AI Terminal

MODULE: AI_ANALYST
Interactive Q&A, Risk Assessment, Summarization
MODULE: DATA_EXTRACT
Excel Export, XBRL Parsing, Table Digitization
MODULE: PEER_COMP
Sector Benchmarking, Sentiment Analysis
SYSTEM ACCESS LOCKED
Authenticate / Register Log In

Deutsche Post AG

Quarterly Report Nov 19, 2019

111_10-q_2019-11-19_9f0265ca-bb3b-4cfc-89bf-ec99270d03d5.pdf

Quarterly Report

Open in Viewer

Opens in native device viewer

Interim Report

as at 30 September 2019 3|19

2 INTERIM GROUP MANAGEMENT REPORT

15 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Selected key figures

+ / – %
€m 44,624 46,385 3.9 14,849 15,552 4.7
€m 2,028 2,870 41.5 376 942 >100
% 4.5 6.2 2.5 6.1
€m 207 914 >100 –245 277 >100
€m 1,262 1,765 39.9 146 561 >100
€m –248 –296 –19.4 143 507 >100
€m 12,303 14,492 17.8
1.03 1.43 38.8 0.12 0.45 >100
547,459 543,715 – 0.7
9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019

1 EBIT/revenue.

2 After deduction of non-controlling interests.

3 Prior-period amount as at 31 December, for the calculation page 8 of the Interim Group Management Report.

4 Basic earnings per share.

5 Headcount at the end of the quarter, including trainees; prior-period number as at 31 December.

GENERAL INFORMATION

Organisation

As announced at the end of June, John Gilbert resigned from the Board of Management with effect from 30 September 2019. Since 1 October 2019, the Supply Chain board department has been led by Oscar de Bok.

In September, the Supervisory Board extended Thomas Ogilvie's contract for five years until August 2025. He is the Labour Director and Board of Management member responsible for Human Resources and Corporate Incubations.

Research and development

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 reportin this connection.

REPORT ON ECONOMIC POSITION

Economic parameters

The pace of global economic growth has been weak at best since the beginning of 2019. Most recently, the renewed escalation of the trade conflict between the United States and China as well as the attacks on Saudi oil facilities have weighed on growth. Chinese economic expansion has also continued to slow.

Growth in the United States during the third quarter of 2019 was weaker compared with the previous year. The US Federal Reserve countered the emerging growth risks with two small interest rate cuts that lowered the key interest rate corridor to between 1.75 % and 2.00 %.

The eurozone maintained the growth pattern of prior quarters – robust fixed investment amid weaker consumer spending – although the pace of growth slackened. The European Central Bank (ECB) reacted to the weaker economic climate and cut its key interest rate to –0.50 %.

In Germany, foreign trade weighed on growth, whilst domestic demand, and consumer spending in particular, still grew solidly. These diverging trends in the German economy were reflected in business sentiment. Although the ifo German Business Climate Index edged up slightly in September, it remained below its longterm average.

The pace of global economic growth has been weak at best.

Significant events

In February, we completed the sale of our Supply Chain business in China, Hong Kong and Macao in return for a net payment of €653 million.

In the third quarter, we began offering an extended group of employees in Germany the option oftaking a lump-sum payment rather than receiving a lifetime pension under our occupational pension plan. This resulted in income of €106 million from the remeasurement of pension obligations, most of which was compensated forin restructuring the Post & Parcel Germany division.

As at 30 September 2019, restructuring expenses of €264 million net had been incurred for measures intended to improve earnings.

Results of operations

Portfolio largely unchanged

Beyond the sale of the Supply Chain business in China, our portfolio did not change significantly in the period under review.

Selected indicators for results of operations

9 M 2018 9 M 2019 Q 3 2018 Q 3 2019
Revenue € m 44,624 46,385 14,849 15,552
Profit from operating activities (EBIT) € m 2,028 2,870 376 942
Return on sales 1 % 4.5 6.2 2.5 6.1
EBIT after asset charge (EAC) € m 207 914 –245 277
Consolidated net profit for the period 2 € m 1,262 1,765 146 561
Earnings per share 3 1.03 1.43 0.12 0.45

1 EBIT / revenue.

2 After deduction of non-controlling interests. 3 Basic earnings per share.

Consolidated revenue also increases due to currency effects

In the first nine months of 2019, consolidated revenue rose by €1,761 million to €46,385 million, for reasons including positive currency effects of €547 million. The proportion of revenue generated abroad increased from 69.5 % to 70.1 %. Revenue for the third quarter was up by €703 million to €15,552 million. It was also increased by currency effects of €240 million.

Above all, income of €439 million from the sale of the Supply Chain business in China drove up other operating income considerably to €1,787 million.

Revenue Q 3 2019

15,552 € m
Q 3 2018 Change
14,849 + 4.7 %

year (€3,275 million). In the reporting period, this item included restructuring expenses in the Post & Parcel Germany, Supply Chain and eCommerce Solutions divisions, whilst in the previous year there was a negative effect from customer contracts.

