Capital expenditure increases in the first half of the year

As at the end of June 2011, the Group’s aggregate capital expenditure (capex) totalled €623 million. This represents a substantial rise of 30% year on year (previous year: €481 million), with the EXPRESS division acting as the main contributor to the increase. Funds were used mainly to replace and expand assets as follows: €539 million was invested in property, plant and equipment and €84 million in intangible assets excluding goodwill. Investments in property, plant and equipment related primarily to advance payments and assets under development (€284 million), transport equipment (€97 million), technical equipment and machinery (€72 million), IT equipment (€30 million) and aircraft (€16 million).

Our regional investments focused mainly on Europe, the Americas and Asia. Investments were centred on Germany, the United Kingdom, the US and South America as well as on China and India.

Capital expenditure in the MAIL division fell from €198 million to €143 million in the first half of 2011, primarily because some investments were deferred to later in the year and because high non-recurring expenses had been incurred for new sorting systems in the prior-year period.

In the EXPRESS division, capex amounted to €222 million in the first half of 2011, which is well above the prior-period figure of €104 million. The investments related mainly to the optimisation of our aircraft fleet as well as our European and Asian infrastructures.

In the GLOBAL FORWARDING, FREIGHT division a total of €36 million was invested in the first half of 2011 (previous year: €37 million). Of this figure, €23 million was attributable to the Global Forwarding business unit, where we focused on fitting out and modernising our warehouses especially in the Asia Pacific region. In the Freight business unit we invested €13 million, mainly in property, plant and equipment.

In the SUPPLY CHAIN division, capital expenditure increased by €39 million year on year to €121 million in the first half of 2011. Of this amount, €100 million was attributable to the Supply Chain business unit, €18 million to Williams Lea and €3 million to central entities. The investments were made to support new and existing business, with the majority of the increase relating to Supply Chain UK and Williams Lea UK.

Cross-divisional capital expenditure rose from €60 million in the first half of 2010 to €101 million in the reporting period. The purchase of vehicles accounted for the highest share of expenditure. In the first half of 2010, capital expenditure in this area had been considerably reduced when vehicle operating life was extended and new vehicle orders suspended.