Quarterly Report • May 19, 2014
Quarterly Report
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Deutsche Post DHL increased revenue and earnings in the fi rst quarter of 2014 despite the fact that our business suffered from signifi cant currency effects. The German parcel business in the Post - eCommerce - Parcel division as well as the inter national business in the EXPRESS division continued to witness especially dynamic growth. In the SUPPLY CHAIN division, we made further slight gains. By contrast, business was under pressure in the GLOBAL FORWARDING, FREIGHT division, particularly in air freight.
We continue to expect consolidated EBIT to reach between €2.9 billion and €3.1 billion in fi nancial year 2014. The Post - eCommerce - Parcel division is likely to contribute around €1.2 billion to this fi gure. Compared with the previous year, we expect an additional improvement in overall earnings to between €2.1 billion and €2.3 billion in the DHL divisions. Our EBIT after asset charge and operating cash fl ow performance metrics are expected to see further positive development in line with the respective EBIT trend.
The "mailbox" for parcels has been available since the middle of May 2014 for interested customers in Germany to buy or rent.
28 May 2014 An overview of all recipient services is available at: paket.de
2014 ANNUAL GENERAL MEETING (Frankfurt am Main) 27 May 2014
DIVIDEND PAYMENT
| Q 1 2013 adjusted 1 |
Q 1 2014 | + / – % | ||
|---|---|---|---|---|
| Revenue | € m | 13,403 | 13,569 | 1.2 |
| Profi t from operating activities (EBIT) | € m | 710 | 726 | 2.3 |
| Return on sales 2 | % | 5.3 | 5.4 | – |
| Consolidated net profi t for the period 3 | € m | 498 | 502 | 0.8 |
| Operating cash fl ow | € m | 121 | 83 | –31.4 |
| Net debt 4 | € m | 1,499 | 1,916 | 27.8 |
| Earnings per share 5 | € | 0.41 | 0.42 | 2.4 |
| Number of employees 6 | 435,218 | 436,974 | 0.4 | |
2 EBIT / revenue.
3 After deduction of non-controlling interests.
4 Prior-period amount as at December, for the calculation page of the Interim Group Management Report.
5 Basic earnings per share.
6 Average FTE s; prior-period amount corresponds to that of fi nancial year .
| INTERIM GROUP MANAGEMENT REPORT | 2 |
|---|---|
| General Information | 2 |
| Report on Economic Position | 2 |
| Deutsche Post Shares | 19 |
| Non-Financial Performance Indicators | 20 |
| Post-Balance-Sheet Date Events | 20 |
| Opportunities and Risks | 21 |
| Expected Developments | 22 |
| CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS | 25 | ||
|---|---|---|---|
| Income Statement | 25 | ||
| Statement of Comprehensive Income | 26 | ||
| Balance Sheet | 27 | ||
| Cash Flow Statement | 28 | ||
| Statement of Changes in Equity | 29 | ||
| Selected Explanatory Notes | 30 | ||
| Responsibility Statement | 43 | ||
| Review Report | 43 | ||
| Graphs and Tables | 44 | ||
| Contacts | II | ||
| Publication Service | II | ||
| Financial Calendar | II |
CONTACTS 14 May 2014
Tel.: + 49 (0) 228 182-6 36 36 First quarter of 2014
Fax: + 49 (0) 228 182-6 31 99 E-mail: ir @ dpdhl.com PRESS OFFICE
Tel.: + 49 (0) 228 182-99 44 Fax: + 49 (0) 228 182-98 80 E-mail: pressestelle @ dpdhl.com INTERIM REPORT JANUARY TO JUNE 2014 5 August 2014 Deutsche Post DHL had a good start to the year, in a continued subdued economic environment. In the first quarter of 2014, we were able to increase revenue to around €13.6 billion and profit from operating activities to €726 million, despite the fact that our business continued to suffer from significant currency effects.
PUBLICATION SERVICE PUBLICATION JANUARY TO SEPTEMBER 2014 12 November 2014 2015 As announced previously, we transferred parts of the domestic parcel business outside Germany from the DHL divisions to the renamed Post - eCommerce - Parcel division at the beginning of the year. This represents an initial strategic initiative integral to the further implementation of our medium-term Group strategy. We are already the market leader in the dynamically growing parcel business in Germany. We intend to transfer this know-how to other European and non-European markets in order to become one of the leading e-commerce logistics providers globally.
Published on 15 May 2014. ENGLISH TRANSLATION Deutsche Post Corporate Language Services et al. The English version of the Interim Report January to March 2014 of Deutsche Post DHL constitutes a translation of the original German INTERIM REPORT JANUARY TO MARCH 2015 12 May 2015 2015 ANNUAL GENERAL MEETING (FRANKFURT AM MAIN) 27 May 2015 The dynamic growth in the German parcel business played a key role in the encouraging increase in revenue within the Post - eCommerce - Parcel division in the first quarter of 2014. We are also witnessing continued strong growth in the international express business – with EBIT even recording double-digit growth. In the SUPPLY CHAIN division, where we have recently generated a high level of new business, revenue growth continued to be impacted by severe currency effects. As expected, revenue and earnings in the GLOBAL FORWARDING, FREIGHT division declined in a sustainedly weak market. The planned higher expenses for the NFE project played a role in this.
Only the German version is legally binding, insofar as this does not conflict with legal provisions in other countries. ORDERING INTERIM REPORT JANUARY TO JUNE 2015 5 August 2015 We are confirming our forecast for full-year 2014 and we continue to expect consolidated EBIT to reach between €2.9 billion and €3.1 billion. The Post - eCommerce - Parcel division is likely to contribute around €1.2 billion to this figure. In the DHL divisions, we expect an additional improvement in earnings to between €2.1 billion and €2.3 billion compared with the previous year.
EXTERNAL E-mail: ir @ dpdhl.com JANUARY TO SEPTEMBER 2015 11 November 2015 On April 2, we presented our 2020 strategy and we shall report on its progress in detail in the coming years. We shall continue to work hard to achieve our goals for the year 2015.
INTERNAL GeT and DHL Webshop Mat. no. 675-602-355
Deutsche Post DHL The Mail & Logistics Group PO box address Deutsche Post AG Headquarters 53250 Bonn GERMANY
Delivery address Deutsche Post AG Headquarters Charles-de-Gaulle-Str.20 53113 Bonn GERMANY
Visitor's address Deutsche Post AG Headquarters Platz der Deutschen Post 53113 Bonn GERMANY
Phone +49 228 182-0 Fax +49 228 182-7099
www.dpdhl.com
Organisation Research and development
Report on Economic Position Overall Board of Management assessment of the economic position
On 11 March 2014, the Supervisory Board of Deutsche Post AG appointed John Gilbert to the Group's Board of Management. He succeeds Bruce Edwards, who stepped down from the Board and from his position as Chief Executive Officer of DHL Supply Chain on 10 March 2014 after six successful years. Bruce Edwards will serve as advisor to the company until he retires.
Our domestic parcel business in Belgium, the Czech Republic, India, the Netherlands and Poland was consolidated in the MAIL division, effective 1 January 2014. This business was previously part of the EXPRESS and GLOBAL FORWARDING, FREIGHT divisions. The MAIL division was renamed the Post - eCommerce - Parcel (PeP) division as part of the Group's on-going strategic development.
As a service provider, Deutsche Post DHL does not engage in research and development activities in the narrower sense and therefore has no significant expenses to report in this connection.
Deutsche Post DHL increased revenue and earnings in the first quarter of 2014 despite the fact that our business suffered from significant currency effects. The German parcel business in the Post - eCommerce - Parcel division as well as the international business in the EXPRESS division continued to witness especially dynamic growth. In the SUPPLY CHAIN division, we made further slight gains. By contrast, business was under pressure in the GLOBAL FORWARDING, FREIGHT division, particularly in air freight. Although the annual prepayment to the Bundesanstalt für Post und Telekommunikation (German federal post and telecommunications agency) for pension and assistance benefits falls due in the first quarter, we achieved a positive operating cash flow. In the opinion of the Board of Management, therefore, the Group's financial position remains solid.
The moderate upturn in the global economy continued at the start of the year. Although the economic recovery took hold in most industrial countries, some emerging economies suffered from political unrest and uncertainty on the financial markets. The pace of growth therefore slowed somewhat on the whole, although the trend varied greatly from country to country.
Growth is expected to have softened somewhat in the Asian countries in the first quarter of 2014, even though this region continues to see the greatest economic momentum. In China, gross domestic product (GDP) was weaker than in the prior quarter with growth of 7.4%. Japan is experiencing a solid economic upturn. GDP grew strongly, primarily on the back of industrial production and consumer spending and in no small measure as a consequence of purchases being brought forward due to the significant VAT increase in April.
The upswing continued in the United States. Consumer spending and investments in machinery and equipment are likely to have risen again. However, the unusually cold weather put the brakes on the economy and the unemployment rate remained quite high by US standards. The US Federal Reserve kept its key interest rate at between 0% and 0.25% in order to boost the economy and the labour market.
GDP in the euro zone is expected to have seen moderate growth again. Investments in machinery and equipment as well as consumer spending rose moderately, with positive impulses coming primarily from the corporate sector. In addition, the sovereign debt crisis continued to lessen in severity. The situation on the labour market stabilised whilst the inflation rate dropped again. In this climate, the European Central Bank (ECB) kept its key interest rate at 0.25%.
Measured on the basis of the available indicators, the upturn in the German economy accelerated considerably in early 2014. Industrial production made especially good gains compared with the previous quarter, a development due in part to a spell of unseasonally mild weather. In February, the German Ifo Business Climate Index reached its highest level in several years before slipping again slightly. The working population grew sharply and unemployment fell notably.
There were no events with material effects on the Group's net assets, financial position and results of operations in the first quarter of 2014.
| Q1 2013 adjusted1 |
Q1 2014 | ||
|---|---|---|---|
| Revenue | €m | 13,403 | 13,569 |
| Profit from operating activities (EBIT) | €m | 710 | 726 |
| Return on sales2 | % | 5.3 | 5.4 |
| Consolidated net profit for the period3 | €m | 498 | 502 |
| Earnings per share4 | € | 0.41 | 0.42 |
1 Note 4.
2 EBIT/revenue.
3 After deduction of non-controlling interests. 4 Basic earnings per share.
The amendments to IFRS 10 (Consolidated Financial Statements) and IFRS 11 (Joint Arrangements) have been required to be applied since 1 January 2014. This had a minor overall impact on a number of items in the balance sheet and income statement. Detailed information can be found in the Notes.
Our domestic parcel business in Belgium, the Czech Republic, India, the Netherlands and Poland was consolidated in the Post - eCommerce - Parcel (PeP) division at the beginning of the year. This business was previously part of the EXPRESS and GLOBAL FORWARDING, FREIGHT divisions.
In addition, the US company Sky Courier Inc. was reallocated from the EXPRESS division to the GLOBAL FORWARDING, FREIGHT division in the first quarter.
The prior-year amounts have been adjusted. We refrain from repeating this remark in the following explanations to the interim group management report.
Consolidated revenue rose slightly by 1.2% to €13,569 million in the first quarter of 2014 (previous year: €13,403 million). Due to negative currency effects of €461 million, the proportion of consolidated revenue generated abroad declined from 68.3% in the prior-year period to 67.8%. In addition, changes in the portfolio reduced revenue by €90 million.
Other operating income was €389 million in the reporting period, down €51 million year-on-year. The prior-year figure included deconsolidation gains on the sale of the Cargus International domestic express business in Romania, amongst other things.
Materials expense rose by €51 million to €7,529 million, primarily due to the increase in goods purchased and held for resale for the business with the UK National Health Service in the SUPPLY CHAIN division.
Staff costs rose by €83 million to €4,537 million. This was mainly attributable to the increase in the number of employees in the SUPPLY CHAIN division and higher labour costs in the PeP division.
At €321 million, depreciation, amortisation and impairment losses were on a level with the previous year (€320 million).
Other operating expenses declined by €36 million to €845 million, largely due to lower consulting costs.
Q1 2014 Q1 2013 adjusted
| €m | % | ||
|---|---|---|---|
| Revenue | 13,569 | 1.2 • Currency effects reduced consolidated revenue by €461 million |
|
| Other operating income | 389 | –11.6 • Prior-year figure also included €12 million in deconsoli dation gains on the sale of the domestic express business in Romania |
|
| Materials expense | 7,529 | 0.7 • Increase in cost of goods purchased and held for resale in SUPPLY CHAIN division |
|
| Staff costs | 4,537 | 1.9 • Increased number of staff, mostly in SUPPLY CHAIN • Higher labour costs in the PeP division |
|
| Depreciation, amortisation and impairment losses |
321 | 0.3 • Virtually unchanged | |
| Other operating expenses | 845 | – 4.1 | • Lower consulting costs |
Profit from operating activities (EBIT) improved compared with the previous year, rising by 2.3% to €726 million in the first quarter of 2014.
By contrast, net finance costs widened from €43 million to €79 million due in particular to lower interest income. The prior-year figure included interest income from the reversal of a provision for interest on tax liabilities.
Profit before income taxes declined from €667 million to €647 million. Income taxes also decreased, falling €24 million to €123 million.
Consolidated net profit for the period improved slightly from €520 million to €524 million in the reporting period. Of this amount, €502 million is attributable to shareholders of Deutsche Post AG and €22 million to non-controlling interest holders. Basic earnings per share rose from €0.41 to €0.42; diluted earnings per share remained unchanged at €0.40.
