Quarterly Report • May 20, 2016
Quarterly Report
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as at 31 March 2016
PeP ebit increasing as sustained Parcel growth and stamp price increase offset Post volume decline and investments in international network expansion
Express ebit growth driven by continued strong volume development. Continuing fx headwind partly offset by mitigation measures
Global Forwarding turnaround making further progress
Supply Chain on track, second and last tranche of King's Cross real estate sale executed
Cash fl ow performance showing usual seasonal pattern
Sustained, positive volume and yield development in Parcel and Express
Global Forwarding turnaround agenda and it renewal roadmap making good progress
Supply Chain with solid fi rst quarter and real estate gain; further restructuring investments
CLEAR AGENDA DRIVEN BY OUR LONG-TERM STRATEGIC AND FINANCIAL GOALS:
,
,
Mail items (millions)
Q
Q , adjusted
Q Q
(Q 1 2015: € 14,767 million)
| € | |
|---|---|
| Q | |
| . | |
| Q | |
| . |
Basic earnings per share.
(Q 1 2015: 4.9 %)
€ 873 million
€ m
EBIT, Q
Profi t from operating activities. (Q 1 2015: € 720 million)
Q
Q
After deduction of non-controlling interests.
| Q 1 2015 | Q 1 2016 | + / – % | ||
|---|---|---|---|---|
| Revenue | € m | 14,767 | 13,872 | – 6.1 |
| Profi t from operating activities (EBIT) | € m | 720 | 873 | 21.3 |
| Return on sales 1 | % | 4.9 | 6.3 | – |
| EBIT after asset charge (EAC) | € m | 332 | 490 | 47.6 |
| Consolidated net profi t for the period 2 | € m | 495 | 639 | 29.1 |
| Free cash fl ow | € m | –377 | –700 | – 85.7 |
| Net debt 3 | € m | 1,093 | 1,974 | 80.6 |
| Earnings per share 4 | € | 0.41 | 0.53 | 29.3 |
| Number of employees 5 | 497,745 | 494,849 | – 0.6 |
1 EBIT / revenue.
2 After deduction of non-controlling interests.
3 Prior-period amount as at 31 December, for the calculation page 5 of the Interim Group Management Report.
4 Basic earnings per share.
5 Headcount at the end of the fi rst quarter, including trainees; prior-period amount as at 31 December.
In the first quarter of 2016, no material changes were made to the Group's organisational structure and no such changes are planned at the moment for the current financial year.
As a service provider, Deutsche Post DHL Group does not engage in research and development activities in the narrower sense and therefore has no significant expenses to report in this connection.
The global economy grew moderately at the beginning of the year. In the industrial countries, growth was virtually unchanged compared with the previous year; in emerging economies, growth was significantly more dynamic but remained very moderate.
In Asia, growth remained overall robust, however, the Chinese economy weakened further. By contrast, the economy in Japan stabilised.
In the United States, the weak economic period continued whilst the negative impact of foreign trade was unchanged. In addition, private consumption lost momentum. The US Federal Reserve kept its key interest rate at between 0.25% and 0.50%.
In the euro zone, economic recovery accelerated. The inflation rate fell into negative figures following a further decline in the oil price. The European Central Bank reduced its key interest rate to 0.00% and widely expanded its bond-buying programme.
The German economy saw substantial growth. However, sentiment remained sceptical: the German ifo Business Climate Index initially saw a sharp decline only to improve again in March.
At the end of January 2016, we sold the remaining shares in UK property development companies King's Cross Central Property Trust and King's Cross Central Partner Ltd.
Pension provisions increased substantially in the first quarter of 2016. This increase is largely due to the decrease in discount rates, which was recognised directly in equity. An offsetting measurement-related reversal resulted from changes in the occupational retirement arrangement in Germany. A number of other human resources measures, including the early retirement scheme for civil servants, mean that, overall, there was no effect on earnings.
| Q1 2015 | Q1 2016 | ||
|---|---|---|---|
| Revenue | €m | 14,767 | 13,872 |
| Profit from operating activities (EBIT) |
€m | 720 | 873 |
| Return on sales1 | % | 4.9 | 6.3 |
| EBIT after asset charge (EAC) | €m | 332 | 490 |
| Consolidated net profit for the period2 |
€m | 495 | 639 |
| Earnings per share3 | € | 0.41 | 0.53 |
1 EBIT/revenue.
2 After deduction of non-controlling interests.
3 Basic earnings per share.
In January 2016, we acquired 27.5% of the shares in French logistics provider Relais Colis. The company is accounted for using the equity method.
In the first quarter of 2016, we sold all of our shares in nugg.ad GmbH.
There were no changes in reporting.
Consolidated revenue in the first quarter of 2016 fell by €895 million to €13,872 million. The change to the way in which revenue and expenses are reported as a result of revised terms of the UK National Health Service (NHS) con-
Changes in revenue, other operating income and operating expenses, Q1 2016
tract led to a €465 million decrease in revenue. In addition, negative currency effects led to a drop of €402 million. The proportion of revenue generated abroad declined from 69.9% to 67.7%. Other operating income fell from €589 million to €548 million; in particular, the prior-year figure contained higher currency translation gains. The figure for the reporting period included gains on the disposal of the shares in King's Cross in the amount of €63 million.
The substantial €1,020 million decrease in materials expense to €7,301 million made a significant contribution to the improvement in earnings. The cost of goods purchased and held for resale dropped considerably as a result of the revised NHS contract. Lower transportation and fuel costs as well as currency effects also reduced this item. Furthermore, other operating expenses declined noticeably from €1,082 million to €1,000 million, driven in particular by lower currency translation expenses.
At €873 million, profit from operating activities (EBIT) in the first quarter of 2016 was up 21.3% on the previous year (€720 million). Net finance costs, on the other hand, widened from €64 million to €93 million, mainly because of a lower foreign currency result. Profit before income taxes rose by €124 million to €780 million. By contrast, income taxes fell slightly, by €6 million to €109 million, as a result of a lower tax rate.
| €m | +/–% | ||
|---|---|---|---|
| Revenue | 13,872 | – 6.1 • Decrease of €465 million due to revised NHS contract • Currency effects lead to a drop of €402 million |
|
| Other operating income | 548 | –7.0 • Includes gains on the disposal of shares in King's Cross in the amount of €63 million • Higher income from currency translation in prior-year period |
|
| Materials expense | 7,301 | –12.3 • Drop of €459 million in cost of goods purchased and held for resale due to revised NHS contract • Lower transportation and fuel costs • Currency effects lead to a decrease of €181 million |
|
| Staff costs | 4,921 | 0.1 • At prior-year level | |
| Depreciation, amortisation and impairment losses | 326 | 2.2 • Up slightly on prior-year level | |
| Other operating expenses | 1,000 | –7.6 • Lower currency translation expenses |
Consolidated net profit for the period rose from €541 million to €671 million in the reporting period. Of this amount, €639 million is attributable to shareholders of Deutsche Post AG and €32 million to non-controlling interest holders. Basic earnings per share improved from €0.41 to €0.53 and diluted earnings per share from €0.39 to €0.51.
In the first quarter of 2016, EBIT after asset charge (EAC) climbed from €332 million to €490 million, mainly as a result of the company's increased profitability. The imputed asset charge remained stable year-on-year, with investments in property, plant and equipment in all divisions being offset by a decline in net working capital.
| Q1 2015 | Q1 2016 | +/–% |
|---|---|---|
| 720 | 873 | 21.3 |
| –388 | –383 | 1.3 |
| 332 | 490 | 47.6 |
| €m | ||
|---|---|---|
| Q1 2015 | Q1 2016 | |
| Cash and cash equivalents as at 31 March | 2,646 | 2,732 |
| Change in cash and cash equivalents | – 427 | –793 |
| Net cash from/used in operating activities | 79 | –212 |
| Net cash used in investing activities | – 501 | – 467 |
| Net cash used in financing activities | – 5 | –114 |
The principles and aims of our financial management as presented in the 2015 Annual Report beginning on page 53 remain valid and continue to be pursued as part of our finance strategy.
As expected, the FFO to debt performance metric decreased in the first quarter of 2016 as a result of the increase in financial liabilities. Surplus cash and near-cash investments declined, mainly as a result of the annual pension-related prepayment to the Bundesanstalt für Post und Telekommunikation due in the first quarter. Moreover, the adjustment for pensions increased based on higher pension obligations resulting from lower discount rates. In addition, plan assets declined due primarily to currency effects. The amount of interest paid increased, due primarily to the interest income generated from unwinding interest rate swaps related to outstanding bonds in the first quarter of 2015.
