Capital expenditure rises in line with expectations

The Group’s aggregate capital expenditure (capex) amounted to €1,716 million at the end of 2011 (previous year: €1,262 million), up 36%.

Funds were used mainly to replace and increase assets as follows: €1,430 million was invested in property, plant and equipment and €286 million in intangible assets excluding goodwill. Investments in property, plant and equipment were mainly attributable to advance payments and assets under development (€637 million). Of this amount, 45% was allotted to Express Aviation. The remaining investments in property, plant and equipment were distributed as follows: transport equipment (€277 million), technical equipment and machinery (€238 million), IT equipment (€95 million) and other operating and office equipment (€87 million).

Our investments continued to focus strongly on Europe, the Americas and Asia. Within Europe, investments were centred on Germany and the UK, whereas in the Americas, key focus was on the United States, Mexico, Canada and Brazil. In Asia Pacific investments centred on China, India, Australia and Singapore.

MAIL invests in technology and quality leadership

Capital expenditure in the MAIL division fell in the reporting year from €446 million to €433 million. Investments related in particular to technical equipment and machinery (€138 million), internally generated software (€90 million) and other operating and office equipment (€62 million). We continue to invest in our technology and quality leadership in the mail market: the flat sorters purchased have a higher throughput and CO₂ efficiency to further improve delivery. We are also testing carbon-neutral delivery and taking measures intended to ease the work load of our employees, for example by buying e-bikes, work clothing and new operating equipment. We have expanded electronic platforms such as the E-Postbrief and our DieRedaktion.de journalists’ portal. To consolidate and expand our market leadership in Germany, we made major investments in our parcel business during 2011. One focus was our Production Concept 2012, which is aimed at establishing flexible IT structures and systems and adjusting production capacities to increasing shipment volumes. To meet customer demand, we expanded our network of Packstations. We continued to extend our MeinPaket.de shopping portal for small and medium-sized e-commerce retailers to strengthen this customer group’s ties with our company. We also restructured and improved the retail outlet network of Deutsche Post AG.

EXPRESS strengthens infrastructure

In the EXPRESS division, capital expenditure rose by 110% to €602 million (previous year: €286 million). During 2010 investments had been scaled back in the light of the global economic crisis. In the reporting year the investing activity was resumed to meet our regular investment requirements and actually increased in line with our strong growth. Capital expenditure in property, plant and equipment related mainly to advance payments and assets under development (€429 million), technical equipment and machinery (€50 million), aircraft (€36 million), IT (€21 million) and transport equipment (€20 million). Investments in intangible assets related to software (€7 million), as well as to advance payments and intangible assets under development (€3 million).

The advance payments and investments were primarily made to purchase new aircraft and carry out regulatory maintenance of the existing fleet. The ground network infrastructure has been strengthened throughout the regions. In the Asia Pacific region, we are currently investing in our new North Asia Hub in Shanghai. We have also bolstered our presence in the growth markets of India and China. In the Americas region, we focused investment on Mexico, Canada and our hub in Cincinnati (USA). In Europe, we modernised our Leipzig hub as well as terminals in Italy, the UK, Austria and Sweden.

GLOBAL FORWARDING, FREIGHT expands IT solutions

In the GLOBAL FORWARDING, FREIGHT division, a total of €135 million was invested in the year under review (previous year: €102 million). Of this figure, €100 million was attributable to the Global Forwarding business unit, where we continued to improve IT solutions for our global applications. Additionally, we fitted out and modernised our warehouses, especially in the Asia Pacific and Europe regions.

Funds of €35 million were invested in the Freight business unit, where they were used primarily for property, plant and equipment and transport equipment in the UK and Germany.

SUPPLY CHAIN invests in growth

In the SUPPLY CHAIN division, capex rose by 18% compared with the prior year to €252 million (previous year: €214 million). Of that amount, €223 million related to the Supply Chain business unit, €26 million to the Williams Lea business and €3 million to central entities. Approximately 60% of the funds were used to support new business. The Americas region focused on new business investments, primarily in the Consumer, Retail, Life Sciences & Healthcare sectors and in Latin America in the Automotive sector. In the UK, there has been continued investment within the Retail and Consumer sectors to expand the warehousing and transport solutions for new and existing customers, along with major investments in the Life Sciences & Healthcare sector to assist with start-ups and ongoing transport operations. Capital expenditure was significantly lower in other parts of Europe, where most funds were expended for replacement and renewal investments. In our Williams Lea business unit we concentrated primarily on marketing solutions and IT development.

Cross-divisional investments increase

Cross-divisional capital expenditure rose from €214 million in 2010 to €294 million in 2011. Capital expenditure for the purchase of vehicles had been considerably reduced in previous years, resulting in a significantly higher demand for new vehicles in the reporting year. IT investments increased as well, essentially due to licence purchases.