EAC improved from €367 million to €380 million in the first quarter of 2014, due primarily to the company's increased profitability. The imputed asset charge rose moderately by 0.9%, mainly because provisions declined during the previous year and net working capital increased.
| EAC | 367 | 380 | 3.5 |
|---|---|---|---|
| Asset charge | –343 | –346 | – 0.9 |
| EBIT | 710 | 726 | 2.3 |
| €m | Q1 2013 adjusted1 |
Q1 2014 | +/– % |
| €m | Q1 2013 adjusted1 |
Q1 2014 |
|---|---|---|
| Cash and cash equivalents as at 31 March | 2,498 | 2,570 |
| Change in cash and cash equivalents | 127 | – 835 |
| Net cash from operating activities | 121 | 83 |
| Net cash used in investing activities | –234 | – 4 |
| Net cash from/used in financing activities | 240 | – 914 |
1 Note 4.
Liquidity situation remains solid
The principles and aims of our financial management as presented in the 2013 Annual Report from page 51 remain valid and continue to be pursued as part of our finance strategy. The net cash used in financing activities in the first quarter of 2014 resulted from the planned repayment of a bond falling due in January.
In spite of a rise in funds from operations (FFO), the FFO to debt performance metric decreased slightly in the first quarter of 2014 as expected. This can be attributed to the annual pension prepayment to the Bundesanstalt für Post und Telekommunikation. Nonrecurring income/expenses include operating restructuring payments of €68 million.
Our credit quality as rated by Moody's Investors Service (Moody's) and Fitch Ratings (Fitch) has not changed from the ratings of "Baa1" and "BBB+", respectively, as described in the 2013 Annual Report beginning on page 54. The positive outlook from Moody's and the stable outlook from Fitch are also still applicable. In view of our solid liquidity, the five-year syndicated credit facility with a total volume of €2 billion was not drawn down during the reporting period. As at 31 March 2014, the Group had cash and cash equivalents of €2.6 billion.
| €m | 1 Jan. to | 1 April 2013 |
|---|---|---|
| 31 Dec. 2013 | to 31 March | |
| adjusted1 | 2014 | |
| Operating cash flow before changes in working capital | 3,079 | 3,175 |
| Interest and dividends received | 56 | 56 |
| Interest paid | 166 | 165 |
| Adjustment for operating leases | 1,240 | 1,240 |
| Adjustment for pensions | 144 | 144 |
| Non-recurring income/expenses | 73 | 68 |
| Funds from operations (FFO) | 4,426 | 4,518 |
| Reported financial liabilities2 | 5,954 | 5,094 |
| Financial liabilities at fair value through profit or loss2 | 40 | 35 |
| Adjustment for operating leases3 | 5,099 | 5,099 |
| Adjustment for pensions3 | 4,941 | 4,941 |
| Surplus cash and near-cash investments2, 4 | 3,082 | 1,692 |
| Debt | 12,872 | 13,407 |
| FFO to debt (%) | 34.4 | 33.7 |
1 Note 4.
2 As at 31 December 2013 and 31 March 2014, respectively.
3 As at 31 December 2013.
4 Surplus cash and near-cash investments are defined as cash and cash equivalents and investment funds callable at sight, less cash needed for operations.
The Group's aggregate capital expenditure (capex) amounted to €176 million as at the end of March 2014, which reflects a decline of 18.1% versus the prior-year figure (€215 million). Funds were used mainly to replace and expand assets as follows: €142 million was invested in property, plant and equipment and €34 million in intangible assets excluding goodwill. Investments in property, plant and equipment related to advance payments and assets under development (€89 million), IT equipment (€12 million), technical equipment and machinery (€10 million), operating and office equipment (€10 million), land and buildings (€9 million), transport equipment (€7 million) and aircraft (€5 million). In regional terms, our focus remained on Europe and the Americas as well as on Asia.
| PeP | EXPRESS | GLOBAL FORWARDING, FREIGHT SUPPLY CHAIN |
Corporate Center/ Other |
Group | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 adjusted |
2014 | 2013 adjusted |
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 adjusted |
2014 | |
| Capex (€m) | 49 | 37 | 74 | 39 | 19 | 23 | 47 | 65 | 26 | 12 | 215 | 176 |
| Depreciation, amortisation and impairment losses (€m) |
87 | 93 | 89 | 89 | 23 | 22 | 70 | 64 | 51 | 53 | 320 | 321 |
| Ratio of capex to depreciation, amortisation and impairment losses |
0.56 | 0.40 | 0.83 | 0.44 | 0.83 | 1.05 | 0.67 | 1.02 | 0.51 | 0.23 | 0.67 | 0.55 |
Capital expenditure in the PeP division decreased from €49 million to €37 million, with the largest portion of this again attributable to the Parcel Production Concept. Investments in other operating and office equipment, and technical equipment and machinery were made primarily to enhance IT performance and adapt capacities to rising shipment volumes.
In the EXPRESS division, capital expenditure totalled €39 million in the reporting period (previous year: €74 million). The majority of our investments centred on maintaining our aircraft fleet as well as expanding our global hubs in Leipzig and Cincinnati. In line with our strategy we focused on the emerging markets at a regional level.
In the GLOBAL FORWARDING, FREIGHT division, a total of €23 million was invested in the first quarter of 2014 (previous year: €19 million). Of that figure, €19 million was attributable to the Global Forwarding business unit, where we continued to improve our IT, particularly for the New Forwarding Environment project. We also fitted out and consolidated warehouses across all regions. A total of €4 million was invested in the Freight business unit, mainly for software, IT, operating equipment and real estate.
In the SUPPLY CHAIN division, capital expenditure amounted to €65 million in the reporting period (previous year: €47 million). Of that amount, €55 million related to the Supply Chain business unit, €7 million to Williams Lea and €3 million to central entities. Around 51% of the funds were used to support new business globally. The majority of the increased expenditure in the first quarter of 2014 was attributable to new customer projects in the Americas and Europe regions.
Cross-divisional capital expenditure decreased from €26 million in the prior-year period to €12 million in the first quarter of 2014, predominantly due to lower expenditure for vehicles. Investments continued to focus primarily on IT equipment and vehicles.
1 Prior-period amount adjusted.
12 Operating cash flow by division, Q1 2014
8
Net cash from operating activities amounted to €83 million in the first quarter of 2014, down €38 million on the prior-year period. In contrast, net cash from operating activities before changes in working capital rose by €96 million to €793 million. Alongside improved EBIT, this was impacted positively in particular by the change in provisions and the decrease in income tax payments. By contrast, the cash outflow from changes in working capital increased by €134 million, mainly due to the change in receivables and other current assets. Operating cash flow is regularly impacted in the first quarter by the annual prepayment to the Bundesanstalt für Post und Telekommunikation; the 2014 payment was €535 million.
Net cash used in investing activities declined to €4 million in the first quarter of 2014, compared with €234 million in the prior-year period. The sale of money market funds in particular resulted in a cash inflow of €400 million from changes in current financial assets. In contrast, cash paid to acquire non-current assets rose from €313 million to €488 million. Although some of the investments in property, plant and equipment and intangible assets had been capitalised at the end of 2013, the cash was only paid in the first quarter of 2014. Proceeds from disposal of non-current assets were down slightly on the previous year at €63 million.
| €m | Q1 2013 adjusted1 |
Q1 2014 |
|---|---|---|
| Net cash from operating activities | 121 | 83 |
| Sale of property, plant and equipment and intangible assets | 47 | 47 |
| Acquisition of property, plant and equipment and intangible assets | –291 | – 448 |
| Cash outflow arising from change in property, plant and equipment and intangible assets |
–244 | – 401 |
| Disposal of subsidiaries and other business units | 17 | 0 |
| Acquisition of subsidiaries and other business units | 1 | 0 |
| Cash inflow arising from acquisitions/divestitures | 18 | 0 |
| Interest received | 18 | 17 |
| Interest paid | – 49 | – 48 |
| Net interest paid | –31 | –31 |
| Free cash flow | –136 | –349 |
1 Note 4.
Free cash flow deteriorated from €–136 million to €–349 million, primarily due to the increase in cash paid to acquire property, plant and equipment and intangible assets.
Net cash used in financing activities amounted to €914 million and related mainly to the repayment of a bond in January (€926 million). The prior-year figure represented a cash inflow of €240 million, which was attributable amongst other things to a loan taken out with Deutsche Post Betriebsrenten-Service e.V. and which increased current financial liabilities by €297 million.
Changes in the cash flows from the individual areas of activity saw cash and cash equivalents decline from €3,414 million as at 31 December 2013 to €2,570 million.
| 31 Dec. 2013 adjusted1 |
31 March 2014 | ||
|---|---|---|---|
| Equity ratio | % | 28.3 | 29.0 |
| Net debt | €m | 1,499 | 1,916 |
| Net interest cover2 | 22.9 | 23.4 | |
| Net gearing | % | 13.0 | 15.9 |
| FFO to debt3 | % | 34.4 | 33.7 |
1 Note 4.
2 In the first quarter.
3 For the calculation page 6.
The Group's total assets amounted to €34,827 million as at 31 March 2014, €634 million lower than at 31 December 2013 (€35,461 million).
Non-current assets fell by €136 million to €21,234 million. At €11,797 million, intangible assets were down slightly compared with the figure at 31 December 2013, primarily as a result of amortisation. Property, plant and equipment declined by €152 million, from €6,800 million to €6,648 million. At €142 million, additions were well below depreciation (€253 million). By contrast, non-current financial assets rose by €46 million to €1,169 million. Other non-current assets declined by €32 million to €155 million, primarily due to the decrease in pension assets as a result of actuarial losses. Deferred tax assets increased from €1,327 million to €1,366 million.
At €13,593 million, current assets were down €498 million on the figure as at 31 December 2013. Current financial assets decreased significantly by €456 million to €365 million, largely because we reversed a short-term investment in money market funds in the amount of €400 million in January and used this to repay a bond. Trade receivables rose by €143 million to €7,165 million. In particular, other current assets increased sharply by €660 million to €2,883 million. This figure includes €384 million relating to the accrual of the prepaid annual contribution to the Bundesanstalt für Post und Telekommunikation for pension and assistance benefits. Cash and cash equivalents declined by €844 million to €2,570 million. The reasons for this are described in detail in the section on the Group's financial position.
At €9,892 million, equity attributable to Deutsche Post AG shareholders was €48 million higher than at 31 December 2013 (€9,844 million). Although consolidated net profit for the period made a positive contribution, actuarial losses on pension obligations reduced equity.
Current and non-current liabilities declined from €16,946 million to €15,887 million. This was largely attributable to the decrease in financial liabilities by €860 million to €5,094 million, mainly resulting from the repayment of a bond in the amount of €926 million. Trade payables declined from €6,358 million to €5,554 million as at the reporting date. In contrast, other current liabilities rose by €542 million to €4,520 million, primarily due to an increase in liabilities to employees. Current and non-current provisions increased from €8,481 million to €8,840 million because actuarial losses led to the recognition of additional provisions for pensions.
Our net debt rose from €1,499 million as at 31 December 2013 to €1,916 million as at 31 March 2014, due in part to the annual contribution to the Bundesanstalt für Post und Telekommunikation. At 29.0%, the equity ratio was slightly higher than at 31 December 2013 (28.3%). Net interest cover shows the extent to which net interest obligations are covered by EBIT. This indicator improved from 22.9 to 23.4. Net gearing was 15.9% as at 31 March 2014.
| 15 | Net debt |
|---|---|
| €m | 31 Dec. 2013 adjusted1 |
31 March 2014 |
|---|---|---|
| Non-current financial liabilities | 4,599 | 4,624 |
| Current financial liabilities | 1,297 | 395 |
| Financial liabilities | 5,896 | 5,019 |
| Cash and cash equivalents | 3,414 | 2,570 |
| Current financial assets | 821 | 365 |
| Long-term deposits2 | 55 | 56 |
| Positive fair value of non-current financial derivatives2 | 107 | 112 |
| Financial assets | 4,397 | 3,103 |
| Net debt | 1,499 | 1,916 |
1 Note 4.
2 Reported in non-current financial assets in the balance sheet.
| €m | Q1 2013 adjusted |
Q1 2014 | +/– % |
|---|---|---|---|
| Post - eCommerce - Parcel | |||
| Revenue | 3,815 | 3,953 | 3.6 |
| of which Post | 2,526 | 2,610 | 3.3 |
| eCommerce - Parcel | 1,289 | 1,343 | 4.2 |
| Profit from operating activities (EBIT) | 397 | 398 | 0.3 |
| Return on sales (%)1 | 10.4 | 10.1 | – |
| Operating cash flow | 117 | 135 | 15.4 |
| EXPRESS | |||
| Revenue | 2,813 | 2,879 | 2.3 |
| of which Europe | 1,310 | 1,354 | 3.4 |
| Americas | 517 | 517 | 0.0 |
| Asia Pacific | 936 | 986 | 5.3 |
| MEA (Middle East and Africa) | 229 | 220 | –3.9 |
| Consolidation/Other | –179 | –198 | –10.6 |
| Profit from operating activities (EBIT) | 241 | 275 | 14.1 |
| Return on sales (%)1 | 8.6 | 9.6 | – |
| Operating cash flow | 145 | 285 | 96.6 |
| GLOBAL FORWARDING, FREIGHT | |||
| Revenue | 3,610 | 3,529 | –2.2 |
| of which Global Forwarding | 2,630 | 2,523 | – 4.1 |
| Freight | 1,014 | 1,040 | 2.6 |
| Consolidation/Other | –34 | –34 | 0.0 |
| Profit from operating activities (EBIT) | 87 | 48 | – 44.8 |
| Return on sales (%)1 | 2.4 | 1.4 | – |
| Operating cash flow | 73 | – 97 | – |
| SUPPLY CHAIN | |||
| Revenue | 3,472 | 3,506 | 1.0 |
| of which Supply Chain | 3,160 | 3,177 | 0.5 |
| Williams Lea | 314 | 331 | 5.4 |
| Consolidation/Other | –2 | –2 | 0.0 |
| Profit from operating activities (EBIT) | 83 | 84 | 1.2 |
| Return on sales (%)1 | 2.4 | 2.4 | – |
| Operating cash flow | 77 | 28 | – 63.6 |
1 EBIT/revenue.
In the first quarter of 2014, revenue in the division was €3,953 million, 3.6% above the prior-year figure of €3,815 million, which is partially attributable to 0.6 additional working days in Germany compared with the prior-year period. After parts of the domestic parcel business outside Germany had been transferred to the Post - eCommerce - Parcel (PeP) division effective 1 January 2014, the figures for the current financial year and the prior-year were adjusted accordingly. Overall, negative currency effects amounted to €21 million in the reporting period.
