% of our net profits as dividends and for making our reporting more transparent in the future. Now that our restructuring is largely complete, we shall no longer report earnings adjusted for non-recurring items starting in the first quarter of 2011.
We anticipate that consolidated EBIT will reach between €2.2 billion and €2.4 billion in the current financial year. The MAIL division is expected to contribute €1.0 billion to €1.1 billion to this figure. In our DHL divisions, we expect an additional improvement of 10% to 17% in overall earnings to between €1.6 billion and €1.7 billion. Consolidated net profit is also likely to continue to improve in line with our operating business.
I am convinced that we shall outperform the market, even in the medium term, so long as we keep our eye on the key drivers of our business success: satisfied customers, dedicated employees and loyal investors.