Our credit quality as rated by Moody's Investors Service and Fitch Ratings has not changed from the ratings described and projected in the 2015 Annual Report beginning on page 56. 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 2016, the Group had cash and cash equivalents of €2.7 billion.
| €m | 1 Jan. to | 1 April 2015 |
|---|---|---|
| 31 Dec. 2015 | to 31 March | |
| adjusted1 | 2016 | |
| Operating cash flow before changes in working | ||
| capital | 2,656 | 2,772 |
| Interest received | 47 | 46 |
| Interest paid | 76 | 150 |
| Adjustment for operating leases | 1,413 | 1,453 |
| Adjustment for pensions | 239 | 205 |
| Funds from operations (FFO) | 4,279 | 4,326 |
| Reported financial liabilities2 | 5,178 | 5,151 |
| Financial liabilities at fair value through profit | ||
| or loss2 | 125 | 142 |
| Adjustment for operating leases2 | 6,394 | 6,389 |
| Adjustment for pensions2 | 6,103 | 6,674 |
| Surplus cash and near-cash investments2, 3 | 2,641 | 1,725 |
| Debt | 14,909 | 16,347 |
| FFO to debt (%) | 28.7 | 26.5 |
1 Non-recurring income or expense is no longer reported separately since it is no longer generated or incurred in a relevant scope.
2 As at 31 December 2015/31 March 2016.
3 Reported cash and cash equivalents and investment funds callable at sight, less cash needed for operations.
| PeP | Express | Global Forwarding, Freight |
Supply Chain | Corporate Center/ Other |
Consolidation1 | Group | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | |
| Capex (€m) | 64 | 74 | 75 | 191 | 40 | 10 | 73 | 100 | 22 | 37 | 0 | –1 | 274 | 411 |
| Depreciation, amortisation and impairment losses (€m) |
76 | 77 | 91 | 104 | 23 | 20 | 73 | 74 | 57 | 51 | –1 | 0 | 319 | 326 |
| Ratio of capex to depreciation, amortisation and impairment |
||||||||||||||
| losses | 0.84 | 0.96 | 0.82 | 1.84 | 1.74 | 0.50 | 1.00 | 1.35 | 0.39 | 0.73 | – | – | 0.86 | 1.26 |
1 Including rounding.
Investments in property, plant and equipment and intangible assets (not including goodwill) amounted to €411 million in the first quarter of 2016 (previous year: €274 million). Please refer to Notes 8 and 13 to the consolidated financial statements for a breakdown of capex into asset classes and regions.
In the Post - eCommerce - Parcel division, the largest capex portion continued to be attributable to the expansion of our domestic and international parcel network and production of our StreetScooter electric vehicle.
In the Express division, a significant portion of investment spending went towards the continuous maintenance and renewal of our aircraft fleet. We also expanded our hubs, particularly in Leipzig and East Midlands.
In the Global Forwarding, Freight division, we continued to invest in turnaround measures as well as in warehouses and office buildings, technical equipment and machinery.
In the Supply Chain division, around 54% of funds were used to support new business, mostly in the Americas and EMEA regions where we made notable investments in the Consumer and Retail sectors.
Cross-divisional capital expenditure increased due to higher expenses for the vehicle fleet.
Net cash used in operating activities in the first quarter of 2016 amounted to €212 million, compared with net cash from operating activities of €79 million in the previous year. The gains on the disposal of the shares in King's Cross (€63 million) contained in the EBIT figure have been eliminated in net cash used in operating activities and are instead shown in cash flow from investing activities. The change in provisions widened from €−140 million to €−178 million. Income tax payments amounted to €89 million, down €58 million year-on-year. The cash outflow from changes in working capital rose by €407 million to €1,065 million, due
in particular to the reduction in liabilities and other items. At €467 million, net cash used in investing activities was lower than in the previous year (€501 million). The reduction in this figure was primarily the result of the proceeds from the sale of the shares in King's Cross.
| €m | ||
|---|---|---|
| Q1 2015 | Q1 2016 | |
| Net cash from/used in operating activities | 79 | –212 |
| Sale of property, plant and equipment and intangible assets |
39 | 33 |
| Acquisition of property, plant and equipment and intangible assets |
– 565 | – 577 |
| Cash outflow arising from change in property, plant and equipment and intangible assets |
– 526 | – 544 |
| Disposals of investments accounted for using the equity method and other investments |
0 | 80 |
| Acquisition of investments accounted for using the equity method and other investments |
0 | –19 |
| Cash inflow arising from acquisitions/ divestitures |
0 | 61 |
| Interest received | 12 | 11 |
| Interest paid | 58 | –16 |
| Net interest paid | 70 | – 5 |
| Free cash flow | –377 | –700 |
Free cash flow decreased significantly from €−377 million to €−700 million, due primarily to net cash used in operating activities in the amount of €212 million. By contrast, net cash from operating activities of €79 million had been generated in the prior-year period. In addition, positive net interest payments were generated in the prior year, whereas in the reporting period net cash flows from acquisitions and divestitures – which were mainly influenced by the sale of the shares in King's Cross – lifted the figure.
At €114 million, net cash used in financing activities was €109 million higher than in the previous year (€5 million). In the previous year, we unwound interest rate swaps on outstanding bonds which led to a cash inflow.
Changes in the cash flows from the individual areas of activity saw cash and cash equivalents decline from €3,608 million as at 31 December 2015 to €2,732 million.
| 31 Dec. 2015 | 31 March 2016 | ||
|---|---|---|---|
| Equity ratio | % | 29.8 | 28.7 |
| Net debt | €m | 1,093 | 1,974 |
| Net interest cover1 | –10.3 | 174.6 | |
| Net gearing | % | 8.8 | 15.7 |
| FFO to debt2 | % | 28.7 | 26.5 |
1 In the first quarter.
2 For the calculation Financial position, page 3.
The Group's total assets amounted to €36,962 million as at 31 March 2016, €908 million lower than at 31 December 2015 (€37,870 million).
A decrease in goodwill due to exchange rate movements was the main cause of the decrease in intangible assets, which fell from €12,490 million to €12,221 million. In addition, trade receivables declined by €320 million to €7,374 million. Conversely, other current assets climbed by €680 million to €2,852 million: this includes the accrual of the prepaid annual contribution to the Bundesanstalt für Post und Telekommunikation in the amount of €375 million. The €876 million decrease in cash and cash equivalents to €2,732 million was a key reason for the reduction in total assets. For further details, please refer to the Financial position, page 4 f.
On the equity and liabilities side of the balance sheet, equity attributable to Deutsche Post AG shareholders declined by €725 million to €10,309 million: consolidated net profit for the period increased equity, whilst actuarial losses on pension obligations and negative currency effects were the largest factors leading to the overall decrease. Trade payables fell considerably from €7,069 million to €5,837 million. The actuarial losses are also largely responsible for the €486 million increase in provisions for pensions and similar obligations, which rose to €6,707 million. Other current liabilities rose by €362 million to €4,617 million, due primarily to an increase in liabilities to employees relating to provisions for vacation entitlements, amongst other things.
Our net debt rose from €1,093 million on 31 December 2015 to €1,974 million as at 31 March 2016, in part because of the regular annual contribution to the Bundesanstalt für Post und Telekommunikation paid in the first quarter (€517 million). At 28.7%, the equity ratio was lower than on 31 December 2015 (29.8%). Net interest cover shows the extent to which net interest obligations are covered by EBIT. It rose from –10.3 to 174.6. Net gearing was 15.7% on 31 March 2016.
| €m | ||
|---|---|---|
| 31 Dec. 2015 | 31 March 2016 | |
| Non-current financial liabilities | 4,578 | 4,563 |
| Current financial liabilities | 440 | 470 |
| Financial liabilities | 5,018 | 5,033 |
| Cash and cash equivalents | 3,608 | 2,732 |
| Current financial assets | 179 | 190 |
| Positive fair value of non-current financial derivatives1 |
138 | 137 |
| Financial assets | 3,925 | 3,059 |
| Net debt | 1,093 | 1,974 |
1 Reported in non-current financial assets in the balance sheet.
| €m | |||
|---|---|---|---|
| Q1 2015 | Q1 2016 | +/– % | |
| Revenue | 4,101 | 4,201 | 2.4 |
| of which Post | 2,564 | 2,532 | –1.2 |
| eCommerce - Parcel | 1,537 | 1,669 | 8.6 |
| Profit from operating activities (EBIT) | 399 | 412 | 3.3 |
| of which Germany | 393 | 410 | 4.3 |
| International Parcel and eCommerce |
6 | 2 | – 66.7 |
| Return on sales (%)1 | 9.7 | 9.8 | – |
| Operating cash flow | 185 | 80 | – 56.8 |
1 EBIT/revenue.
In the first quarter of 2016, revenue in the division was €4,201 million, 2.4% above the prior-year figure of €4,101 million – despite 1.0 fewer working days in Germany. Consistent, strong growth in the eCommerce - Parcel business unit in particular contributed significantly to this increase. Excluding negative currency effects of €11 million, revenue growth was 2.7%.
