MAIL division

Revenue at prior-year level

As at 1 July 2010, we transferred significant parts of Williams Lea Germany from the SUPPLY CHAIN division to the MAIL division. These parts are reported on in the Value-Added Services business unit. The previous year’s segment reporting figures were adjusted accordingly.

Revenue in the first quarter of 2011, which had one additional working day compared with 2010, amounted to €3,514 million and was therefore at the prior-year level (€3,506 million). Since 1 July 2010, we have been required to apply value added tax (VAT) to revenues generated from business customers. In order to retain this key customer group, we increased our graduated discount scale, which lowered our revenue. No currency effects were applicable in the reporting period.

More deliveries made to business customers

In the Mail Communication business unit, we made more deliveries to business customers for the second quarter in a row. However, since we increased the discount applicable to these deliveries, our revenue declined from €1,469 million to €1,386 million. Even though we retained and won back quality-conscious customers, some of our more price-sensitive customers turned to competitors.

The market is shrinking steadily owing to the increasing use of electronic means of communications. Information on market volumes is collected each year; for the latest figures, please see the 2010 Annual Report.

Revenue and volumes increase in addressed advertising mail

We saw a revenue and volume increase for addressed advertising mail and our Einkaufaktuell product in the reporting period. Customers are again increasing their advertising budgets. Revenue increased by 1.8% to €679 million (previous year: €667 million).

Press services revenue slightly below prior year

Revenue in the Press Services business unit totalled €202 million in the reporting period, 1.5% below the prior-year figure of €205 million. The German press services market, the volume of which we have described in detail in the 2010 Annual Report, continues to decline. Newspaper and magazine circulation is declining, although item weights remain stable.

Increased revenue from value-added services

Revenue in the Value-Added Services business unit reached €89 million, exceeding the previous year’s figure of €86 million by 3.5%. Growth in our document management and mailroom services was the main reason for the increase.

Parcel business profits from e-commerce

Revenue in the Parcel Germany business unit reached €706 million in the reporting period, improving on the previous year’s high figure of €650 million by 8.6%. This strong growth was similar to that achieved in the previous quarter. Mail-order business is generally returning to growth alongside the expanding e-commerce business, a trend that was reflected in our higher business customer volumes.

Retail outlet revenue at prior-year level

Revenue generated by our approximately 20,000 retail outlets and sales points amounted to €198 million in the reporting period and was thus at the previous year’s level (€196 million).

Slight revenue growth in international mail business

Revenue in the Global Mail business unit totalled €426 million in the reporting period, an increase of 0.7% on the prior-year figure of €423 million. We are registering encouraging revenue gains in both our international mail business and the traditional import and export business. Volumes declined year on year due to our having relinquished the bulk mail business in the Netherlands.

Solid earnings despite value added tax

With EBIT of €373 million, we were slightly below the prior-year level of €389 million in the MAIL division. Due to higher revenues in the parcel business, and strict cost management, we were able to compensate for most of the losses incurred from the above-mentioned discounts in the mail business. Return on sales was 10.6%.

Operating cash flow amounted to €–145 million (previous year: €–8 million). This figure is impacted in the first quarter of each year by the annual payments to the Bundes-Pensions-Service für Post und Telekommunikation. This is reflected especially in the high cash outflow in working capital.