The Post business unit comprises the domestic mail business, retail outlet business as well as the import/export business. It also includes new services such as E-POST and Postbus.
The eCommerce - Parcel business unit bundles all domestic parcel activities. This includes, in addition to our home market Germany, existing business in the United States and the transferred domestic business in Europe and Asia.
Overall performance in the Post business unit was encouraging. Revenue in the first quarter of 2014 was €2,610 million, 3.3% above the prior year's figure of €2,526 million. In addition to the increase in price for a standard letter at the beginning of the year, this is attributable to the overall rise in volumes. A driver was the letters sent out in advance of the Single Euro Payments Area (SEPA) migration.
Revenue and sales of addressed advertising mail benefited in the reporting period from increased advertising expenditures from mail-order businesses and the public sector. Although the volumes of unaddressed advertising mail declined in the same period, overall both revenue and sales were above the prior-year level.
The press services market remains in decline. Daily newspaper and consumer magazine circulation, in particular, continue to decrease. Over the reporting period our revenue and sales in this business were below the prior-year level.
The international import/export business in the reporting period also fell slightly on the prior-year level. Export volumes declined slightly due to the increasing use of electronic communication.
| 17 Post: volumes |
|||
|---|---|---|---|
| Mail items (millions) | Q1 2013 adjusted |
Q1 2014 | +/– % |
| Total | 5,285 | 5,394 | 2.1 |
In order to take advantage of the opportunities that the strong growth in e-commerce presents us, the Group bundles its domestic parcel business and cross-border parcel dispatch in the PeP division. We intend to expand our dominant market position in e-commerce logistics in Germany and gradually transfer this expertise to further parcel markets. This includes, above all, offering DHL Parcel's established recipient services in other European countries in the medium-term in order to make the process of sending and receiving goods more convenient for customers. Furthermore, we aim to capitalise on the opportunities offered by providing e-commerce services in selected markets around the world. Over and above this, we want to become the market leader for cross-border e-commerce services on the most attractive international trade routes.
In the first quarter of 2014, revenue in the eCommerce - Parcel business unit was €1,343 million, exceeding the prior-year figure of €1,289 million by 4.2%. Business in Germany, in particular, recorded a successful start to the year with both revenue and sales witnessing a further significant increase. Revenue and sales in the transferred domestic parcel business in Europe were slightly above the prior-year level. Negative currency effects of €19 million had a small impact on revenue performance in the United States and Asia. Sales were slightly below the prior-year figure as a result of measures to streamline the customer portfolio in the United States.
As in previous quarters, increased material and labour costs as well as the continued expansion of our parcel network impeded an improvement in earnings, although revenue saw an encouraging increase. EBIT in the division was €398 million in the reporting period and therefore on a par with the prior year (€397 million). The return on sales was 10.1%.
Operating cash flow increased from €117 million to €135 million, which was attributable mainly to a significantly lower net cash outflow from working capital. The annual prepayment to the Bundesanstalt für Post und Telekommunikation was due in the first quarter. This payment was €477 million for the PeP division. Working capital was €–167 million, remaining significantly above the prior-year level (€−382 million).
In the first quarter of 2014, revenue in the division increased by 2.3% to €2,879 million (previous year: €2,813 million). Excluding considerable negative currency effects of €157 million and the effect from the sale of the domestic express business in Romania in the first quarter of 2013, revenue growth was an encouraging 8.1%.
In the Time Definite International (TDI) product line, daily revenues rose by 9.2% compared with the first quarter of 2013. Year-on-year, our customers sent 7.6% more shipments each day.
In the Time Definite Domestic (TDD) product line, daily revenues in the reporting period declined by 2.6% compared with the prior year. Shipment volumes increased slightly by 0.8%.
Effective 1 January 2014, we transferred the Indian subsidiary Blue Dart as well as the domestic express business in the Netherlands, Belgium and Poland to the PeP division. The subsidiary SkyCourier Inc. in the United States was transferred to the GLOBAL FORWARDING, FREIGHT division. In future, our focus in the EXPRESS division in these countries will be on our core competence, the international business.
| €m per day 1 | Q1 2013 | Q1 2014 | +/– % |
|---|---|---|---|
| adjusted | |||
| Time Definite International (TDI) | 32.6 | 35.6 | 9.2 |
| Time Definite Domestic (TDD) | 3.9 | 3.8 | –2.6 |
1 To improve comparability, product revenues were translated at uniform exchange rates. These revenues are also the basis for the weighted calculation of working days.
| Thousands of items per day 1 | Q1 2013 | Q1 2014 | +/– % |
|---|---|---|---|
| adjusted | |||
| Time Definite International (TDI) | 615 | 662 | 7.6 |
| Time Definite Domestic (TDD) | 357 | 360 | 0.8 |
1 To improve comparability, product revenues were translated at uniform exchange rates. These revenues are also the basis for the weighted calculation of working days.
Revenue in the Europe region increased by 3.4% in the reporting period to €1,354 million (previous year: €1,310 million). The figure included negative currency effects of €22 million, which related mainly to our business activities in Russia and Turkey. Excluding these effects and the effect from the sale of the domestic express business in Romania in the first quarter of 2013, revenue growth was 5.4%. Daily revenues grew by 5.4% in the TDI product line, due primarily to the increase in shipment volumes which rose by 3.7%.
Revenue generated in the Americas region was €517 million in the first quarter of 2014 and therefore at exactly the same level as in the prior period. The figure for the reporting period included considerable negative currency effects of €52 million, which occurred mainly in Venezuela, the United States and other South and Central American countries. Excluding these effects, revenue in the region grew by a double-digit figure of as much as 10.1%. In the TDI product line, daily revenue in the reporting period rose by 10.4% due largely to the 9.3% increase in per-day shipment volumes.
In the first quarter of 2014, revenue in the Asia Pacific region increased by 5.3% to €986 million (previous year: €936 million). The figure included negative currency effects of €72 million, which related primarily to our business activities in Japan, India and Australia as well as other countries in the region. Excluding these effects, the yearon-year revenue increase was an encouraging 13.0%. In the TDI product line, both daily revenues and per-day volumes saw double-digit growth of 12.4% and 11.3%, respectively.
In the MEA region (Middle East and Africa), revenue in the reporting period was €220 million and thus 3.9% below the prior year's figure of €229 million. The figure for the reporting period included negative currency effects of €12 million; excluding these effects, revenue grew year-on-year by 1.3%. In the TDI product line, daily revenues increased by 10.2% and per-day volumes by 11.0%.
In the first quarter of 2014, EBIT in the division improved by 14.1% to €275 million (previous year: €241 million). Increased revenues, the higher operating profitability of our network and strict indirect cost management in particular contributed to this improvement. The EBIT figure for the first quarter of the previous year included a €12 million deconsolidation gain on the divestment of the domestic express business in Romania. Return on sales rose significantly in the reporting period from 8.6% to 9.6%. Thanks mainly to the improved operating profit and continued working capital management, we increased our operating cash flow in the first quarter of 2014 by 96.6% to €285 million.
In the first quarter of 2014, revenue in the division decreased by 2.2% to €3,529 million (previous year: €3,610 million). The figure included negative currency effects of €173 million. The freight forwarding business also declined in the first quarter of 2014. Excluding currency effects, revenue saw a 2.5% year-on-year increase. Reduced prices also had an impact on revenue.
In the Global Forwarding business unit, revenue declined by 4.1% to €2,523 million (previous year: €2,630 million). Excluding negative currency effects of €156 million, however, revenue grew by 1.9%. Gross profit decreased by 7.6% to €574 million (previous year: €621 million).
With our strategic project New Forwarding Environment (NFE) we are continuing to make good progress.
In the reporting period, revenues in air and ocean freight declined year-on-year. Whereas air freight volumes remained stable, ocean freight volumes increased. Fuel prices remained high whilst air freight rates rose slightly and ocean freight rates remained stable.
Our air freight volumes in the reporting period were on a par with the prior year despite lower demand from several large customers who also switched partially from air to sea. Although higher freight rates were announced, short-term purchases on the spot market kept rates stable. Airlines continued to expand their passenger capacities whilst reducing their freight capacities resulting in further pressure on rates. In addition, several large airlines adjusted the basis for calculating fuel surcharges, which also had a negative impact on margins. In the fourth quarter of the previous year, we won several larger contracts that will be implemented in the current financial year. Our revenue in the first quarter of 2014 declined by 5.0%; gross profit decreased by 12.4%.
Ocean freight volumes were up 4.7% year-on-year. The main driver for this increase was new business won in the previous year, which was booked in the first quarter of 2014. The ex-Asian routes continue to record the highest volume developments. Whilst exports from Europe remain stable, demand on the north-south routes is increasing amidst stable rates. However, spot market rates are declining on the east-west trade lanes in particular. Ocean carriers have already announced rate increases. Our ocean freight revenue in the reporting period was down 3.1%. The very noticeable pressure on margins is the reason for the opposing development of volumes and revenue. Gross profit declined by 4.3%.
Our industrial project business (in table 20, reported as part of Other) performed on a par with the previous year. The share of revenue related to industrial project business and reported under Other remained stable at 37.4% (previous year: 37.5%). Gross profit declined by a single-digit percentage compared with the prior-year period.
| €m | |||
|---|---|---|---|
| Q1 2013 | Q1 2014 | +/– % | |
| adjusted | |||
| Air freight | 1,215 | 1,154 | – 5.0 |
| Ocean freight | 866 | 839 | –3.1 |
| Other | 549 | 530 | –3.5 |
| Total | 2,630 | 2,523 | – 4.1 |
| Q1 2013 | Q1 2014 | +/– % | |
|---|---|---|---|
| adjusted | |||
| tonnes | 934 | 933 | – 0.1 |
| tonnes | 519 | 520 | 0.2 |
| TEUs1 | 658 | 689 | 4.7 |
1 Twenty-foot equivalent units.
In the Freight business unit, revenue increased by 2.6% to €1,040 million in the reporting period (previous year: €1,014 million). Negative currency effects of €18 million were offset by business growth in Eastern Europe, Germany and Scandinavia. The persistently high pressure on margins in the highly competitive European transport market as well as negative currency effects reduced gross profit slightly by 1.5% to €271 million in the reporting period (previous year: €275 million).
EBIT in the division declined to €48 million in the reporting period (previous year: €87 million). As anticipated, expenses for NFE rose significantly. At the same time, gross profit margins declined again despite continued strict cost management. The return on sales declined to 1.4% (previous year: 2.4%).
Net working capital in the first quarter of 2014 remained on a par with the prior year. Operating cash flow decreased to €–97 million (previous year: €73 million), primarily in response to the development of working capital in the fourth quarter of 2013.
22 SUPPLY CHAIN: revenue by sector, Q1 2014
23 SUPPLY CHAIN: revenue by region, Q1 2014
Revenue in the division increased by 1.0% to €3,506 million in the first quarter of 2014 (previous year: €3,472 million). Growth was impacted by negative currency effects of €115 million and the loss of revenue from prior-year disposals of €85 million. Excluding these effects, revenue growth was 6.7%.
Revenue in the Supply Chain business unit was €3,177 million, a slight increase of 0.5% (previous year: €3,160 million). Excluding business disposals and negative currency effects, growth was 6.7%. On this basis, growth in the emerging markets was better than that of the business unit as a whole. The Automotive and Life Sciences&Healthcare sectors represented a higher proportion of revenue compared with the previous year, offset by a slightly lower share in the Consumer and Retail sectors. Revenue from the top 20 customers increased by 5.2%.
In the Americas region, growth was impacted primarily by currency effects: the Brazilian real as well as the Canadian and US dollars weakened against the euro. Moreover, revenue no longer includes Exel Direct Inc., which we disposed of in the second quarter of 2013. Excluding negative currency effects the highest revenue growth was generated in Canada and Brazil, the latter being driven by improved transport volumes.
In the Asia Pacific region, we achieved substantial revenue growth from additional volumes and new business, particularly in Japan and China. In Japan, we benefitted from new business in the Technology sector that was gained in the second half of 2013. Revenue growth in Australia, which stemmed primarily from the Life Sciences&Healthcare sector, was offset by a negative currency effect.
In Europe, volumes in the Automotive sector increased on account of higher end-customer demand. Revenue in the Life Sciences&Healthcare sector improved due to additional business with the UK National Health Service.
Williams Lea revenue increased by 5.4% in the reporting period to €331 million, driven mainly by increased retail banking business, higher volumes in the public sector and the ramp-up of new Marketing Solutions sourcing business in Asia.