In the Post business unit, revenue and volumes in the first quarter of 2016 were below the prior-year level. Revenue declined by 1.2% to €2,532 million (previous year: €2,564 million). Volumes declined by 3.8%.
The price increases for Standardbrief and Maxibrief letter items and for additional services at the beginning of the year offset the decrease in revenue resulting from the overall decline in Mail Communication volumes which was due, in part, to the loss of one working day. The cross-border mail business continued to perform well, particularly as a result of the increase in small-goods shipments and the price increases for the Standardbrief and Großbrief International products at the beginning of the year.
Revenue and volumes fell slightly in the Dialogue Marketing business, especially in unaddressed advertising mail.
Post: revenue
| €m | Q1 2015 adjusted1 |
Q1 2016 | +/– % |
|---|---|---|---|
| Mail Communication | 1,724 | 1,724 | 0.0 |
| Dialogue Marketing | 550 | 547 | – 0.5 |
| Other | 290 | 261 | –10.0 |
| Total | 2,564 | 2,532 | –1.2 |
1 Adjusted due to changed product allocations.
| Mail items (millions) | Q1 2015 adjusted1 |
Q1 2016 | +/–% |
|---|---|---|---|
| Total | 5,076 | 4,883 | –3.8 |
| of which Mail Communication | 2,361 | 2,225 | – 5.8 |
| of which Dialogue Marketing | 2,240 | 2,193 | –2.1 |
1 Adjusted due to changed product allocations.
In the first quarter of 2016, revenue in the business unit was €1,669 million, exceeding the prior-year figure of €1,537 million by 8.6%.
Parcel Germany's revenue increased by 6.9% to €1,135 million (previous year: €1,062 million). Volumes rose by 5.5%, to 288 million parcels.
In the Parcel Europe business revenue grew by 13.9% to €197 million (previous year: €173 million). Expansion of the business is progressing; we entered the French e-commerce market by acquiring an interest in Relais Colis.
In the DHL eCommerce business, revenue was €337 million in the reporting period, exceeding the prior-year figure by 11.6%. Excluding currency effects, growth was 14.6%. The positive trend in the US domestic business continued; the cross-border business in Asia also performed very well.
| €m | |||
|---|---|---|---|
| Q1 2015 | Q1 2016 | +/–% | |
| Parcel Germany | 1,062 | 1,135 | 6.9 |
| Parcel Europe1 | 173 | 197 | 13.9 |
| DHL eCommerce2 | 302 | 337 | 11.6 |
| Total | 1,537 | 1,669 | 8.6 |
1 Excluding Germany.
2 Outside Europe.
| Parcel Germany: volumes | |||
|---|---|---|---|
| Parcels (millions) | |||
| Q1 2015 | Q1 2016 | +/–% | |
| Total | 273 | 288 | 5.5 |
In the first quarter of 2016, EBIT in the division improved by 3.3% to €412 million (previous year: €399 million). This was driven mainly by higher revenues, whilst increased material and labour costs as well as the continued investments in our parcel network prevented a more significant improvement in earnings. The majority of our EBIT is currently being generated in Germany; earnings in our international business reflect the investments in the expansion of the European and worldwide parcel business. Return on sales rose to 9.8% (previous year: 9.7%).
Operating cash flow decreased from €185 million to €80 million, which was attributable mainly to a higher cash outflow from working capital. The annual prepayment to the Bundesanstalt für Post und Telekommunikation was made in the first quarter, of which €482 million was attributable to the division.
| €m | |||
|---|---|---|---|
| Q1 2015 | Q1 2016 | +/– % | |
| Revenue | 3,240 | 3,251 | 0.3 |
| of which Europe | 1,427 | 1,477 | 3.5 |
| Americas | 590 | 630 | 6.8 |
| Asia Pacific | 1,177 | 1,187 | 0.8 |
| MEA (Middle East and Africa) |
254 | 261 | 2.8 |
| Consolidation/Other | –208 | –304 | – 46.2 |
| Profit from operating activities (EBIT) | 332 | 357 | 7.5 |
| Return on sales (%)1 | 10.2 | 11.0 | – |
| Operating cash flow | 334 | 234 | –29.9 |
1 EBIT/revenue.
Revenue in the division increased by 0.3% to €3,251 million in the first quarter of 2016 (previous year: €3,240 million). As a significant portion of our business activities take place
outside the euro zone, we recorded currency effects of €−134 million. Excluding these effects, revenue growth was 4.5%. This also reflects the fact that fuel surcharges were lower in all regions as the price of crude oil fell compared with the previous year. Revenue increased by 6.1% excluding the negative effects resulting from both foreign currency losses and lower fuel surcharges.
Revenues per day in the Time Definite International (TDI) product line increased by 4.9% compared with the previous year. The number of shipments sent per day increased by 7.9% in the first three months.
In the Time Definite Domestic (TDD) product line, perday shipment volumes increased by 11.1% and revenues per day by 10.8% in the reporting period.
| Q1 2015 adjusted |
Q1 2016 | +/– % |
|---|---|---|
| 38.7 | 40.6 | 4.9 |
| 3.7 | 4.1 | 10.8 |
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.
| Thousands of items per day 1 | Q1 2015 adjusted |
Q1 2016 | +/– % |
|---|---|---|---|
| Time Definite International (TDI) | 708 | 764 | 7.9 |
| Time Definite Domestic (TDD) | 378 | 420 | 11.1 |
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 3.5% to €1,477 million in the first quarter 2016 (previous year: €1,427 million). This included negative currency effects of €33 million, which related mainly to the United Kingdom and Turkey. Excluding these effects, revenue growth was 5.8%. In the TDI product line, revenues per day increased by 5.6%. Per-day TDI shipment volumes improved by 9.4%.
Revenue in the Americas region increased by 6.8% to €630 million (previous year: €590 million). This included negative currency effects of €46 million, which related mainly to our business activities in Mexico and South America. Excluding these effects, revenue in the region rose by 14.6%. Compared with the prior-year, shipments per day increased by 9.0% in the TDI product line. Revenue growth per day was 9.9%.
Revenue in the Asia Pacific region increased by 0.8% to €1,187 million in the first quarter (previous year: €1,177 million). This included negative currency effects of €44 million that related primarily to China and India as well as other countries in the region. Excluding these effects, the revenue increase was 4.6%. In TDI, both revenues and volumes per day grew by 2.6% and 7.1%, respectively.
Revenue in the MEA region (Middle East and Africa) increased by 2.8% to €261 million in the reporting period (previous year: €254 million). This included negative currency effects of €12 million, which resulted mainly from South Africa as well as other countries in the region. Excluding these effects, revenue growth in this region was 7.5%. Daily TDI revenues rose by 6.3% and per-day volumes by 3.5%.
In the first quarter of 2016, EBIT in the division improved by 7.5% to €357 million (previous year: €332 million). Network improvement, strong international business growth and pricing initiatives all contributed to an expanded operating margin and increased profitability. Return on sales rose from 10.2% to 11.0%. Operating cash flow declined to €234 million in the reporting period (previous year: €334 million) as the improved profitability of our business activities in the first quarter did not offset the higher cash outflow from changes in working capital.
| €m | |||
|---|---|---|---|
| Q1 2015 | Q1 2016 | +/– % | |
| Revenue | 3,789 | 3,327 | –12.2 |
| of which Global Forwarding | 2,791 | 2,325 | –16.7 |
| Freight | 1,039 | 1,044 | 0.5 |
| Consolidation/Other | – 41 | – 42 | –2.4 |
| Profit from operating activities (EBIT) | 17 | 51 | >100 |
| Return on sales (%)1 | 0.4 | 1.5 | – |
| Operating cash flow | –160 | –166 | –3.8 |
1 EBIT/revenue.
Revenue in the division decreased by 12.2% to €3,327 million in the first quarter of 2016 (previous year: €3,789 million). Excluding negative currency effects of €111 million, revenue was down year-on-year by 9.3%. In the Global Forwarding business unit, revenue in the reporting period declined by 16.7% to €2,325 million (previous year: €2,791 million). Excluding negative currency effects of €106 million, the decline was 12.9%. Gross profit was €580 million, thereby almost achieving the prior-year level (€587 million).
In the reporting period, revenues in air and ocean freight decreased year-on-year. Compared with the previous year, air freight volumes declined whilst ocean freight volumes increased slightly.
Air freight volumes fell by 10.6% as a result of an overall declining market and measures we implemented in the previous year, which included withdrawing from selected business activities with insufficient margins. We have, however, secured additional new business during the reporting period, which will be implemented as the year progresses and is expected to have a positive impact on volume development. Air freight prices remain under pressure due to large surplus capacities and low fuel costs, which reduced our revenue by 18.4% and gross profit by 4.5% in the first quarter of 2016.
Ocean freight volumes were up by 2.6% in the reporting period, with exports from Asia and the intra-Asia volumes driving most of the growth. This was also supported further by growth in the trans-Pacific market. Freight rates on some of our major routes continued to be volatile. As a result, our ocean freight revenue fell by 13.6% whilst gross profit rose by 19.7%.
The performance of our industrial project business (in the following table, reported as part of Other in the Global Forwarding business unit) was considerably weaker than in the previous year, due in part to the conclusion of projects started in previous years and in part to low oil prices reducing customer demand, particularly in the Oil&Energy sector. The share of revenue related to industrial project business and reported under Other was 20.4% and therefore reduced compared with the previous year (30.8%). Gross profit declined by 34.0% compared with the first quarter of the previous year.
| Q1 2015 | Q1 2016 | +/–% |
|---|---|---|
| 1,290 | 1,053 | –18.4 |
| 940 | 812 | –13.6 |
| 561 | 460 | –18.0 |
| 2,791 | 2,325 | –16.7 |
| Thousands | ||||
|---|---|---|---|---|
| Q1 2015 | Q1 2016 | +/–% | ||
| Air freight | tonnes | 935 | 836 | –10.6 |
| of which exports | tonnes | 522 | 476 | – 8.8 |
| Ocean freight | TEUs1 | 704 | 722 | 2.6 |
1 Twenty-foot equivalent units.
In the Freight business unit, revenue rose slightly by 0.5% to €1,044 million in the first quarter of 2016 (previous year: €1,039 million) despite negative currency effects of €6 million. Transport volumes increased by 3.8%. Growth was driven further by less-than-truckload business in Germany and France as well as e-commerce related business in Sweden. Business restrictions with some members of the CIS region had an adverse impact on performance. Gross profit was €272 million and thereby consistent with the prior-year level (€272 million).
EBIT in the division increased significantly in the reporting period from €17 million to €51 million. The strategic reorientation, which includes turnaround measures and cost controls, is beginning to take effect. This also improved gross profit margins. Return on sales rose to 1.5% (previous year: 0.4%).
Net working capital declined significantly in the reporting period thanks to improved receivables management. This positive development was offset by lower accounts payable. Operating cash flow amounted to €–166 million (previous year: €–160 million).
| €m | Q1 2015 adjusted |
Q1 2016 | +/– % |
|---|---|---|---|
| Revenue | 3,942 | 3,393 | –13.9 |
| of which EMEA (Europe, Middle East and Africa) |
2,396 | 1,845 | –23.0 |
| Americas | 1,046 | 1,049 | 0.3 |
| Asia Pacific | 510 | 508 | – 0.4 |
| Consolidation/Other | –10 | – 9 | 10.0 |
| Profit from operating activities (EBIT) | 53 | 127 | >100 |
| Return on sales (%)1 | 1.3 | 3.7 | – |
| Operating cash flow | –112 | –141 | –25.9 |
1 EBIT/revenue.
Revenue in the division decreased by 13.9% to €3,393 million in the first quarter of 2016 (previous year: €3,942 million). This decline was due mainly to the change in revenue recognition in connection with the UK National Health Service (NHS) in the fourth quarter of 2015 as a result of the revised terms of the contract. Furthermore, negative currency effects decreased revenue in the reporting period by €150 million. Excluding these effects, revenue growth was 1.7%. Compared with the previous year, the Automotive sector achieved the highest revenue growth.
In the EMEA region, revenue increased in the Automotive sector. By contrast, revenue in the Life Sciences&Healthcare sector declined, reflecting the change in the NHS revenue reporting in the UK.
In the Americas region, we gained revenue from new business in the United States, driven predominantly by the Consumer sector.
In Asia Pacific, revenue declined primarily from lower volumes in Australia and negative currency effects across the region. This was offset largely by revenue growth from new and additional business, mainly in China, Hong Kong, Indonesia and Vietnam. Revenue increased significantly in China in the Automotive sector and in Hong Kong in the Technology sector. Revenue growth in Indonesia and Vietnam came primarily from the Consumer sector.
SUPPLY CHAIN: revenue by sector and region, Q1 2016
Total revenue: €3,393 million
| of which Retail | 25% |
|---|---|
| Consumer | 24% |
| Automotive | 14% |
| Technology | 11% |
| Life Sciences & Healthcare | 9% |
| Others | 8% |
| Engineering & Manufacturing | 5% |
| Financial Services | 4% |
| of which Europe/Middle East/Africa/Consolidation | 54% |
| Americas | 31% |
| Asia Pacific | 15% |
In the first quarter of 2016, the division concluded additional contracts worth around €276 million in annualised revenue with both new and existing customers. The Retail, Consumer, Automotive and Technology sectors accounted for the majority of the gains. The annualised contract renewal rate remained at a consistently high level.
Strong EBIT growth achieved due particularly to disposal gains EBIT in the division was €127 million in the first quarter of 2016 (previous year: €53 million). The strong EBIT growth was achieved due, in particular, to gains on the disposal of shares in King's Cross in the UK. Positive effects from the strategic initiatives also contributed to the increase in earnings. Return on sales rose to 3.7% (previous year: 1.3%). Operating cash flow fell to €–141 million (previous year: €–112 million) due to higher net working capital levels.
On 1 April 2016, the Group placed two senior bonds with a total volume of €1.25 billion with national and international investors. The capital raised will largely be used for the further funding of pension liabilities. The first bond has a term of five years, a volume of €750 million and an annual coupon of 0.375%. The second bond has a volume of €500 million, a term of ten years and an annual coupon of 1.250%.
The Group's overall opportunity and risk situation did not change significantly during the first three months of 2016 as compared with the situation described in the 2015 Annual Report, beginning on page 83. No new risks were identified that could have a significant impact on the Group's results. 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.
The economic outlook for full-year 2016 as reported in the 2015 Annual Report, beginning on page 94 deteriorated slightly in the first quarter. The International Monetary Fund (IMF) now expects global economic output to grow by 3.2% and global trade by 3.1% in 2016.
In China, gross domestic product (GDP) is projected to grow more slowly than in the previous year (IMF: 6.5%). GDP growth in Japan is likely to remain moderate (IMF: 0.5%; IHS: 0.7%).
In the United States, full-year GDP growth is expected to be slower than in the previous year (IMF: 2.4%; IHS: 2.1%).
In the euro zone, GDP growth in 2016 is projected to be on par with the previous year (IMF: 1.5%; ECB: 1.4%; IHS: 1.6%).
In Germany, early indicators suggest that the strong growth at the start of the year may lose some momentum. Exports are likely to only increase moderately as the positive effects of the weak euro dissipate. Growth for 2016 as a whole is expected to be slightly lower than that of the prior year (IMF: 1.5%; Sachverständigenrat 1.5%; IHS: 1.9%).
We are reconfirming the revenue and earnings forecast for full-year 2016 as described in the 2015 Annual Report on page 97.
We are reconfirming the expected financial position for full-year 2016 as described in the 2015 Annual Report, beginning on page 97.
We are similarly reconfirming our forecasts relating to the performance of our other indicators relevant to full-year 2016 performance as described in the 2015 Annual Report on page 98. As in previous years, free cash flow is again expected to more than cover the dividend payment for financial year 2015 scheduled to be made in May 2016, provided the further funding of pension liabilities of around €1 billion is excluded from this measurement.
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 forward-looking 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.