In the first quarter of 2014, the Supply Chain business unit concluded additional contracts worth around €175 million in annualised revenue with both new and existing customers. The Consumer, Retail, Life Sciences&Healthcare and Automotive sectors accounted for the majority of the gains. The slower start to new business gained in the reporting period reflected the high level of signings achieved at the end of 2013. The annualised contract renewal rate remained at a consistently high level.
EBIT in the division was €84 million in the first quarter of 2014 (previous year: €83 million). The previous year included charges associated with the Chapter 11 insolvency filing of a major Williams Lea customer based in the United States. In the reporting period we also bore additional start-up costs in the Americas and Asia Pacific regions, related to the higher level of new contract signings in the previous year. EBIT was also dampened by negative currency effects in the reporting period. The return on sales was 2.4% (previous year: 2.4%). Operating cash flow was €28 million (previous year: €77 million).
1 Rebased to the closing price of Deutsche Post shares on 31 December 2013.
The DAX proved to be volatile in the first quarter of 2014. After having reached a new high of 9,743 points on 17 January, its subsequent performance varied. Political turmoil in Ukraine sent the markets into a tailspin at the start of March – a trend to which Deutsche Post shares were not immune despite the solid figures for 2013 that we published on 12 March. The low was reached on 13 March as our shares closed at €24.78 and the DAX at 9,018 points. Encouraging economic data at the end of the quarter boosted our shares to another high of €27.55 on 28 March. They ended the quarter at €26.97, representing a slight gain of 1.8% on the DAX, which closed nearly unchanged at 9,556 points.
Post-Balance-Sheet Date Events
| 31 Dec. 2013 | 31 March 2014 | ||
|---|---|---|---|
| Closing price | € | 26.50 | 26.97 |
| High1 | € | 26.71 | 27.55 |
| Low1 | € | 16.51 | 24.78 |
| Number of shares2 | millions | 1,209.0 | 1,209.0 |
| Market capitalisation | €m | 32,039 | 32,607 |
| Average trading volume per day1 | shares | 4,114,460 | 4,112,450 |
1 In 2013 and first quarter of 2014. 2 Number of shares outstanding.
| 31 Dec. 2013 | 31 March 2014 | +/– % | 31 March 2013 | 31 March 2014 | +/– % | ||
|---|---|---|---|---|---|---|---|
| Deutsche Post DHL | EUR | 26.50 | 26.97 | 1.8 | 17.98 | 26.97 | 50.0 |
| PostNL | EUR | 4.15 | 3.31 | –20.2 | 1.56 | 3.31 | 112.2 |
| TNT Express | EUR | 6.75 | 7.13 | 5.6 | 5.72 | 7.13 | 24.7 |
| FedEx | USD | 143.77 | 132.56 | –7.8 | 98.20 | 132.56 | 35.0 |
| UPS | USD | 105.08 | 97.38 | –7.3 | 85.90 | 97.38 | 13.4 |
| Kuehne + Nagel | CHF | 117.10 | 123.70 | 5.6 | 103.50 | 123.70 | 19.5 |
The average number of employees (full-time equivalents) increased slightly to 436,974 in the first three months of 2014, a 0.4% rise compared with the previous year's average. Increases were again mostly in the SUPPLY CHAIN division.
Our current planning foresees another slight increase in the number of employees in financial year 2014.
There were no significant events with material effects on the Group's net assets, financial position and results of operations after the reporting date.
Overall Board of Management assessment of the opportunity and risk situation Opportunity and risk management Opportunities Risks
Identifying opportunities and risks – and swiftly capitalising upon or counteracting them – is an important objective for our Group. We already account for the anticipated impact of potential events and developments in our business plan. Significant potential deviations from the Group's projected earnings are reported as opportunities and risks. The Group's overall opportunity and risk situation has not changed significantly in the reporting period as compared with the situation portrayed in the 2013 Annual Report. No new risks have been identified that could have a significant impact on the Group's result. Based upon the Group's early warning system and in the estimation of its Board of Management, there were no identifiable risks for the Group in the current forecast period which, individually or collectively, cast doubt upon the Group's ability to continue as a going concern. Nor are any such risks apparent in the foreseeable future.
As an internationally operating logistics company, we are faced with numerous changes. Our aim is to identify the resulting opportunities and risks at an early stage and take the necessary measures in the specific areas affected in due time to ensure that we achieve a sustained increase in enterprise value. Our Group-wide opportunity and risk management system facilitates this aim. We describe our opportunity and risk management and the significant opportunities and risks in the forecast period in the 2013 Annual Report beginning on page 88.
In the first three months of 2014, the opportunity situation did not change significantly from that portrayed in the 2013 Annual Report beginning on page 92.
In the first three months of 2014, the risk situation did not change significantly from that portrayed in the 2013 Annual Report beginning on page 94.
Expected Developments Interim Group Management Report Overall Board of Management assessment of the future economic position Forecast period Future organisation Future economic parameters
The Board of Management continues to expect consolidated EBIT to reach between €2.9 billion and €3.1 billion in financial year 2014 and world economic growth to be slightly above the previous year at best. A similar development is expected for world trade. The Post - eCommerce - Parcel division is likely to contribute around €1.2 billion to consolidated EBIT. Compared with the previous year, we expect an additional improvement in overall earnings to between €2.1 billion and €2.3 billion in the DHL divisions. The Corporate Center/Other result should be better than €–0.4 billion. We expect to see further positive development in EBIT after asset charge and operating cash flow, in line with the EBIT trend.
The information contained in the report on expected developments generally refers to financial year 2014. However, in some instances we have chosen to extend the scope.
Currently, no further material changes to the Group's organisational structure are planned for the current financial year.
Economists predict that the global economy will strengthen somewhat over the course of 2014. In the industrial countries, expansive monetary policy is driving the economic upturn. In addition, fiscal consolidation pressure has abated. The emerging economies with strong export sectors are also expected to benefit from the upswing in the industrial countries, although structural problems in combination with political unrest in some countries could lessen this effect markedly. The International Monetary Fund (IMF) expects global economic output to grow by 3.6% and global trade by 4.3% in 2014.
GDP in China is expected to grow more slowly in 2014 than in the previous year, due in part to the slow start to the year (IMF: 7.5%; Bloomberg Consensus: 7.4%). In Japan, the VAT increase is likely to put the brakes on consumer spending temporarily. As such, GDP growth can, on the whole, be expected to remain approximately at the level of the prior year (IMF: 1.4%; Bloomberg Consensus: 1.4%; Global Insight: 1.8%).
In the United States, the broad-based economy is likely to accelerate GDP growth considerably in 2014 (IMF: 2.8%; Bloomberg Consensus: 2.7%; Global Insight: 2.5%).
In the euro zone, the economy is forecast to continue its gradual recovery with slow but steady improvements within the global environment boosting exports in particular. Overall, GDP growth is expected to be moderate for the year as a whole (IMF: 1.2%; ECB: 1.2%; Global Insight: 1.1%).
Early indicators such as the German Ifo Business Climate Index suggest that the upswing in Germany will gain momentum over the course of the year. Exports are on the rise and companies are upping their capital expenditure. This is likely to result in lower unemployment, higher incomes and a rise in consumer spending. GDP growth is therefore forecast to accelerate significantly (IMF: 1.7%; Sachverständigenrat: 1.9%; Global Insight: 2.1%).
As described on page 104f. of our 2013 Annual Report, we expect slight economic expansion at best in 2014. The global trading volumes relevant to our business are expected to perform similarly. We are therefore anticipating a corresponding revenue trend, with increasing revenue, particularly in the DHL divisions.
Against this backdrop, we continue to expect consolidated EBIT to reach between €2.9 billion and €3.1 billion in financial year 2014. The Post - eCommerce - Parcel (PeP) division is likely to contribute around €1.2 billion to this figure. Compared with the previous year, we expect an additional improvement in overall earnings to between €2.1 billion and €2.3 billion in the DHL divisions. The Corporate Center/Other result should be better than €–0.4 billion.
In line with our Group strategy, we are targeting organic growth and anticipate only a few small acquisitions in 2014, as in the previous year.
We still intend to achieve the goals we set for the year 2015. Due to the allocation of parts of the parcel business outside Germany to the PeP division which took effect on 1 January 2014, we expect the PeP division to contribute at least €1.1 billion and the DHL divisions to contribute between €2.6 billion and €2.8 billion to earnings in 2015.
Our finance strategy calls for a payout of 40% to 60% of net profits as dividends as a general rule. At the Annual General Meeting on 27 May 2014, we intend to propose to the shareholders that a dividend per share of €0.80 be paid for financial year 2013 (previous year: €0.70).
In light of the earnings forecast for 2014, we expect the FFO to debt performance metric to remain stable on the whole and the rating agencies to rank our creditworthiness as adequate or even better.
Given that we shall be paying our shareholders the dividend for financial year 2013 on 28 May 2014, our liquidity will decrease in the second quarter of 2014. However, our operating liquidity situation will improve again towards the end of the year due to the upturn in business that is normal in the second half.
As described on page 105 of our 2013 Annual Report, capital expenditure of around €1.9 billion is planned for 2014. We shall continue to focus on IT, machinery and aircraft.
We continue to expect a further positive development in our EBIT after asset charge and operating cash flow performance metrics in financial year 2014, in line with the respective EBIT trend. Here, the continuing rise in business volume may result in an increase in working capital within the individual divisions.
This Interim Report contains forward-looking statements that relate to the business, financial performance and results of operations of Deutsche Post AG. Forward-looking statements are not historical facts and may be identified by words such as "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets" and similar expressions. As these statements are based upon current plans, estimates and projections, they are subject to risks and uncertainties that could cause actual results to be materially different from the future development, performance or results expressly or implicitly assumed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as at the date of this presentation. Deutsche Post AG does not intend or assume any obligation to update these forwardlooking statements to reflect events or circumstances after the date of this Interim Report.
Any internet sites referred to in the Interim Report by the Board of Management do not form part of the report.