1 January to 31 March
| €m | ||
|---|---|---|
| 2015 | 2016 | |
| Revenue | 14,767 | 13,872 |
| Other operating income | 589 | 548 |
| Total operating income | 15,356 | 14,420 |
| Materials expense | – 8,321 | –7,301 |
| Staff costs | – 4,914 | – 4,921 |
| Depreciation, amortisation and impairment losses | –319 | –326 |
| Other operating expenses | –1,082 | –1,000 |
| Total operating expenses | –14,636 | –13,548 |
| Net income from investments accounted for using the equity method | 0 | 1 |
| Profit from operating activities (EBIT) | 720 | 873 |
| Financial income | 26 | 28 |
| Finance costs | – 93 | – 97 |
| Foreign currency result | 3 | –24 |
| Net finance costs | – 64 | – 93 |
| Profit before income taxes | 656 | 780 |
| Income taxes | –115 | –109 |
| Consolidated net profit for the period | 541 | 671 |
| attributable to Deutsche Post AG shareholders | 495 | 639 |
| attributable to non-controlling interests | 46 | 32 |
| Basic earnings per share (€) | 0.41 | 0.53 |
| Diluted earnings per share (€) | 0.39 | 0.51 |
1 January to 31 March
| €m | ||
|---|---|---|
| 2015 | 2016 | |
| Consolidated net profit for the period | 541 | 671 |
| Items that will not be reclassified to profit or loss | ||
| Change due to remeasurements of net pension provisions | –1,526 | – 977 |
| Other changes in retained earnings | 0 | 0 |
| Income taxes relating to components of other comprehensive income | 42 | 32 |
| Share of other comprehensive income of investments accounted for using the equity method (after tax) | 0 | 0 |
| Total (after tax) | –1,484 | – 945 |
| Items that may be subsequently reclassified to profit or loss IAS 39 revaluation reserve |
||
| Changes from unrealised gains and losses | 33 | –7 |
| Changes from realised gains and losses | 0 | – 63 |
| IAS 39 hedging reserve | ||
| Changes from unrealised gains and losses | –165 | 42 |
| Changes from realised gains and losses | 28 | 8 |
| Currency translation reserve Changes from unrealised gains and losses |
832 | – 441 |
| Changes from realised gains and losses | 0 | 0 |
| Income taxes relating to components of other comprehensive income | 33 | –2 |
| Share of other comprehensive income of investments accounted for using the equity method (after tax) | 1 | 0 |
| Total (after tax) | 762 | – 463 |
| Other comprehensive income (after tax) | –722 | –1,408 |
| Total comprehensive income | –181 | –737 |
| attributable to Deutsche Post AG shareholders | –255 | –759 |
| attributable to non-controlling interests | 74 | 22 |
| €m | 31 Dec. 2015 | 31 March 2016 |
|---|---|---|
| ASSETS | ||
| Intangible assets | 12,490 | 12,221 |
| Property, plant and equipment | 7,795 | 7,790 |
| Investment property | 25 | 20 |
| Investments accounted for using the equity method | 76 | 93 |
| Non-current financial assets | 1,113 | 1,037 |
| Other non-current assets | 221 | 135 |
| Deferred tax assets | 2,007 | 2,008 |
| Non-current assets | 23,727 | 23,304 |
| Inventories | 281 | 303 |
| Current financial assets | 179 | 190 |
| Trade receivables | 7,694 | 7,374 |
| Other current assets | 2,172 | 2,852 |
| Income tax assets | 197 | 194 |
| Cash and cash equivalents | 3,608 | 2,732 |
| Assets held for sale | 12 | 13 |
| Current assets | 14,143 | 13,658 |
| Total ASSETS | 37,870 | 36,962 |
| EQUITY AND LIABILITIES | ||
| Issued capital | 1,211 | 1,211 |
| Capital reserves | 2,385 | 2,420 |
| Other reserves | 11 | – 442 |
| Retained earnings | 7,427 | 7,120 |
| Equity attributable to Deutsche Post AG shareholders | 11,034 | 10,309 |
| Non-controlling interests | 261 | 283 |
| Equity | 11,295 | 10,592 |
| Provisions for pensions and similar obligations | 6,221 | 6,707 |
| Deferred tax liabilities | 142 | 81 |
| Other non-current provisions | 1,512 | 1,483 |
| Non-current provisions | 7,875 | 8,271 |
| Non-current financial liabilities | 4,625 | 4,598 |
| Other non-current liabilities | 234 | 237 |
| Non-current liabilities | 4,859 | 4,835 |
| Non-current provisions and liabilities | 12,734 | 13,106 |
| Current provisions | 1,486 | 1,720 |
| Current financial liabilities | 553 | 553 |
| Trade payables | 7,069 | 5,837 |
| Other current liabilities | 4,255 | 4,617 |
| Income tax liabilities | 476 | 537 |
| Liabilities associated with assets held for sale | 2 | 0 |
| Current liabilities | 12,355 | 11,544 |
| Current provisions and liabilities | 13,841 | 13,264 |
| Total EQUITY AND LIABILITIES | 37,870 | 36,962 |
1 January to 31 March
| €m | ||
|---|---|---|
| 2015 | 2016 | |
| Consolidated net profit for the period attributable to Deutsche Post AG shareholders | 495 | 639 |
| Consolidated net profit for the period attributable to non-controlling interests | 46 | 32 |
| Income taxes | 115 | 109 |
| Net finance costs | 64 | 93 |
| Profit from operating activities (EBIT) | 720 | 873 |
| Depreciation, amortisation and impairment losses | 319 | 326 |
| Net income from disposal of non-current assets | –31 | –72 |
| Non-cash income and expense | 25 | 7 |
| Change in provisions | –140 | –178 |
| Change in other non-current assets and liabilities | – 9 | –15 |
| Dividend received | 0 | 1 |
| Income taxes paid | –147 | – 89 |
| Net cash from operating activities before changes in working capital | 737 | 853 |
| Changes in working capital Inventories |
10 | –29 |
| Receivables and other current assets | – 631 | – 546 |
| Liabilities and other items | –37 | – 490 |
| Net cash from/used in operating activities | 79 | –212 |
| Subsidiaries and other business units | 0 | 0 |
| Property, plant and equipment and intangible assets | 39 | 33 |
| Investments accounted for using the equity method and other investments | 0 | 80 |
| Other non-current financial assets | 6 | 10 |
| Proceeds from disposal of non-current assets | 45 | 123 |
| Subsidiaries and other business units | 0 | 0 |
| Property, plant and equipment and intangible assets | – 565 | – 577 |
| Investments accounted for using the equity method and other investments | 0 | –19 |
| Other non-current financial assets | –29 | –24 |
| Cash paid to acquire non-current assets | – 594 | – 620 |
| Interest received | 12 | 11 |
| Current financial assets | 36 | 19 |
| Net cash used in investing activities | – 501 | – 467 |
| Proceeds from issuance of non-current financial liabilities | 4 | 10 |
| Repayments of non-current financial liabilities | – 9 | –11 |
| Change in current financial liabilities | – 9 | –12 |
| Other financing activities | –27 | – 60 |
| Purchase of treasury shares | –22 | –25 |
| Proceeds from issuing shares or other equity instruments | 0 | 0 |
| Interest paid | 58 | –16 |
| Net cash used in financing activities | – 5 | –114 |
| Net change in cash and cash equivalents | – 427 | –793 |
| Effect of changes in exchange rates on cash and cash equivalents | 95 | – 85 |
| Changes in cash and cash equivalents associated with assets held for sale | 0 | 1 |
| Changes in cash and cash equivalents due to changes in consolidated group | 0 | 1 |
| Cash and cash equivalents at beginning of reporting period | 2,978 | 3,608 |
| Cash and cash equivalents at end of reporting period | 2,646 | 2,732 |
| €m | Other reserves | Equity | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Issued | Capital | IAS 39 revaluation |
IAS 39 hedging |
Currency translation |
Retained | attributable to Deutsche Post AG |
Non controlling |
||
| Balance at 1 January 2015 | capital 1,210 |
reserves 2,339 |
reserve 170 |
reserve –28 |
reserve – 483 |
earnings 6,168 |
shareholders 9,376 |
interests 204 |
Total equity 9,580 |
| Capital transactions with owner | |||||||||
| Dividend | 0 | 0 | –1 | –1 | |||||
| Transactions with non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Changes in non-controlling interests due to changes in consolidated group |
0 | 0 | 0 | ||||||
| Issue of shares or other equity instruments | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Purchase of treasury shares | –1 | 0 | –21 | –22 | 0 | –22 | |||
| Share-based payment schemes (issuance) | 0 | 28 | 0 | 28 | 0 | 28 | |||
| Share-based payment schemes (exercise) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| 6 | –1 | 5 | |||||||
| Total comprehensive income Consolidated net profit for the period |
495 | 495 | 46 | 541 | |||||
| Currency translation differences | 804 | 0 | 804 | 29 | 833 | ||||
| Change due to remeasurements of net pension provisions |
–1,483 | –1,483 | –1 | –1,484 | |||||
| Other changes | 0 | 0 | 25 | – 96 | 0 | –71 | 0 | –71 | |
| –255 | 74 | –181 | |||||||
| Balance at 31 March 2015 | 1,209 | 2,367 | 195 | –124 | 321 | 5,159 | 9,127 | 277 | 9,404 |
| Balance at 1 January 2016 | 1,211 | 2,385 | 67 | – 41 | –15 | 7,427 | 11,034 | 261 | 11,295 |
| Capital transactions with owner Dividend |
0 | 0 | 0 | 0 | |||||
| Transactions with non-controlling interests | 0 | 0 | 0 | –1 | –1 | 0 | –1 | ||
| Changes in non-controlling interests due to changes in consolidated group |
0 | 0 | 0 | ||||||
| Issue of shares or other equity instruments | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Purchase of treasury shares | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Share-based payment schemes (issuance) | 0 | 35 | 0 | 35 | 0 | 35 | |||
| Share-based payment schemes (exercise) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| 34 | 0 | 34 | |||||||
| Total comprehensive income Consolidated net profit for the period |
639 | 639 | 32 | 671 | |||||
| Currency translation differences | – 431 | 0 | – 431 | –10 | – 441 | ||||
| Change due to remeasurements | |||||||||
| of net pension provisions | – 945 | – 945 | 0 | – 945 | |||||
| Other changes | 0 | 0 | – 57 | 35 | 0 | –22 –759 |
0 22 |
–22 –737 |
|
| Balance at 31 March 2016 | 1,211 | 2,420 | 10 | – 6 | – 446 | 7,120 | 10,309 | 283 | 10,592 |
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 2016 and have been reviewed.
The accompanying condensed consolidated interim financial statements as at 31 March 2016 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 2016 are not necessarily an indication of how business will develop in the future.
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 2015.
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.
For further information on the accounting policies applied, please refer to the consolidated financial statements for the year ended 31 December 2015, on which these interim financial statements are based.
Departures from the accounting policies applied in financial year 2015 consist of the new or amended international accounting pronouncements under IFRSs required to be applied for the first time since financial year 2016.
| Standard | Subject matter and significance |
|---|---|
| Amendments to IAS 19, Defined Benefit Plans: Employee Contributions |
The amendments apply to the recognition of employee contributions to defined benefit retirement plans. Their objective is to simplify accounting for employee contributions that are independent of the number of years of service. In such cases, the service cost in the period in which the correspond ing service is rendered may be reduced. The new requirements must be applied retrospectively. Application did not lead to any significant effects. |
| Annual Improvements to IFRSs (2010–2012 Cycle) |
The annual improvement process refers to the following standards: IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24, IAS 37, IAS 38 and IAS 39. The amend ments do not have a significant influence on the consolidated financial statements. |
| Amendments to IAS 16, Property, Plant and Equipment and IAS 38, Intangible Assets: Clari fication of Acceptable Methods of Depreciation and Amortisation |
The amendments expand the existing requirements relating to the permitted depreciation and amortisation methods for intangible assets and for property, plant and equipment. The amendments specify that revenue-based depreciation and amortisation methods are not permitted for property, plant and equipment and may only be used for intangible assets in certain exceptional circumstances. In addition, the amendments clarify that a reduction in the selling price of goods and services could signal obsolescence, which could in turn reflect a reduction in the economic benefits available from the asset. The requirements must be applied prospectively. The effects of this interpretation on the consolidated financial statements are immaterial. |
| Amendments to IFRS 11, Joint Arrangements – Acquisition of Interests in Joint Operations |
The amendment clarifies that the acquisition and additional acquisition of interests in joint operations in which the activity constitutes a business, as defined in IFRS 3, Business Combinations, must be recognised in accordance with the principles governing business combinations accounting in IFRS 3 and other relevant IFRSs, with the exception of those principles that conflict with the requirements of IFRS 11. The amendments do not apply if the reporting entity and the other parties involved are under the common control of the same ultimate controlling party. The new requirements must be applied prospectively. The amendment has no significant effect on the Group. |
| Annual Improvements to IFRSs (2012–2014 Cycle) |
The annual improvement process refers to the following standards: IFRS 5, IFRS 7, IAS 19 and IAS 34. The amendments do not have a significant influence on the consolidated financial statements. |
| Amendments to IAS 1, Presentation of Financial Statements: Disclosure Initiative |
The changes comprise clarifications relating to the materiality of the items presented in all components of IFRS financial statements. Information that is not material need not be presented. This applies even if disclosure is explicitly required in other standards. In addition, the revised version of IAS 1 includes new rules or clarifications of existing requirements concerning the presentation of subtotals, the structure of the notes and the disclosures on accounting policies. The presentation of the interest in equity-accounted investments in other comprehensive income is also clarified. The amendments do not have a significant effect on the financial statements. |
| The following are not relevant for the consolidated financial statements: |
amendments to IAS 27, Equity Method in Separate Financial Statements.
The consolidated group includes all companies controlled by Deutsche Post AG.
The Group companies are consolidated from the date on which Deutsche Post DHL Group 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. 2015 | 31 March 2016 | |
|---|---|---|
| Number of fully consolidated companies (subsidiaries) German |
139 | 139 |
| Foreign | 658 | 659 |
| Number of joint operations German |
1 | 1 |
| Foreign | 1 | 1 |
| Number of investments accounted for using the equity method |
||
| German | 1 | 1 |
| Foreign | 15 | 14 |
In January 2016, Deutsche Post DHL Group acquired a minority interest of 27.5% in French e-commerce logistics specialist Relais Colis. Relais Colis is accounted for in the consolidated financial statements using the equity method. Two companies accounted for using the equity method have been liquidated.
No acquisitions were made in the first quarter of 2016.
Disposal and deconsolidation effects in the first quarter of 2016 were as follows:
| 1 January to 31 March nugg.ad GmbH Non-current assets Current assets Cash and cash equivalents ASSETS Non-current provisions and liabilities Current provisions and liabilities EQUITY AND LIABILITIES Net assets |
|
|---|---|
| 0 | |
| 2 | |
| 3 | |
| 5 | |
| 0 | |
| 2 | |
| 2 | |
| 3 | |
| Total consideration received | 3 |
| Gains/losses from the currency translation reserve | 0 |
| Non-controlling interests | 0 |
| Deconsolidation gain (+)/loss (–) | 0 |
In January 2016, Deutsche Post DHL Group sold all of its shares in e-commerce company nugg.ad GmbH, Germany, to Zalando Media Solutions GmbH. The assets and liabilities had previously been reclassified as assets held for sale and liabilities associated with assets held for sale in accordance with IFRS 5. The most recent measurement prior to reclassification did not indicate any impairment.
In the first quarter of 2016, the remaining shares in the property development companies King's Cross Central Property Trust and King's Cross Central General Partner Ltd. (King's Cross companies), UK, were sold. The gains on the disposal of the shares are reported in other operating income, Note 4.
Pension provisions increased substantially in the first quarter of 2016. This increase is due largely to the decrease in discount rates, which was recognised directly in equity. An offsetting measurement-related reversal resulted from changes in the occupational retirement arrangement in Germany. A number of other human resources measures (early retirement scheme for civil servants, etc.) mean that, overall, there is no effect on earnings.
| €m | ||
|---|---|---|
| Q1 2015 | Q1 2016 | |
| Gains on disposal of non-current assets | 37 | 78 |
| Income from the reversal of provisions | 82 | 66 |
| Income from currency translation | 118 | 57 |
| Insurance income | 44 | 49 |
| Reversals of impairment losses on receivables and other assets |
19 | 31 |
| Income from fees and reimbursements | 34 | 29 |
| Rental and lease income | 27 | 26 |
| Commission income | 24 | 26 |
| Income from work performed and capitalised | 29 | 16 |
| Income from derivatives | 11 | 12 |
| Income from the remeasurement of liabilities | 6 | 12 |
| Income from prior-period billings | 10 | 9 |
| Income from loss compensation | 7 | 6 |
| Income from the derecognition of liabilities | 5 | 4 |
| Recoveries on receivables previously written off | 2 | 3 |
| Subsidies | 1 | 1 |
| Miscellaneous | 133 | 123 |
| Total | 589 | 548 |
Of the gains on the disposal of non-current assets, €63 million relates to the sale of the shares in the King's Cross companies in the UK.
The decrease in currency translation gains is due largely to the change in the exchange rate for the euro.
Miscellaneous other operating income includes a large number of smaller individual items.
€2 million of the total depreciation, amortisation and impairment losses of €326 million relates to impairment losses on property, plant and equipment in the Supply Chain segment. In the prior-year period, the depreciation, amortisation and impairment losses item did not include any impairment losses.
| €m | ||
|---|---|---|
| Q1 2015 | Q1 2016 | |
| Cost of purchased cleaning and security services | 89 | 88 |
| Insurance costs | 78 | 86 |
| Expenses for advertising and public relations | 78 | 75 |
| Travel and training costs | 78 | 71 |
| Warranty expenses, refunds and compensation payments |
65 | 71 |
| Other business taxes | 61 | 61 |
| Currency translation expenses | 109 | 57 |
| Telecommunication costs | 59 | 57 |
| Write-downs of current assets | 47 | 46 |
| Office supplies | 46 | 38 |
| Consulting costs (including tax advice) | 44 | 32 |
| Entertainment and corporate hospitality expenses | 32 | 30 |
| Services provided by Bundesanstalt für Post und Telekommunikation (German federal post |
||
| and telecommunications agency) | 27 | 26 |
| Customs clearance-related charges | 25 | 25 |
| Contributions and fees | 24 | 25 |
| Voluntary social benefits | 21 | 18 |
| Legal costs | 12 | 17 |
| Commissions paid | 15 | 16 |
| Expenses from derivatives | 36 | 15 |
| Monetary transaction costs | 11 | 11 |
| Audit costs | 8 | 8 |
| Donations | 7 | 7 |
| Losses on disposal of assets | 5 | 5 |
| Prior-period other operating expenses | 6 | 4 |
| Miscellaneous | 99 | 111 |
| Total | 1,082 | 1,000 |
The decrease in currency translation expenses is due primarily to the change in the exchange rate for the euro.
Miscellaneous other operating expenses include a large number of smaller individual items.