| €m | 2013 | 2014 |
|---|---|---|
| adjusted1 | ||
| Revenue | 13,403 | 13,569 |
| Other operating income | 440 | 389 |
| Total operating income | 13,843 | 13,958 |
| Materials expense | –7,478 | –7,529 |
| Staff costs | – 4,454 | – 4,537 |
| Depreciation, amortisation and impairment losses | –320 | –321 |
| Other operating expenses | – 881 | – 845 |
| Total operating expenses | –13,133 | –13,232 |
| Profit from operating activities (EBIT) | 710 | 726 |
| Net income from investments accounted for using the equity method | 1 | 1 |
| Other financial income | 73 | 25 |
| Other finance costs | –107 | –101 |
| Foreign currency result | –10 | – 4 |
| Net other finance costs | – 44 | – 80 |
| Net finance costs | – 43 | –79 |
| Profit before income taxes | 667 | 647 |
| Income taxes | –147 | –123 |
| Consolidated net profit for the period | 520 | 524 |
| attributable to Deutsche Post AG shareholders | 498 | 502 |
| attributable to non-controlling interests | 22 | 22 |
| Basic earnings per share (€) | 0.41 | 0.42 |
| Diluted earnings per share (€) | 0.40 | 0.40 |
| 1 Note 4. |
1 January to 31 March
| €m | 2013 | 2014 |
|---|---|---|
| adjusted1 | ||
| Consolidated net profit for the period | 520 | 524 |
| Items that will not be reclassified to profit or loss | ||
| Change due to remeasurements of net pension provisions | –316 | – 517 |
| IFRS 3 revaluation reserve | 0 | 0 |
| Other changes in retained earnings | 0 | 0 |
| Income taxes relating to components of other comprehensive income | 33 | 48 |
| Share of other comprehensive income of investments accounted for using the equity method (after tax) | 0 | 0 |
| Total (after tax) | –283 | – 469 |
| Items that may be subsequently reclassified to profit or loss | ||
| IAS 39 revaluation reserve | ||
| Changes from unrealised gains and losses | 9 | 18 |
| Changes from realised gains and losses | 0 | 0 |
| IAS 39 hedging reserve | ||
| Changes from unrealised gains and losses | –2 | –12 |
| Changes from realised gains and losses | –7 | –17 |
| Currency translation reserve | ||
| Changes from unrealised gains and losses | 24 | – 9 |
| Changes from realised gains and losses | 0 | 0 |
| Income taxes relating to components of other comprehensive income | 3 | 8 |
| Share of other comprehensive income of investments accounted for using the equity method (after tax) | 0 | 0 |
| Total (after tax) | 27 | –12 |
| Other comprehensive income (after tax) | –256 | – 481 |
| Total comprehensive income | 264 | 43 |
| attributable to Deutsche Post AG shareholders | 235 | 24 |
| attributable to non-controlling interests | 29 | 19 |
| €m | 1 Jan. 2013 adjusted1 |
31 Dec. 2013 adjusted1 |
31 March 2014 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | 12,146 | 11,832 | 11,797 |
| Property, plant and equipment | 6,652 | 6,800 | 6,648 |
| Investment property | 43 | 33 | 31 |
| Investments accounted for using the equity method | 66 | 68 | 68 |
| Non-current financial assets | 1,038 | 1,123 | 1,169 |
| Other non-current assets | 301 | 187 | 155 |
| Deferred tax assets | 1,328 | 1,327 | 1,366 |
| Non-current assets | 21,574 | 21,370 | 21,234 |
| Inventories | 321 | 402 | 397 |
| Current financial assets | 252 | 821 | 365 |
| Trade receivables | 6,940 | 7,022 | 7,165 |
| Other current assets | 2,155 | 2,223 | 2,883 |
| Income tax assets | 127 | 167 | 175 |
| Cash and cash equivalents | 2,395 | 3,414 | 2,570 |
| Assets held for sale | 76 | 42 | 38 |
| Current assets | 12,266 | 14,091 | 13,593 |
| Total ASSETS | 33,840 | 35,461 | 34,827 |
| EQUITY AND LIABILITIES | |||
| Issued capital | 1,209 | 1,209 | 1,209 |
| Capital reserves | 2,254 | 2,269 | 2,309 |
| Other reserves | – 474 | – 817 | – 826 |
| Retained earnings | 6,017 | 7,183 | 7,200 |
| Equity attributable to Deutsche Post AG shareholders | 9,006 | 9,844 | 9,892 |
| Non-controlling interests | 207 | 190 | 208 |
| Equity | 9,213 | 10,034 | 10,100 |
| Provisions for pensions and similar obligations | 5,216 | 5,016 | 5,470 |
| Deferred tax liabilities | 156 | 124 | 91 |
| Other non-current provisions | 1,954 | 1,589 | 1,602 |
| Non-current provisions | 7,326 | 6,729 | 7,163 |
| Non-current financial liabilities | 4,421 | 4,619 | 4,645 |
| Other non-current liabilities | 276 | 227 | 267 |
| Non-current liabilities | 4,697 | 4,846 | 4,912 |
| Non-current provisions and liabilities | 12,023 | 11,575 | 12,075 |
| Current provisions | 1,667 | 1,752 | 1,677 |
| Current financial liabilities | 410 | 1,335 | 449 |
| Trade payables | 5,960 | 6,358 | 5,554 |
| Other current liabilities | 4,003 | 3,978 | 4,520 |
| Income tax liabilities | 534 | 429 | 452 |
| Liabilities associated with assets held for sale | 30 | 0 | 0 |
| Current liabilities | 10,937 | 12,100 | 10,975 |
| Current provisions and liabilities | 12,604 | 13,852 | 12,652 |
| Total EQUITY AND LIABILITIES | 33,840 | 35,461 | 34,827 |
| €m | 2013 adjusted1 |
2014 |
|---|---|---|
| Consolidated net profit for the period attributable to Deutsche Post AG shareholders | 498 | 502 |
| Consolidated net profit for the period attributable to non-controlling interests | 22 | 22 |
| Income taxes | 147 | 123 |
| Net other finance costs | 44 | 80 |
| Net income from investments accounted for using the equity method | –1 | –1 |
| Profit from operating activities (EBIT) | 710 | 726 |
| Depreciation, amortisation and impairment losses | 320 | 321 |
| Net income from disposal of non-current assets | –18 | – 9 |
| Non-cash income and expense | – 4 | 15 |
| Change in provisions | –165 | –147 |
| Change in other non-current assets and liabilities | – 4 | 13 |
| Income taxes paid | –142 | –126 |
| Net cash from operating activities before changes in working capital | 697 | 793 |
| Changes in working capital | ||
| Inventories | 2 | 5 |
| Receivables and other current assets | –709 | – 824 |
| Liabilities and other items | 131 | 109 |
| Net cash from operating activities | 121 | 83 |
| Subsidiaries and other business units | 17 | 0 |
| Property, plant and equipment and intangible assets | 47 | 47 |
| Other non-current financial assets | 2 | 16 |
| Proceeds from disposal of non-current assets | 66 | 63 |
| Subsidiaries and other business units | 1 | 0 |
| Property, plant and equipment and intangible assets | –291 | – 448 |
| Other non-current financial assets | –23 | – 40 |
| Cash paid to acquire non-current assets | –313 | – 488 |
| Interest received | 18 | 17 |
| Dividend received | 0 | 1 |
| Current financial assets | – 5 | 403 |
| Net cash used in investing activities | –234 | – 4 |
| Proceeds from issuance of non-current financial liabilities | 2 | 8 |
| Repayments of non-current financial liabilities | –21 | – 934 |
| Change in current financial liabilities | 320 | 43 |
| Other financing activities | 12 | 20 |
| Proceeds from transactions with non-controlling interests | 0 | 0 |
| Cash paid for transactions with non-controlling interests | 0 | 0 |
| Dividend paid to Deutsche Post AG shareholders | 0 | 0 |
| Dividend paid to non-controlling interest holders | –1 | –3 |
| Purchase of treasury shares | –23 | –17 |
| Proceeds from issuing shares or other equity instruments | 0 | 17 |
| Interest paid | – 49 | – 48 |
| Net cash from/used in financing activities | 240 | – 914 |
| Net change in cash and cash equivalents | 127 | – 835 |
| Effect of changes in exchange rates on cash and cash equivalents | –1 | – 9 |
| Changes in cash and cash equivalents associated with assets held for sale | –23 | 0 |
| Changes in cash and cash equivalents due to changes in consolidated group | 0 | 0 |
| Cash and cash equivalents at beginning of reporting period | 2,395 | 3,414 |
| Cash and cash equivalents at end of reporting period | 2,498 | 2,570 |
| €m | Other reserves | Equity | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Issued capital |
Capital reserves |
IFRS 3 revaluation reserve |
IAS 39 revaluation reserve |
IAS 39 hedging reserve |
Currency translation reserve |
Retained earnings |
attributable to Deutsche Post AG shareholders |
Non controlling interests |
Total equity | |
| Balance at 1 January 2013 | 1,209 | 2,254 | 3 | –1 | –7 | – 470 | 6,031 | 9,019 | 209 | 9,228 |
| Adjustment1 | 0 | 0 | 0 | 0 | 0 | 1 | –14 | –13 | –2 | –15 |
| Balance at 1 January 2013, adjusted | 1,209 | 2,254 | 3 | –1 | –7 | – 469 | 6,017 | 9,006 | 207 | 9,213 |
| Capital transactions with owner | ||||||||||
| Dividend | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | –1 | –1 |
| Transactions with non-controlling interests |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Changes in non-controlling interests due to changes in consolidated group |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 |
| Issue of shares or other equity instruments |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Purchase of treasury shares | –1 | 0 | 0 | 0 | 0 | 0 | –21 | –22 | 0 | –22 |
| Share Matching Scheme (issuance) | 0 | 18 | 0 | 0 | 0 | 0 | 0 | 18 | 0 | 18 |
| Share Matching Scheme (exercise) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| – 4 | 0 | – 4 | ||||||||
| Total comprehensive income Consolidated net profit for the period |
0 | 0 | 0 | 0 | 0 | 0 | 498 | 498 | 22 | 520 |
| Currency translation differences | 0 | 0 | 0 | 0 | 0 | 18 | 0 | 18 | 6 | 24 |
| Change due to remeasurements of net pension provisions |
0 | 0 | 0 | 0 | 0 | 0 | –284 | –284 | 1 | –283 |
| Other changes | 0 | 0 | 0 | 9 | – 6 | 0 | 0 | 3 | 0 | 3 |
| 235 | 29 | 264 | ||||||||
| Balance at 31 March 2013 | 1,208 | 2,272 | 3 | 8 | –13 | – 451 | 6,210 | 9,237 | 236 | 9,473 |
| Balance at 1 January 2014 | 1,209 | 2,269 | 2 | 68 | 37 | – 926 | 7,198 | 9,857 | 191 | 10,048 |
| Adjustment1 | 0 | 0 | 0 | 0 | 0 | 2 | –15 | –13 | –1 | –14 |
| Balance at 1 January 2014, adjusted | 1,209 | 2,269 | 2 | 68 | 37 | – 924 | 7,183 | 9,844 | 190 | 10,034 |
| Capital transactions with owner | ||||||||||
| Dividend | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | –3 | –3 |
| Transactions with non-controlling interests |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Changes in non-controlling interests due to changes in consolidated group |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Issue of shares or other equity instruments |
1 | 16 | 0 | 0 | 0 | 0 | 0 | 17 | 2 | 19 |
| Purchase of treasury shares | –1 | 0 | 0 | 0 | 0 | 0 | –16 | –17 | 0 | –17 |
| Share Matching Scheme (issuance) | 0 | 24 | 0 | 0 | 0 | 0 | 0 | 24 | 0 | 24 |
| Share Matching Scheme (exercise) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 24 |
0 –1 |
0 23 |
| Total comprehensive income | ||||||||||
| Consolidated net profit for the period | 0 | 0 | 0 | 0 | 0 | 0 | 502 | 502 | 22 | 524 |
| Currency translation differences | 0 | 0 | 0 | 0 | 0 | – 6 | 0 | – 6 | –3 | – 9 |
| Change due to remeasurements | ||||||||||
| of net pension provisions | 0 | 0 | 0 | 0 | 0 | 0 | – 469 | – 469 | 0 | – 469 |
| Other changes | 0 | 0 | 0 | 18 | –21 | 0 | 0 | –3 24 |
0 19 |
–3 43 |
| Balance at 31 March 2014 | 1,209 | 2,309 | 2 | 86 | 16 | – 930 | 7,200 | 9,892 | 208 | 10,100 |
Deutsche Post AG is a listed corporation domiciled in Bonn, Germany. The condensed consolidated interim financial statements of Deutsche Post AG and its subsidiaries cover the period from 1 January to 31 March 2014 and have been reviewed.
The accompanying condensed consolidated interim financial statements as at 31 March 2014 were prepared in accordance with the International Financial Reporting Standards (IFRSs) and related interpretations issued by the International Accounting Standards Board (IASB) for interim financial reporting, as adopted by the European Union. These interim financial statements thus include all information and disclosures required by IFRSs to be presented in condensed interim financial statements.
Preparation of the condensed consolidated interim financial statements for interim financial reporting in accordance with IAS 34 requires the Board of Management to exercise judgement and make estimates and assumptions that affect the application of accounting policies in the Group and the presentation of assets, liabilities, income and expenses. Actual amounts may differ from these estimates. The results obtained thus far in financial year 2014 are not necessarily an indication of how business will develop in the future.
The income tax expense for the reporting period was deferred on the basis of the tax rate expected to apply to the full financial year.
The accounting policies applied to the condensed consolidated interim financial statements are generally based on the same accounting policies used in the consolidated financial statements for financial year 2013. For further information on the accounting policies applied, please refer to the consolidated financial statements for the year ended 31 December 2013, on which these interim financial statements are based.
Departures from the accounting policies applied in financial year 2013 consist of the new or amended international accounting pronouncements under IFRSs required to be applied since financial year 2014.
These amendments have provided clarification on the conditions for offsetting financial assets and liabilities in the balance sheet. They have no significant effect on the presentation of the financial statements. In individual cases, additional disclosures are required.
This new standard introduces a uniform definition of control for all entities that are to be included in the consolidated financial statements. IFRS 10 supersedes IAS 27 (Consolidated and Separate Financial Statements) and SIC-12 (Consolidation – Special Purpose Entities). Special purpose entities previously consolidated in accordance with SIC-12 are now subject to IFRS 10. Application of the standard only resulted in insignificant changes regarding the method of consolidation; Note 2 "Consolidated group" and Note 4 "Adjustment of prior-period amounts".
IFRS 11 supersedes IAS 31 (Interests in Joint Ventures) and abolishes the option to proportionately consolidate joint ventures. However, IFRS 11 will not require all entities that were previously subject to proportionate consolidation to be accounted for using the equity method. IFRS 11 provides a uniform definition of the term "joint arrangements" and distinguishes between joint operations and joint ventures. The interest in a joint operation is recognised on the basis of direct rights and obligations, whereas the interest in the profit or loss of a joint venture must be accounted for using the equity method. Application of the equity method to joint ventures will follow the requirements of the revised IAS 28 (Investments in Associates and Joint Ventures). The application of IFRS 11 only resulted in insignificant changes for the consolidated financial statements; Note 2 "Consolidated group" and Note 4 "Adjustment of prior-period amounts".
IFRS 12 combines the disclosure requirements for all interests in subsidiaries, joint ventures, associates and unconsolidated structured entities into a single standard. An entity is required to provide quantitative and qualitative disclosures about the types of risks and financial effects associated with the entity's interests in other entities. The disclosures required by IFRS 12 will be presented in the Notes to the consolidated financial statements for the year ending on 31 December 2014.
The existing standard IAS 27 (Consolidated and Separate Financial Statements) was revised in conjunction with the new standards IFRS 10, IFRS 11 and IFRS 12 and renamed IAS 27 (Separate Financial Statements) (revised 2011). The revised standard now only contains requirements applicable to separate financial statements. The amendment does not affect the financial statements.
The existing standard IAS 28 (Investments in Associates) was revised by the standards IFRS 10, IFRS 11 and IFRS 12 and renamed IAS 28 (Investments in Associates and Joint Ventures) (revised 2011). Its scope was extended to include accounting for joint ventures using the equity method. The previous requirements of SIC-13 (Jointly Controlled Entities – Non-Monetary Contributions by Venturers) are being incorporated into IAS 28. The amendment has no significant effect on the financial statements.
These amendments clarify that disclosures regarding the recoverable amount of non-financial assets are only required if an impairment loss has been recognised or reversed in the current reporting period. In addition, the disclosures required when the recoverable amount is determined based on fair value less costs of disposal have been amended. The standard was applied early in financial year 2013.
Under this amendment, subject to certain conditions, novation of a hedging instrument to a central counterparty as a consequence of laws or regulations does not give rise to termination of a hedging relationship. The amendment has no significant effect on the presentation of the financial statements.
Detailed explanations on the newly applicable accounting standards can be found in the 2013 Annual Report, Note 5 "New developments in international accounting under IFRSs".
The consolidated group includes all companies controlled by Deutsche Post AG. Control exists if Deutsche Post AG has decisionmaking powers, is exposed to, and has rights to, variable returns, and is able to use its decision-making powers to affect the amount of the variable returns.
The changes in the method of consolidation resulting from the application of IFRSs 10 and 11 have no significant effects on the Group's net assets, financial position and results of operations. The prior-period amounts have been adjusted accordingly. The relevant information can be found in Note 4 "Adjustment of prior-period amounts".
The Group companies are consolidated from the date on which Deutsche Post DHL is able to exercise control.
The companies listed in the table below are consolidated in addition to the parent company Deutsche Post AG.
| 31 Dec. 2013 | Adjustments1 | 31 Dec. 2013 adjusted |
31 March 2014 | |
|---|---|---|---|---|
| Number of fully consolidated companies (subsidiaries) | ||||
| German | 88 | –1 | 87 | 87 |
| Foreign | 707 | – 5 | 702 | 697 |
| Number of proportionately consolidated joint ventures | ||||
| German | 1 | –1 | 0 | 0 |
| Foreign | 3 | –3 | 0 | 0 |
| Number of joint operations | ||||
| German | 0 | 1 | 1 | 1 |
| Foreign | 0 | 1 | 1 | 1 |
| Number of investments accounted for using the equity method | ||||
| German | 0 | 1 | 1 | 1 |
| Foreign | 8 | 7 | 15 | 15 |
1 Adjustments Note 4.
There were no acquisitions in the first quarter of 2014. Payments were made for companies acquired in previous years, which amounted to less than €1 million.
Acquisitions, 2013
| Name | Country | Segment | Equity interest % |
Date of acquisition |
|---|---|---|---|---|
| Compador | ||||
| Technologies | 15 January | |||
| GmbH, Berlin | Germany | PeP1 | 49 | 2013 |
1 Post - eCommerce - Parcel, previously the MAIL segment.
In January 2013, Deutsche Post DHL acquired 49% of the shares of Compador Technologies GmbH (Compador), Berlin, which specialises in the development and manufacture of sorting machines and software solutions. The company is consolidated because of existing potential voting rights.
| €m | Carrying | ||
|---|---|---|---|
| 1 January to 31 March | amount | Adjustment | Fair value |
| ASSETS | |||
| Non-current assets | 1 | – | 1 |
| Current assets | 1 | – | 1 |
| Cash and cash equivalents | 1 | – | 1 |
| 3 | – | 3 | |
| EQUITY AND LIABILITIES | |||
| Current liabilities and provisions | 1 | – | 1 |
| 1 | – | 1 | |
| Net assets | 2 | ||
The calculation of goodwill is presented in the following table:
| €m | |
|---|---|
| Fair value | |
| Cost | 5 |
| Less net assets | 2 |
| Difference | 3 |
| Plus non-controlling interests1 | 1 |
| Goodwill | 4 |
1 Non-controlling interests are recognised at their carrying amounts.
The company's contribution to consolidated revenue and consolidated EBIT was insignificant. No purchase price was paid for Compador in the first quarter of 2013. €0.4 million was paid for companies acquired in previous years.
Variable purchase prices, which are presented in the following table, were agreed for the acquisitions in previous financial years:
| Period for | Remaining payment |
Remaining payment |
|||
|---|---|---|---|---|---|
| financial | Results | Fair value | obligation | obligation | |
| years | range | of total | at | at 31 March | |
| Basis | from/to | from/to | obligation | 31 Dec. 2013 | 2014 |
| Revenue and EBITDA1 |
2011 to 2013 |
€0 to €3 million |
€0 million | €1 million | €0 million |
| Revenue and sales margin |
2012 to 2014 |
€0 to €9 million |
€3 million | €1 million | €1 million |
1 Change in the fair value of the total and remaining payment obligation due to differences between actual and estimated amounts.
There were no disposal and deconsolidation effects in the first quarter of 2014.
The sale of the Romanian domestic express business of Cargus International S.R.L. was completed in the first quarter of 2013. Previously, the assets and liabilities of the business concerned were reclassified as held for sale in accordance with IFRS 5. The most recent measurement of the assets prior to their reclassification did not indicate any impairment.
| €m | Cargus |
|---|---|
| 1 January to 31 March | International |
| Non-current assets | 6 |
| Current assets | 3 |
| Cash and cash equivalents | 2 |
| ASSETS | 11 |
| Current provisions and liabilities | 4 |
| EQUITY AND LIABILITIES | 4 |
| Net assets | 7 |
| Total consideration received | 19 |
| Deconsolidation gain | 12 |
The gain is reported under other operating income.
Deutsche Post AG increased its capital in March 2014 by issuing new shares. The same number of shares was then repurchased from the market to service the share-based payment system; Note 14.
There were no other significant transactions to report in the first quarter of 2014.
As the amended IFRSs 10 and 11 came into force on 1 January 2014 and were applied retrospectively, the prior-period amounts of the relevant balance sheet and income statement items were adjusted accordingly. During this transition process, further insignificant adjustments were made to the inclusion method and the equity interest included.
The investments in associates balance sheet item was renamed investments accounted for using the equity method as it now also includes the joint ventures to be accounted for using equity accounting. Accordingly, the net income from associates item in the income statement was changed to net income from investments accounted for using the equity method.
Details on the adjustment of prior-period amounts in the segment reporting can be found in Note 16. They relate exclusively to reallocations between the segments. The reclassification had no effect on the consolidated amounts.
| €m | 1 Jan. 2013 | Adjustment | 1 Jan. 2013 adjusted |
31 Dec. 2013 | Adjustment | 31 Dec. 2013 adjusted |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Intangible assets | 12,151 | – 5 | 12,146 | 11,836 | – 4 | 11,832 |
| Property, plant and equipment | 6,663 | –11 | 6,652 | 6,814 | –14 | 6,800 |
| Investments in associates | 46 | – 46 | – | 48 | – 48 | – |
| Investments accounted for using the equity method | – | 66 | 66 | – | 68 | 68 |
| Non-current financial assets | 1,039 | –1 | 1,038 | 1,124 | –1 | 1,123 |
| Other non-current assets | 298 | 3 | 301 | 184 | 3 | 187 |
| Inventories | 322 | –1 | 321 | 403 | –1 | 402 |
| Trade receivables | 6,959 | –19 | 6,940 | 7,040 | –18 | 7,022 |
| Other current assets | 2,153 | 2 | 2,155 | 2,221 | 2 | 2,223 |
| Income tax assets | 127 | 0 | 127 | 168 | –1 | 167 |
| Cash and cash equivalents | 2,400 | – 5 | 2,395 | 3,417 | –3 | 3,414 |
| Total ASSETS | 33,857 | –17 | 33,840 | 35,478 | –17 | 35,461 |
| EQUITY AND LIABILITIES | ||||||
| Other reserves | – 475 | 1 | – 474 | – 819 | 2 | – 817 |
| Retained earnings | 6,031 | –14 | 6,017 | 7,198 | –15 | 7,183 |
| Non-controlling interests | 209 | –2 | 207 | 191 | –1 | 190 |
| Provisions for pensions and similar obligations | 5,216 | 0 | 5,216 | 5,017 | –1 | 5,016 |
| Other non-current provisions | 1,943 | 11 | 1,954 | 1,574 | 15 | 1,589 |
| Non-current financial liabilities | 4,413 | 8 | 4,421 | 4,612 | 7 | 4,619 |
| Current provisions | 1,663 | 4 | 1,667 | 1,745 | 7 | 1,752 |
| Current financial liabilities | 403 | 7 | 410 | 1,328 | 7 | 1,335 |
| Trade payables | 5,991 | –31 | 5,960 | 6,392 | –34 | 6,358 |
| Other current liabilities | 4,004 | –1 | 4,003 | 3,981 | –3 | 3,978 |
| Income tax liabilities | 534 | 0 | 534 | 430 | –1 | 429 |
| Total EQUITY AND LIABILITIES | 33,857 | –17 | 33,840 | 35,478 | –17 | 35,461 |
| €m | Q1 2013 | Adjustment | Q1 2013 adjusted |
|---|---|---|---|
| Revenue | 13,444 | – 41 | 13,403 |
| Materials expense | –7,518 | 40 | –7,478 |
| Staff costs | – 4,456 | 2 | – 4,454 |
| Depreciation, amortisation and impairment losses |
–321 | 1 | –320 |
| Other operating expenses | – 878 | –3 | – 881 |
| Profit from operating activities (EBIT) | 711 | –1 | 710 |
| Net income from associates | 0 | – | – |
| Net income from investments accounted for using the equity |
|||
| method | – | 1 | 1 |
| Net finance costs | – 44 | 1 | – 43 |
| Consolidated net profit for the period | 520 | 0 | 520 |
| €m | ||
|---|---|---|
| Q1 2013 | Q1 2014 | |
| Insurance income | 49 | 48 |
| Income from the reversal of provisions | 46 | 36 |
| Rental and lease income | 33 | 32 |
| Income from fees and reimbursements | 29 | 32 |
| Reversals of impairment losses on receivables and other assets |
23 | 32 |
| Income from currency translation differences | 41 | 24 |
| Income from derivatives | 9 | 23 |
| Gains on disposal of non-current assets | 25 | 20 |
| Commission income | 17 | 19 |
| Income from work performed and capitalised | 17 | 12 |
| Income from the remeasurement of liabilities | 17 | 11 |
| Income from prior-period billings | 27 | 9 |
| Income from loss compensation | 6 | 6 |
| Income from the derecognition of liabilities | 6 | 4 |
| Recoveries on receivables previously written off | 2 | 2 |
| Subsidies | 2 | 2 |
| Miscellaneous | 91 | 77 |
| Total | 440 | 389 |
Miscellaneous other operating income includes a large number of smaller individual items.
| €m | ||
|---|---|---|
| Q1 20131 | Q1 2014 | |
| Depreciation, amortisation and impairment losses | 320 | 321 |
1 Prior-period amounts adjusted Note 4.
As in the prior-year period, no impairment losses were charged.
| €m | ||
|---|---|---|
| Q1 20131 | Q1 2014 | |
| Cost of purchased cleaning, transport and security | ||
| services | 80 | 79 |
| Travel and training costs | 72 | 70 |
| Warranty expenses, refunds and compensation payments |
68 | 66 |
| Insurance costs | 71 | 64 |
| Expenses for advertising and public relations | 51 | 61 |
| Other business taxes | 52 | 54 |
| Telecommunication costs | 54 | 52 |
| Write-downs of current assets | 39 | 51 |
| Office supplies | 40 | 42 |
| Expenses from currency translation differences | 39 | 33 |
| Consulting costs (including tax advice) | 40 | 27 |
| Entertainment and corporate hospitality expenses | 27 | 27 |
| Contributions and fees | 22 | 21 |
| Voluntary social benefits | 22 | 20 |
| Services provided by the Bundesanstalt für Post und Telekommunikation (German federal post and |
||
| telecommunications agency) | 18 | 19 |
| Customs clearance-related charges | 17 | 19 |
| Commissions paid | 17 | 16 |
| Losses on disposal of assets | 5 | 11 |
| Legal costs | 15 | 10 |
| Monetary transaction costs | 10 | 9 |
| Expenses from derivatives | 5 | 7 |
| Audit costs | 6 | 6 |
| Donations | 5 | 6 |
| Prior-period other operating expenses | 8 | 4 |
| Miscellaneous | 98 | 71 |
| Total | 881 | 845 |
1 Prior-period amounts adjusted Note 4.
Miscellaneous other operating expenses include a large number of smaller individual items.
| €m | ||
|---|---|---|
| Q1 20131 | Q1 2014 | |
| Net income from associates | 1 | 1 |
| Net income from joint ventures | 0 | 0 |
| Net income from investments accounted for using the equity method |
1 | 1 |
1 Prior-period amounts adjusted Note 4.
Investments accounted for using the equity method contributed €1 million (previous year, adjusted: €1 million) to net finance costs.
| €m | ||
|---|---|---|
| Q1 20131 | Q1 2014 | |
| Other financial income | 73 | 25 |
| Other finance costs | –107 | –101 |
| Foreign currency result | –10 | – 4 |
| Net other finance costs | – 44 | – 80 |
1 Prior-period amounts adjusted Note 4.
The €36 million increase in net other finance costs to €80 million is largely due to the inclusion of interest income from the reversal of a provision for interest on tax liabilities in the prioryear figure.
Basic earnings per share in the reporting period were €0.42.
| Basic earnings per share | € | 0.41 | 0.42 |
|---|---|---|---|
| Weighted average number of shares outstanding |
shares | 1,208,594,207 | 1,209,015,874 |
| Consolidated net profit for the period attributable to Deutsche Post AG shareholders |
€m | 498 | 502 |
| Q1 2013 | Q1 2014 |
To compute diluted earnings per share, the average number of shares outstanding is adjusted for the number of all potentially dilutive shares. This item includes the executives' rights to shares under the Share Matching Scheme (as at 31 March 2014: 6,933,483 shares) and the maximum number of ordinary shares that can be issued on exercise of the conversion rights under the convertible bond issued on 6 December 2012. Consolidated net profit for the period attributable to Deutsche Post AG shareholders was increased by the amounts spent for the convertible bond.
Diluted earnings per share in the reporting period were €0.40.