Basic earnings per share in the reporting period were €0.53 (previous year: €0.41).
| Basic earnings per share | € | 0.41 | 0.53 |
|---|---|---|---|
| Weighted average number of shares outstanding |
number | 1,209,422,789 | 1,211,185,094 |
| Consolidated net profit for the period attributable to Deutsche Post AG shareholders |
€m | 495 | 639 |
| Q1 2015 | Q1 2016 |
Diluted earnings per share in the reporting period were €0.51 (previous year: €0.39).
| Q1 2015 | Q1 2016 | ||
|---|---|---|---|
| Consolidated net profit for the period attributable to Deutsche Post AG shareholders |
€m | 495 | 639 |
| Plus interest expense on convertible bond |
€m | 1 | 1 |
| Less income taxes | €m | 01 | 01 |
| Adjusted consolidated net profit for the period attributable to Deutsche Post AG shareholders |
€m | 496 | 640 |
| Weighted average number of shares outstanding |
number | 1,209,422,789 | 1,211,185,094 |
| Potentially dilutive shares | number | 54,767,318 | 52,154,921 |
| Weighted average number of shares for diluted earnings |
number | 1,264,190,107 | 1,263,340,015 |
| Diluted earnings per share | € | 0.39 | 0.51 |
1 Rounded below €1 million.
Investments in intangible assets (not including goodwill) and property, plant and equipment amounted to €411 million in the first quarter of 2016 (previous year: €274 million).
| €m | ||
|---|---|---|
| 31 March 2015 | 31 March 2016 | |
| Intangible assets (not including goodwill) | 54 | 33 |
| Property, plant and equipment | ||
| Land and buildings (incl. leasehold improvements) | 11 | 17 |
| Technical equipment and machinery | 12 | 18 |
| Transport equipment | 10 | 32 |
| Aircraft | 14 | 19 |
| IT equipment | 21 | 14 |
| Operating and office equipment | 13 | 21 |
| Advance payments and assets under development | 139 | 257 |
| 220 | 378 | |
| Total | 274 | 411 |
Goodwill changed as follows in the reporting period:
| €m | ||
|---|---|---|
| 2015 | 2016 | |
| Cost Balance at 1 January |
12,247 | 12,704 |
| Disposals | – 4 | 0 |
| Currency translation differences | 461 | –251 |
| Balance at 31 December/31 March | 12,704 | 12,453 |
| Depreciation, amortisation and impairment losses Balance at 1 January |
1,138 | 1,159 |
| Disposals | –1 | 0 |
| Currency translation differences | 22 | –22 |
| Balance at 31 December/31 March | 1,159 | 1,137 |
| Carrying amount at 31 December/31 March | 11,545 | 11,316 |
The change in goodwill in the first quarter of 2016 is due solely to currency translation differences.
The amounts reported under this balance sheet item relate mainly to the following:
| €m | Assets | Liabilities | ||
|---|---|---|---|---|
| 31 Dec. 2015 | 31 March 2016 | 31 Dec. 2015 | 31 March 2016 | |
| Exel Inc., USA – real estate (Supply Chain segment) | 6 | 6 | 0 | 0 |
| DHL Supply Chain Ltd., United Kingdom – technical equipment (Supply Chain segment) | 0 | 4 | 0 | 0 |
| Güll GmbH, Germany, and Presse-Service Güll GmbH, Switzerland – equity interests (PeP segment) | 3 | 3 | 0 | 0 |
| nugg.ad GmbH, Germany – equity interest (PeP segment) | 3 | 0 | 2 | 0 |
| Other | 0 | 0 | 0 | 0 |
| Assets held for sale and liabilities associated with assets held for sale | 12 | 13 | 2 | 0 |
The company plans to sell properties. The most recent measurement prior to reclassification, which was made in 2015, did not lead to any impairment loss being recognised.
The company intends to sell an automated co-packing production plant and operating facility. The most recent measurement prior to reclassification did not lead to any impairment loss being recognised.
The Group plans to sell Güll GmbH, Germany, and Presse-Service Güll GmbH, Switzerland, which are both accounted for using the equity method. The Group holds 51% of the shares of each of these joint ventures. The investments were reclassified in 2015 as assets held for sale in the amount of €3 million. The most recent measurement prior to reclassification led to an impairment loss of €2 million.
The sale of nugg.ad GmbH, Germany, the e-commerce company, was completed in Q1 2016, Note 2.
The aircraft sales planned by DHL Aviation (Netherlands) B.V., the Netherlands, European Air Transport Leipzig GmbH, Germany, and DHL International GmbH, Germany, are reported under Other. As part of early fleet renewal activities, the number of legacy aircraft is to be reduced. Prior to reclassification in financial year 2015, an impairment loss of €12 million was recognised on the reclassified aircraft.
KfW Bankengruppe (KfW) held a 21% interest in the share capital of Deutsche Post AG as at 31 March 2016. The remaining 79% of the shares are in free float.
KfW holds the shares in trust for the Federal Republic of Germany.
| Changes in issued capital and treasury shares | |||
|---|---|---|---|
| € | ||
|---|---|---|
| 2015 | 2016 | |
| Issued capital | ||
| Balance at 1 January | 1,211,180,262 | 1,212,753,687 |
| Addition due to capital increase | 1,568,593 | 0 |
| Addition due to contingent capital increase (convertible bond) |
4,832 | 0 |
| Balance at 31 December/31 March | 1,212,753,687 | 1,212,753,687 |
| Treasury shares | ||
| Balance at 1 January | –1,507,473 | –1,568,593 |
| Treasury shares acquired | –2,628,575 | 0 |
| Treasury shares sold | 14,992 | 0 |
| Treasury shares issued | 2,552,463 | 0 |
| Balance at 31 December/31 March | –1,568,593 | –1,568,593 |
| Total at 31 December/31 March | 1,211,185,094 | 1,211,185,094 |
The issued capital recorded in the commercial register is composed of 1,212,753,687 no-par value registered shares (ordinary shares) with a notional interest in the share capital of €1.00 per share, and is fully paid up.
Deutsche Post AG held 1,568,593 treasury shares as at 31 March 2016.
An amount of €35 million was added to the capital reserves in the period up to 31 March 2016 for share-based payment systems.
| €m | ||
|---|---|---|
| 2015 | 2016 | |
| Capital reserves at 1 January | 2,339 | 2,385 |
| Share Matching Scheme | ||
| Addition | 47 | 31 |
| Exercise | – 48 | 0 |
| Total for Share Matching Scheme | –1 | 31 |
| Performance Share Plan | ||
| Addition | 10 | 4 |
| Total for Performance Share Plan | 10 | 4 |
| Capital increases | 37 | 0 |
| Capital reserves at 31 December/31 March | 2,385 | 2,420 |
In April 2016, the rights to matching shares under the 2011 tranche will be settled and rights to incentive and investment shares under the 2015 tranche granted.
Changes in retained earnings are presented in the statement of changes in equity.
| €m | ||
|---|---|---|
| 2015 | 2016 | |
| Retained earnings at 1 January | 6,168 | 7,427 |
| Dividend payment | –1,030 | 0 |
| Consolidated net profit for the period | 1,540 | 639 |
| Change due to remeasurements of net pension provisions |
773 | – 945 |
| Transactions with non-controlling interests | –3 | –1 |
| Miscellaneous other changes | –21 | 0 |
| Retained earnings at 31 December/31 March | 7,427 | 7,120 |
| €m | Global Forwarding, | Corporate Center/ | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PeP | Express | Freight | Supply Chain | Other | Consolidation1 | Group | ||||||||
| 1 Jan. to 31 March | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 |
| External revenue | 4,066 | 4,173 | 3,146 | 3,158 | 3,615 | 3,152 | 3,919 | 3,367 | 21 | 22 | 0 | 0 | 14,767 | 13,872 |
| Internal revenue | 35 | 28 | 94 | 93 | 174 | 175 | 23 | 26 | 291 | 284 | – 617 | – 606 | 0 | 0 |
| Total revenue | 4,101 | 4,201 | 3,240 | 3,251 | 3,789 | 3,327 | 3,942 | 3,393 | 312 | 306 | – 617 | – 606 | 14,767 | 13,872 |
| Profit/loss from operating activities (EBIT) |
399 | 412 | 332 | 357 | 17 | 51 | 53 | 127 | – 81 | –72 | 0 | –2 | 720 | 873 |
| of which net income from investments accounted for using the equity method |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Segment assets2, 3 | 5,532 | 5,878 | 9,337 | 9,289 | 7,998 | 7,821 | 6,418 | 6,293 | 1,571 | 1,705 | – 83 | – 84 | 30,773 | 30,902 |
| of which invest ments accounted for using the equity method |
1 | 20 | 46 | 46 | 25 | 24 | 3 | 3 | 0 | 0 | 1 | 0 | 76 | 93 |
| Segment liabilities2, 3 |
2,697 | 2,716 | 3,508 | 3,129 | 3,141 | 2,851 | 3,372 | 3,076 | 1,496 | 1,478 | – 59 | – 60 | 14,155 | 13,190 |
| Segment assets/ liabilities, net |
2,835 | 3,162 | 5,829 | 6,160 | 4,857 | 4,970 | 3,046 | 3,217 | 75 | 227 | –24 | –24 | 16,618 | 17,712 |
| Capex | 64 | 74 | 75 | 191 | 40 | 10 | 73 | 100 | 22 | 37 | 0 | –1 | 274 | 411 |
| Depreciation and amortisation |
76 | 77 | 91 | 104 | 23 | 20 | 73 | 72 | 57 | 51 | –1 | 0 | 319 | 324 |
| Impairment losses |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Total depreciation, amortisation and impairment losses |