Diluted earnings per share
| Q1 2013 | Q1 2014 | |
|---|---|---|
| €m | 498 | 502 |
| €m | 1 | 1 |
| €m | 01 | 01 |
| 503 | ||
| shares | 1,208,594,207 | 1,209,015,874 |
| shares | 52,051,034 | 52,851,488 |
| shares | 1,260,645,241 | 1,261,867,362 |
| € | 0.40 | 0.40 |
| €m | 499 |
1 Rounded below €1 million.
Investments in intangible assets and property, plant and equipment amounted to €176 million in the period up to 31 March 2014 (previous year, adjusted: €215 million). Of this figure, €34 million (previous year: €35 million) was attributable to intangible assets (not including goodwill). Investments in property, plant and equipment are shown in the following table:
| €m | ||
|---|---|---|
| 31 March 20131 31 March 2014 | ||
| Property, plant and equipment | ||
| Land and buildings (incl. leasehold improvements) | 11 | 9 |
| Technical equipment and machinery | 11 | 10 |
| Transport equipment | 25 | 7 |
| Aircraft | 7 | 5 |
| IT equipment | 12 | 12 |
| Other operating and office equipment | 20 | 10 |
| Advance payments and assets under development | 94 | 89 |
| Total | 180 | 142 |
1 Prior-period amounts adjusted Note 4.
Goodwill changed as follows in the reporting period:
| €m | ||
|---|---|---|
| 20131 | 2014 | |
| Cost | ||
| Balance at 1 January | 12,056 | 11,770 |
| Additions from business combinations | 31 | 0 |
| Additions | 0 | 0 |
| Disposals | –22 | –1 |
| Currency translation differences | –295 | – 6 |
| Balance at 31 December/31 March | 11,770 | 11,763 |
| Depreciation, amortisation and impairment losses | ||
| Balance at 1 January | 1,138 | 1,097 |
| Disposals | – 5 | 0 |
| Currency translation differences | –36 | –2 |
| Balance at 31 December/31 March | 1,097 | 1,095 |
| Carrying amount at 31 December/31 March | 10,673 | 10,668 |
1 Prior-period amounts adjusted Note 4.
The change in goodwill is primarily due to currency translation differences.
| €m | Associates | Joint ventures | Total | |||
|---|---|---|---|---|---|---|
| 20131 | 2014 | 20131 | 2014 | 20131 | 2014 | |
| At 1 January | 60 | 62 | 6 | 6 | 66 | 68 |
| Additions | 0 | 0 | 0 | 0 | 0 | 0 |
| Changes in Group's share of equity | ||||||
| Changes recognised in profit or loss | 5 | 02 | 0 | 0 | 5 | 02 |
| Profit distributions | –2 | 0 | 0 | 0 | –2 | 0 |
| Changes recognised in other comprehensive income | –1 | 0 | 0 | 0 | –1 | 0 |
| Carrying amount at 31 December/31 March | 62 | 62 | 6 | 6 | 68 | 68 |
1 Prior-period amounts adjusted Note 4.
2 Due to rounding.
held for sale
| €m | Assets | Liabilities | ||
|---|---|---|---|---|
| 31 Dec.2013 | 31 March 2014 | 31 Dec.2013 | 31 March 2014 | |
| Deutsche Post DHL Corporate Real Estate Management GmbH & Co. Logistikzentren KG, Germany – | ||||
| real estate (Corporate Center/Other) | 20 | 20 | 0 | 0 |
| Deutsche Post AG – real estate (Corporate Center/Other) | 20 | 15 | 0 | 0 |
| Exel Inc., USA – real estate (SUPPLY CHAIN segment) | 2 | 2 | 0 | 0 |
| Hull Blyth, Angola (GLOBAL FORWARDING, FREIGHT segment) | 0 | 1 | 0 | 0 |
| Assets held for sale and liabilities associated with assets held for sale | 42 | 38 | 0 | 0 |
The company plans to sell a property in Hamburg. The assets and liabilities were reclassified as held for sale in accordance with IFRS 5. The most recent appraisal of the assets prior to reclassification did not result in any impairment.
Deutsche Post AG plans to sell two properties. The most recent appraisal of the assets prior to reclassification did not result in any impairment.
The company plans to sell two commercial buildings and an industrial site in Pennsylvania, USA. The most recent appraisal of the assets prior to reclassification did not result in any impairment.
Hull Blyth plans to sell activities not forming part of their core business including the related non-current assets in the amount of €1 million. The assets were reclassified in accordance with IFRS 5. The most recent measurement prior to reclassification did not result in an impairment loss.
| € | ||
|---|---|---|
| 2013 | 2014 | |
| Balance at 1 January | 1,209,015,874 | 1,209,015,874 |
| Addition due to capital increase | 0 | 656,915 |
| Treasury shares acquired | –1,313,727 | – 656,915 |
| Treasury shares issued | 1,313,727 | 0 |
| Balance at 31 December/31 March | 1,209,015,874 | 1,209,015,874 |
The Board of Management resolved, with the consent of the Supervisory Board, to make partial use of the authorisation granted to it by the Annual General Meeting of 29 May 2013 in accordance with Article 5 (2) of the Articles of Association (Authorised Capital 2013), to increase Deutsche Post AG's share capital by €656,915.00 by issuing 656,915 new no-par value registered shares with a notional interest in the share capital of €1.00 per share in exchange for cash contributions. The capital increase was entered in the commercial register of the Bonn Local Court on 12 March 2014. The shares participate in the consolidated net profit for 2013.
To service the 2009 tranche of the Share Matching Scheme, see also Note 17, the same number of shares was repurchased on the market. The shares were repurchased for a total of €17 million. The average purchase price per share was €25.83.
Treasury shares will be acquired to service the 2013 tranche of the Share Matching Scheme in the second quarter of 2014. Changes in treasury shares are presented in the statement of changes in equity.
Changes in retained earnings are presented in the statement of changes in equity.
| Retained earnings | |
|---|---|
| €m | ||
|---|---|---|
| 20131 | 2014 | |
| Balance at 1 January | 6,017 | 7,183 |
| Dividend payment | – 846 | 0 |
| Consolidated net profit for the period | 2,091 | 502 |
| Change due to remeasurements of net pension | ||
| provisions | –15 | – 469 |
| Transactions with non-controlling interests | – 62 | 0 |
| Miscellaneous other changes | –2 | –16 |
| Balance at 31 December/31 March | 7,183 | 7,200 |
1 Prior-period amounts adjusted Note 4.
The transactions with non-controlling interests reported in the previous year included an option to acquire the remaining 40% interest in Giorgio Gori Group, Italy, and the acquisition of the remaining 49.9% interest in Tradeteam Limited, UK.
| €m | GLOBAL FORWARDING, | Corporate Center/ | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PeP | EXPRESS | FREIGHT | SUPPLY CHAIN | Other | Consolidation | Group | ||||||||
| 1 Jan. to 31 March | 20131 | 2014 | 20131 | 2014 | 20131 | 2014 | 20131 | 2014 | 2013 | 2014 | 20131 | 2014 | 20131 | 2014 |
| External revenue | 3,781 | 3,919 | 2,722 | 2,788 | 3,440 | 3,357 | 3,447 | 3,485 | 13 | 20 | 0 | 0 | 13,403 | 13,569 |
| Internal revenue | 34 | 34 | 91 | 91 | 170 | 172 | 25 | 21 | 276 | 284 | – 596 | – 602 | 0 | 0 |
| Total revenue | 3,815 | 3,953 | 2,813 | 2,879 | 3,610 | 3,529 | 3,472 | 3,506 | 289 | 304 | – 596 | – 602 | 13,403 | 13,569 |
| Profit/loss from operating activities (EBIT) |
397 | 398 | 241 | 275 | 87 | 48 | 83 | 84 | – 98 | – 80 | 0 | 1 | 710 | 726 |
| Net income from investments accounted for using the equity method |
0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 1 | 1 |
| Segment assets2 | 5,197 | 5,510 | 8,246 | 8,301 | 7,594 | 7,745 | 5,968 | 6,062 | 1,491 | 1,624 | –118 | –190 | 28,378 | 29,052 |
| Investments accounted for using the equity method2 |
6 | 6 | 40 | 40 | 21 | 21 | 1 | 1 | 0 | 0 | 0 | 0 | 68 | 68 |
| Segment liabilities 2, 3 |
2,640 | 2,775 | 2,763 | 2,636 | 2,921 | 2,899 | 2,900 | 2,812 | 845 | 856 | –123 | –160 | 11,946 | 11,818 |
| Capex | 49 | 37 | 74 | 39 | 19 | 23 | 47 | 65 | 26 | 12 | 0 | 0 | 215 | 176 |
| Depreciation and amortisation |
87 | 93 | 89 | 89 | 23 | 22 | 70 | 64 | 51 | 53 | 0 | 0 | 320 | 321 |
| Impairment losses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total depreciation, amortisation and impairment losses |
87 | 93 | 89 | 89 | 23 | 22 | 70 | 64 | 51 | 53 | 0 | 0 | 320 | 321 |
| Other non-cash expenses |
27 | 47 | 37 | 43 | 15 | 21 | 28 | 21 | 16 | 24 | 0 | 0 | 123 | 156 |
| Employees4 | 164,431 | 161,726 | 70,462 | 71,394 | 43,694 | 43,905 | 143,724 | 147,209 | 12,907 | 12,740 | 0 | 0 | 435,218 | 436,974 |
| €m | Europe | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Germany | (excluding Germany) | Americas | Asia Pacific | Other regions | Group | |||||||
| 1 Jan. to 31 March | 20131 | 2014 | 20131 | 2014 | 20131 | 2014 | 20131 | 2014 | 20131 | 2014 | 20131 | 2014 |
| External revenue | 4,245 | 4,364 | 4,264 | 4,412 | 2,341 | 2,217 | 1,989 | 2,046 | 564 | 530 | 13,403 | 13,569 |
| Non-current assets2 | 5,129 | 5,017 | 7,015 | 6,984 | 3,226 | 3,214 | 3,024 | 2,998 | 332 | 329 | 18,726 | 18,542 |
| Capex | 125 | 76 | 31 | 48 | 28 | 33 | 22 | 12 | 9 | 7 | 215 | 176 |
1 Prior-period amounts adjusted Note 4 and details in Note 16.
2 As at 31 December 2013 and 31 March 2014.
3 Including non-interest-bearing provisions.
4 Average FTEs; prior-period amount corresponds to that of financial year 2013.
The MAIL division was renamed Post - eCommerce - Parcel (PeP) as part of the Group's ongoing strategic development.
Prior-period amounts were adjusted due to the initial application of IFRSs 10 and 11 ( Note 4) and the reallocation of companies between the segments. The domestic parcel business in Belgium, the Czech Republic, India, the Netherlands and Poland was
consolidated in the PeP division effective 1 January 2014. This business was previously part of the EXPRESS and GLOBAL FORWARDING, FREIGHT divisions. In addition, the US company Sky Courier Inc. was reallocated from the EXPRESS division to the GLOBAL FOR-WARDING, FREIGHT division. The prior-period amounts were adjusted accordingly.
Deutsche Post DHL reports four operating segments; these are managed independently by the responsible segment management bodies in line with the products and services offered and the brands, distribution channels and customer profiles involved. Components of the entity are defined as a segment on the basis of the existence of segment managers with bottom-line responsibility who report directly to Deutsche Post DHL's top management.
As part of the central management of currency risk, fluctuations between projected and actual exchange rates are fully or partially absorbed centrally by Corporate Treasury on the basis of division-specific agreements.
The Consolidation and Corporate Center/Other columns are reported separately. Corporate Center/Other comprises the activities of Global Business Services (GBS), the Corporate Center, non-operating activities and other business activities. The profit/ loss generated by GBS is allocated to the operating segments, whilst its assets and liabilities remain with GBS (asymmetrical allocation).
The profitability of the Group's operating divisions is measured as profit from operating activities (EBIT).
The main geographical areas in which the Group is active are Germany, Europe (excluding Germany), the Americas, Asia Pacific and Other regions. External revenue, non-current assets and capex are disclosed for these regions.
Revenue, assets and capex are allocated to the individual regions on the basis of the domicile of the reporting entity. Noncurrent assets primarily comprise intangible assets, property, plant and equipment and other non-current assets.
| €m | ||
|---|---|---|
| Q1 20131 | Q1 2014 | |
| Total income of reportable segments | 808 | 805 |
| Corporate Center/Other | – 98 | – 80 |
| Reconciliation to Group/Consolidation | 0 | 1 |
| Profit from operating activities (EBIT) | 710 | 726 |
| Net finance costs | – 43 | –79 |
| Profit before income taxes | 667 | 647 |
| Income taxes | –147 | –123 |
| Consolidated net profit for the period | 520 | 524 |
1 Prior-period amounts adjusted Note 4.
Under the share-based payment system for executives (Share Matching Scheme), certain executives receive part of their variable remuneration in the form of shares of Deutsche Post AG. More detailed information on this payment system is contained in the 2013 Annual Report, Note 54.
| 2009 tranche | 2010 tranche | 2011 tranche | 2012 tranche | 2013 tranche | 2014 tranche | ||
|---|---|---|---|---|---|---|---|
| Grant date of incentive shares and associated matching shares | 1 Nov. 2009 | 1 Jan. 2010 | 1 Jan. 2011 | 1 Jan. 2012 | 1 Jan. 2013 | 1 Jan. 2014 | |
| Grant date of matching shares awarded for investment shares | 1 April 2010 | 1 April 2011 | 1 April 2012 | 1 April 2013 | 1 April 2014 | 1 April 2015 | |
| Term | months | 53 | 63 | 63 | 63 | 63 | 63 |
| End of term | March 2014 | March 2015 | March 2016 | March 2017 | March 2018 | March 2019 | |
| Share price at grant date (fair value) | |||||||
| Incentive shares and associated matching shares | € | 11.48 | 13.98 | 12.90 | 12.13 | 17.02 | 25.91 |
| Matching shares awarded for investment shares | € | 13.03 | 12.91 | 14.83 | 18.22 | 27.18 | 28.501 |
1 Estimated provisional amount, will be determined on 1 April 2015.
The matching shares from the 2009 tranche were issued to executives on 1 April 2014. For this purpose, shares were issued by Deutsche Post AG by means of a capital increase and repurchased on the market in March 2014; Note 14.
The sum of €40 million was transferred to the capital reserves in the period up to 31 March 2014. Of this amount, €24 million was attributable to the Share Matching Scheme (31 December 2013: €35 million) and €16 million to the capital increase; Note 14.
| €m | ||
|---|---|---|
| 2013 | 2014 | |
| Balance at 1 January | 2,254 | 2,269 |
| Addition/issue of rights under Share Matching Scheme |
||
| 2009 tranche | 1 | 1 |
| 2010 tranche | 3 | 1 |
| 2011 tranche | 4 | 1 |
| 2012 tranche | 17 | 1 |
| 2013 tranche | 10 | 18 |
| 2014 tranche | 0 | 2 |
| Exercise of rights under Share Matching Scheme | ||
| 2012 tranche | –20 | 0 |
| Total for Share Matching Scheme | 15 | 24 |
| Capital increase1 | 0 | 16 |
| Balance at 31 December/31 March | 2,269 | 2,309 |
The SAR provisions for the other share-based payment systems for executives amounted to €320 million as at 31 March 2014 (31 December 2013: €278 million).
The techniques used to determine the fair value of financial instruments are presented in accordance with IFRS 13 (Fair Value Measurement). Cash and cash equivalents, trade receivables, other assets, trade payables and other liabilities with predominantly short maturities are excluded from this. Their carrying amounts as at the reporting date are approximately equivalent to their fair values. Not included are financial investments in equity instruments for which there is no quoted price in an active market and which therefore have to be measured at cost.
The following table therefore only presents financial instruments recognised at fair value and financial instruments whose fair value is required to be disclosed; the financial instruments are presented by the level in the fair value hierarchy to which they are assigned:
| €m | ||||
|---|---|---|---|---|
| Class | Level 11 | Level 22 | Level 33 | Total |
| 31 March 2014 | ||||
| Financial assets | ||||
| Non-current financial assets | 176 | 791 | 94 | 1,061 |
| Current financial assets | 200 | 91 | 0 | 291 |
| Total | 376 | 882 | 94 | 1,352 |
| Financial liabilities | ||||
| Non-current financial liabilities | 4,766 | 485 | 0 | 5,251 |
| Current financial liabilities | 0 | 28 | 1 | 29 |
| Total | 4,766 | 513 | 1 | 5,280 |
| 31 December 20134 | ||||
| Financial assets | ||||
| Non-current financial assets | 157 | 765 | 93 | 1,015 |
| Current financial assets | 611 | 140 | 0 | 751 |
| Total | 768 | 905 | 93 | 1,766 |
| Financial liabilities | ||||
| Non-current financial liabilities | 4,221 | 455 | 0 | 4,676 |
| Current financial liabilities | 927 | 27 | 2 | 956 |
| Total | 5,148 | 482 | 2 | 5,632 |
1 Quoted prices for identical instruments.
2 Directly or indirectly observable inputs.
3 Unobservable inputs.
4 Prior-period amounts adjusted; Note 4. Current financial instruments measured at cost were not included.
Level 1 mainly comprises equity instruments measured at fair value and debt instruments measured at amortised cost.
In addition to financial assets and financial liabilities measured at amortised cost, commodity, interest rate and currency derivatives are reported under Level 2. The fair values of derivatives are measured on the basis of discounted expected future cash flows, taking into account forward rates for currencies, interest rates and commodities (market approach). For this purpose, price quotations observable on the market (exchange rates, interest rates and commodity prices) are imported from information platforms customary in the market into the treasury management system. The price quotations reflect actual transactions involving similar instruments on an active market. Any currency options used are measured using the Black-Scholes option pricing model. All significant inputs used to measure derivatives are observable on the market.
Level 3 mainly comprises the fair values of equity investments and options entered into in connection with M&A transactions. These options are measured using recognised valuation models, taking plausible assumptions into account. The fair values of the options depend largely on financial ratios. Financial ratios strongly influence the fair values of assets and liabilities. Increasing financial ratios lead to higher fair values, whilst decreasing financial ratios result in lower fair values.
No financial instruments have been transferred between levels in the current financial year.
Unobservable inputs (Level 3)
The table below shows the effect on net gains and losses of the financial instruments categorised within Level 3 as at 31 March 2014:
| €m | Gains and losses (recognised in |
Gains and losses (recognised |
||||
|---|---|---|---|---|---|---|
| 1 Jan. 2014 | profit and loss)1 | in OCI) 2 |
Additions | Disposals | 31 March 2014 | |
| Assets | ||||||
| Equity instruments | 93 | 0 | 1 | 0 | 0 | 94 |
| Liabilities | ||||||
| Debt instruments | 0 | 0 | 0 | 0 | 0 | 0 |
| Derivatives | ||||||
| Equity derivatives | 2 | –1 | 0 | 0 | 0 | 1 |
| 1 Jan. 2013 | 31 Dec. 2013 | |||||
| Assets | ||||||
| Equity instruments | 28 | 0 | 41 | 24 | 0 | 93 |
| Liabilities | ||||||
| Debt instruments | 1 | –1 | 0 | 0 | 0 | 0 |
| Derivatives | ||||||
| Equity derivatives | 48 | – 43 | 0 | 0 | –3 | 2 |
1 Fair value losses were recognised in other finance costs.
2 Unrealised gains were recognised in the IAS 39 revaluation reserve.
Available-for-sale financial assets include shares in partnerships and corporations in the amount of €93 million (previous year: €97 million). There is no active market for these instruments. As no future cash flows can be reliably determined, the fair values cannot be determined using valuation techniques. There are no plans to sell or derecognise significant shares classified as availablefor-sale financial assets recognised as at 31 March 2014 in the near future. As in the previous year, no significant shares in partnerships and corporations that are measured at cost have been sold in the current financial year.
The following tables show the impact of netting agreements based on master netting arrangements or similar agreements on the presentation of financial assets and financial liabilities as at the reporting date:
| Offsetting – assets | ||||||
|---|---|---|---|---|---|---|
| €m | Financial assets and liabilities not set off in the balance sheet |
|||||
| Gross amount of financial assets recognised at the reporting date |
Gross amount of financial liabilities set off |
Net amount of financial assets set off in the balance sheet |
Financial liabilities subject to a legally enforceable netting agreement that do not meet offsetting criteria |
Collateral received |
Total | |
| Assets at 31 March 2014 | ||||||
| Derivative financial assets1 | 110 | 0 | 110 | 34 | 0 | 76 |
| Trade receivables | 7,292 | 127 | 7,165 | 0 | 0 | 7,165 |
| Assets at 31 December 20132 | ||||||
| Derivative financial assets1 | 156 | 0 | 156 | 38 | 0 | 118 |
| Trade receivables | 7,189 | 167 | 7,022 | 0 | 0 | 7,022 |
1 Excluding derivatives from M&A transactions.
2 Prior-period amounts adjusted; Note 4.
| €m | Financial assets and liabilities not set off in the balance sheet |
|||||
|---|---|---|---|---|---|---|
| Gross amount of financial liabilities recognised at the reporting date |
Gross amount of financial assets set off |
Net amount of financial liabilities set off in the balance sheet |
Financial assets subject to a legally enforceable netting agreement that do not meet offsetting criteria |
Collateral provided |
Total | |
| Liabilities at 31 March 2014 | ||||||
| Derivative financial liabilities1 | 34 | 0 | 34 | 34 | 0 | 0 |
| Trade payables | 5,681 | 127 | 5,554 | 0 | 0 | 5,554 |
| Liabilities at 31 December 20132 | ||||||
| Derivative financial liabilities1 | 38 | 0 | 38 | 38 | 0 | 0 |
| Trade payables | 6,525 | 167 | 6,358 | 0 | 0 | 6,358 |
1 Excluding derivatives from M&A transactions.
2 Prior-period amounts adjusted; Note 4.
Financial assets and liabilities are set off on the basis of netting agreements (master netting arrangements) only if an enforceable right of set-off exists and settlement on a net basis is intended as at the reporting date. If the right of set-off is not enforceable in the normal course of business, the financial assets and liabilities are recognised in the balance sheet at their gross amounts as at the reporting date. The master netting arrangement creates a conditional right of set-off that can only be enforced by taking legal action.
To hedge cash flow and fair value risks, Deutsche Post AG enters into financial derivative transactions with a large number of financial services institutions. These contracts are subject to a standardised master agreement for financial derivative transactions. This agreement provides for a conditional right of set-off, resulting in the recognition of the gross amount of the financial derivative transactions at the reporting date. The conditional right of set-off is presented in the table.
Settlement processes arising from services related to postal deliveries are subject to the Universal Postal Convention and the REIMS Agreement. These agreements, particularly the settlement conditions, are binding on all public postal operators for the specified contractual arrangements. Imports and exports between two parties to the agreement during a calendar year are offset in an annual statement of account and presented on a net basis in the final annual statement. Receivables and payables covered by the Universal Postal Convention and the REIMS Agreement are presented on a net basis at the reporting date. The tables above show the receivables and payables before and after offsetting.
The Group's contingent liabilities have not changed significantly compared with 31 December 2013; 2013 Annual Report, Note 51. The other financial obligations increased by around €500 million. Around €480 million of the increase was attributable mainly to aircraft lease obligations in connection with a new contract concluded between Deutsche Post DHL and Southern Air.
Bruce Edwards stepped down from the Board of Management and his position as Chief Executive Officer of DHL Supply Chain at the end of 10 March 2014. John Gilbert was appointed as the new member of the Board of Management responsible for the DHL Supply Chain division starting on 11 March 2014. Bruce Edwards will continue to act in an advisory capacity for the company until his retirement on 30 September 2014. There were no significant changes in related party disclosures as against 31 December 2013; 2013 Annual Report, Note 55.
There were no significant events after the reporting date.
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group in accordance with German accepted accounting principles, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Bonn, 14 May 2014
Deutsche Post AG The Board of Management
Dr Frank Appel
Ken Allen Roger Crook
Jürgen Gerdes John Gilbert
Lawrence Rosen Angela Titzrath
We have reviewed the condensed consolidated interim financial statements – comprising the income statement and statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity and selected explanatory notes – and the interim group management report of Deutsche Post AG, Bonn, for the period from 1 January to 31 March 2014, which are
part of the quarterly financial report pursuant to section 37x (3) of the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRSs applicable to interim financial reporting, as adopted by the EU, and of the interim group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the company's Board of Management. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW – Institute of Public Auditors in Germany) and additionally observed the International Standard on Review Engagements "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE 2410). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRSs applicable to interim financial reporting, as adopted by the EU, and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRSs applicable to interim financial reporting, as adopted by the EU, nor that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.
Bonn, 14 May 2014
PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
Gerd Eggemann Dietmar Prümm Wirtschaftsprüfer Wirtschaftsprüfer
(German public auditor) (German public auditor)
| 01 | Selected key figures | I |
|---|---|---|
| INTERIM GROUP MANAGEMENT REPORT | ||
| Report on Economic Position | ||
| 02 | Selected indicators for results of operations 4 | |
| 03 | Consolidated revenue | 4 |
| 04 | Revenue by region | 4 |
| 05 | Development of revenue, other operating income and operating expenses, Q1 2014 |
5 |
| 06 | Consolidated EBIT | 5 |
| 07 | EBIT after asset charge (EAC) | 5 |
| 08 | Selected cash flow indicators | 6 |
| 24 | Share price performance | 19 |
|---|---|---|
| 25 | Deutsche Post shares | 20 |
| 26 | Peer group comparison: closing prices | 20 |
| 27 | Income Statement | 25 |
|---|---|---|
| 28 | Statement of Comprehensive Income | 26 |
| 29 | Balance Sheet | 27 |
| 30 | Cash Flow Statement | 28 |
| 31 | Statement of Changes in Equity | 29 |
Tel.: + 49 (0) 228 182-6 36 36 Fax: + 49 (0) 228 182-6 31 99 e-mail: ir @ dpdhl.com
Tel.: + 49 (0) 228 182-99 44 Fax: + 49 (0) 228 182-98 80 e-mail: pressestelle @ dpdhl.com
Published on 15 May 2014.
Deutsche Post Corporate Language Services et al.
The English version of the Interim Report January to March 2014 of Deutsche Post DHL constitutes a translation of the original German version.
Only the German version is legally binding, insofar as this does not conflict with legal provisions in other countries.
e-mail: ir @ dpdhl.com dpdhl.com/en/investors
GeT and dhl Webshop Mat. no. 675-602-355
2014 ANNUAL GENERAL MEETING (FRANKFURT AM MAIN) 27 May 2014
DIVIDEND PAYMENT 28 May 2014
INTERIM REPORT JANUARY TO JUNE 2014 5 August 2014
INTERIM REPORT JANUARY TO SEPTEMBER 2014 12 November 2014
2014 ANNUAL REPORT 11 March 2015
INTERIM REPORT JANUARY TO MARCH 2015 12 May 2015
2015 ANNUAL GENERAL MEETING (FRANKFURT AM MAIN) 27 May 2015
DIVIDEND PAYMENT 28 May 2015
INTERIM REPORT JANUARY TO JUNE 2015 5 August 2015
INTERIM REPORT JANUARY TO SEPTEMBER 2015 11 November 2015
Further dates, updates as well as information on live webcasts dpdhl.com/en/investors.
Deutsche Post AG Headquarters Investor Relations 53250 Bonn Germany
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