76 | 77 | 91 | 104 | 23 | 20 | 73 | 74 | 57 | 51 | –1 | 0 | 319 | 326 |
| Other non-cash income and |
||||||||||||||
| expenses2 Employees4 |
28 169,430 |
42 168,893 |
75 79,318 |
48 82,685 |
39 44,588 |
15 43,150 |
91 145,827 |
84 145,593 |
39 10,747 |
15 10,816 |
1 0 |
0 0 |
273 449,910 |
204 451,137 |
1 Including rounding.
2 Prior-period amounts adjusted.
3 As at 31 December 2015 and 31 March 2016.
4 Average FTEs; prior-period amount corresponds to that of financial year 2015.
| €m | Europe | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Germany | (excluding Germany) | Americas | Asia Pacific | Other regions | Group | |||||||
| 1 Jan. to 31 March | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 |
| External revenue | 4,447 | 4,480 | 4,710 | 4,134 | 2,537 | 2,398 | 2,473 | 2,304 | 600 | 556 | 14,767 | 13,872 |
| Non-current assets1 | 5,298 | 5,306 | 7,264 | 6,972 | 3,876 | 3,971 | 3,553 | 3,475 | 390 | 377 | 20,381 | 20,101 |
| Capex | 129 | 164 | 45 | 123 | 61 | 82 | 31 | 36 | 8 | 6 | 274 | 411 |
1 As at 31 December 2015 and 31 March 2016.
Segment reporting has been adapted in line with internal reporting. The prior-period amounts have been adjusted accordingly.
Deutsche Post DHL Group 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 Group's top management.
As part of the central management of currency risk, Corporate Treasury is responsible for deciding on the central absorption of fluctuations between projected and actual exchange rates 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 using 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 capital expenditure (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. Non-current assets primarily comprise intangible assets, property, plant and equipment and other non-current assets.
| €m | ||
|---|---|---|
| Q1 2015 | Q1 2016 | |
| Total income of reportable segments | 801 | 947 |
| Corporate Center/Other | – 81 | –72 |
| Reconciliation to Group/Consolidation | 0 | –2 |
| Profit from operating activities (EBIT) | 720 | 873 |
| Net finance costs | – 64 | – 93 |
| Profit before income taxes | 656 | 780 |
| Income taxes | –115 | –109 |
| Consolidated net profit for the period | 541 | 671 |
The following table presents financial instruments recognised at fair value and financial instruments whose fair value is required to be disclosed, both presented by the level in the fair value hierarchy to which they are assigned.
The simplification option under IFRS 7.29a was exercised for cash and cash equivalents, trade receivables, other assets, trade payables and other liabilities with predominantly short maturities. 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.
| €m | ||||
|---|---|---|---|---|
| Class | Level 11 | Level 22 | Level 33 | Total |
| 31 March 2016 | ||||
| Financial assets | ||||
| Non-current financial assets | 19 | 1,008 | 0 | 1,027 |
| Current financial assets | 0 | 78 | 0 | 78 |
| Total | 19 | 1,086 | 0 | 1,105 |
| Financial liabilities | ||||
| Non-current liabilities | 4,908 | 295 | 0 | 5,203 |
| Current liabilities | 0 | 136 | 0 | 136 |
| Total | 4,908 | 431 | 0 | 5,339 |
| 31 December 2015 | ||||
| Financial assets | ||||
| Non-current financial assets | 153 | 866 | 83 | 1,102 |
| Current financial assets | 27 | 42 | 0 | 69 |
| Total | 180 | 908 | 83 | 1,171 |
| Financial liabilities | ||||
| Non-current liabilities | 4,232 | 338 | 0 | 4,570 |
| Current liabilities | 0 | 107 | 0 | 107 |
| Total | 4,232 | 445 | 0 | 4,677 |
1 Quoted prices for identical instruments in active markets.
2 Inputs other than quoted market prices that are directly or indirectly observable for instruments.
3 Inputs not based on observable market data.
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 the 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 derivatives associated with M&A transactions. These options are measured using recognised valuation models, taking plausible assumptions into account. The fair values of the derivatives 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.
The table below shows the effect on net gains and losses of the financial instruments categorised within Level 3 as at 31 March 2016:
| €m | 2015 | 2016 | |||||
|---|---|---|---|---|---|---|---|
| Assets | Liabilities | Assets | Liabilities | ||||
| Equity instruments | Debt instruments | Derivatives, of which equity derivatives |
Equity instruments | Debt instruments | Derivatives, of which equity derivatives |
||
| Balance at 1 January | 132 | 0 | 1 | 83 | 0 | 0 | |
| Gains and losses (recognised in profit and loss)1 | 0 | 0 | –1 | 0 | 0 | 0 | |
| Gains and losses (recognised in OCI) 2 |
38 | 0 | 0 | 0 | 0 | 0 | |
| Additions | 0 | 0 | 0 | 0 | 0 | 0 | |
| Disposals | – 95 | 0 | 0 | – 80 | 0 | 0 | |
| Currency translation effects | 8 | 0 | 0 | –3 | 0 | 0 | |
| Balance at 31 December/31 March | 83 | 0 | 0 | 0 | 0 | 0 |
1 Fair value losses are recognised in finance costs, fair value gains in financial income.
2 Unrealised gains and losses are recognised in the IAS 39 revaluation reserve.
Available-for-sale financial assets include shares in partnerships and corporations in the amount of €10 million (31 December 2015: €11 million). No active market exists for these instruments. As future cash flows cannot be reliably determined, fair value cannot be determined using valuation techniques. There are no plans to sell or derecognise significant shares of the available-for-sale financial assets reported as at 31 March 2016 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 Group's contingent liabilities and other financial obligations have not changed significantly compared with 31 December 2015.
There were no significant changes in related party disclosures as against 31 December 2015.
On 1 March 2016, the Board of Management of Deutsche Post AG resolved a share buyback programme for up to 60 million shares of Deutsche Post AG at a total purchase price (not including transaction costs) of up to €1 billion. The purchased shares will either be retired, used to service long-term executive remuneration plans or used to meet potential obligations if rights accruing under the 2012/2019 convertible bond are exercised. The buyback began on 1 April 2016 and will last for a maximum of one year. The buyback programme is based on the authorisation resolved by the company's Annual General Meeting on 27 May 2014.
The Group also placed two senior bonds with a total volume of €1.25 billion with national and international investors. The date of issue was 1 April 2016. The capital raised will largely be used for the further funding of pension liabilities. The first bond has a term of five years, a volume of €750 million and an annual coupon of 0.375%. The second bond has a volume of €500 million, a term of ten years and an annual coupon of 1.250%.
There were no other 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, 10 May 2016
Deutsche Post AG The Board of Management
Dr Frank Appel Ken Allen
Jürgen Gerdes John Gilbert
Melanie Kreis Lawrence Rosen
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 2016, which are part of the quarterly financial report pursuant to section 37w 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.
Düsseldorf, 10 May 2016
PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
Gerd Eggemann Verena Heineke Wirtschaftsprüfer Wirtschaftsprüferin
(German public auditor) (German public auditor)
Investor Relations Tel.: + 49 (0) 228 182-6 36 36 Fax: + 49 (0) 228 182-6 31 99 E-mail: ir @ dpdhl.com
Published on 11 May 2016.
The English version of the Interim Report as at 31 March 2016 of Deutsche Post DHL Group 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. Deutsche Post Corporate Language Services et al.
Tel.: + 49 (0) 228 182-99 44 Fax: + 49 (0) 228 182-98 80 E-mail: pressestelle @ dpdhl.com
External E-mail: ir @ dpdhl.com dpdhl.com/en/investors
Internal GeT and DHL Webshop Mat. no. 675-602-405
MAY 2016 Annual General Meeting (Frankfurt am Main)
MAY Dividend payment
AUGUST Interim Report as at 30 June 2016
NOVEMBER Interim Report as at 30 September 2016
MARCH 2016 Annual Report
APRIL 2017 Annual General Meeting (Bochum)
MAY Dividend payment
MAY Interim Report as at 31 March 2017
AUGUST Interim Report as at 30 June 2017
NOVEMBER Interim Report as at 30 September 2017 Deutsche Post ag Headquarters Investor Relations 53250 Bonn Germany
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