Consolidated EBIT improves substantially

In the first nine months of 2019, profit from operating activities (EBIT) rose 41.5 % to €2,870 million, well above the previous year's figure (€2,028 million). Higher interest expense on lease liabilities, amongst otherthings, caused net finance costs to grow from €–429 million to €–474 million. Profit before income taxes grew by €797 million to €2,396 million. Income taxes were up by €303 million to €527 million due to a higher tax rate, amongst other things.

EBIT Q 3
2019
€ m
942
Change Q 3 2018
>100 % 376

Increase in staff costs

In addition to transport costs, currency effects above all increased materials expense from €23,025 million to €23,459 million. At €16,021 million, staff costs were up €559 million over the previous year's figure, due primarily to an increased headcount and the collective wage increase in Germany. The previous year's figure included expenses of €400 million for the early retirement programme in what is now the Post & Parcel Germany division. Depreciation, amortisation and impairment losses also greatly exceeded the previous year's level (€2,414 million) to reach €2,718 million, due in part to investments, which markedly increased leased property, plant and equipment. Other operating expenses totalled €3,293 million, up slightly from the previous

Consolidated net profit well over prior-year figure

In the first nine months of 2019, consolidated net profit amounted to €1,869 million, significantly higher than the previous year's figure (€1,375 million). Of this amount, €1,765 million is attributable to Deutsche Post AG shareholders and €104 million to non-controlling interest shareholders. Basic earnings per share improved from €1.03 to €1.43 and diluted earnings per share from €1.01 to €1.41.

Changes in revenue, other operating income and operating expenses, 9M 2019

€ m + / – %
46,385 3.9 • Currency effects increase figure by €547 million
1,787 35.5 • Includes income of €439 million from the sale of the Supply Chain business in China
23,459 1.9 • Currency effects increase figure by €402 million
• Higher transport costs
16,021 3.6 • Rise in headcount
• Currency effects increase figure by €166 million
• The prior-year figure included expenses of €400 million for the early retirement
programme in the Post & Parcel ­Germany division.
• The prior-year figure included income from the remeasurement of pension obligations
totalling €108 million; this figure was €106 million in the reporting period.
• Collective wage increase in ­Germany as at 1 October 2018
2,718 12.6 • Investment-related increase in leased property, plant and equipment
3,293 0.5 • Prior-year figure included a negative effect of €49 million from customer contracts
• Include restructuring expenses of €134 million in the Post & Parcel ­Germany, Supply
Chain and eCommerce Solutions divisions in the reporting period

Higher EBIT after asset charge (EAC)

EAC rose from €207 million to €914 million in the first nine months of 2019. The increase was attributable to the significant rise in EBIT as well as a higher imputed asset charge, due in particular to investments in property, plant and equipment in the Express division.

EBIT after asset charge (EAC)

EAC 207 914 >100
Asset charge –1,821 –1,956 –7.4
EBIT 2,028 2,870 41.5
9 M 2018 9 M 2019 + / – %
€ m

Financial position

Selected cash flow indicators

€ m
9 M 2018 9 M 2019 Q 3 2018 Q 3 2019
Cash and cash equivalents as at 30 September 2,228 2,230 2,228 2,230
Change in cash and cash equivalents – 829 – 857 260 – 6
Net cash from operating activities 3,144 3,386 1,421 1,869
Net cash used in investing activities –1,296 –1,045 –716 –750
Net cash used in financing activities –2,677 –3,198 – 445 –1,125

Liquidity situation remains solid

The principles and aims of our financial management as presented in the 2018 Annual Report beginning on page 43 remain valid and are pursued as part of our finance strategy.

The FFO to debt performance metric decreased in the first nine months of 2019 compared with the figure as at 31 December 2018 because debt increased. Reported financial liabilities increased, mainly as a result of an increase in short-term loans and higher lease liabilities. The adjustment for pensions rose due to an increase in pension obligations, despite the rise in plan assets. Surplus cash and near-cash investments declined, due primarily to the dividend paid for financial year 2018 and negative free cash flow recognised in the first nine months of the year. This line item contains the net proceeds of €653 million from the sale of the Supply Chain business in China and payments for the renewal of the Express intercontinental aircraft fleet totalling €988 million.

FFO to debt

€ m
1 Oct.
1 Jan. to 2018 to
31 Dec. 30 Sept.
2018 2019
Operating cash flow before changes in working
capital 6,079 6,026
Interest received 52 72
Interest paid 526 600
Adjustment for pensions 309 248
Funds from operations, FFO 5,914 5,746
Reported financial liabilities 1 16,462 17,219
Financial liabilities at fair value through
profit or loss 1 38 29
Adjustment for pensions 1 4,110 6,145
Surplus cash and near-cash investments 1, 2 2,683 1,053
Debt 17,851 22,282
FFO to debt (%) 33.1 25.8

1 As at 31 December 2018 and 30 September 2019, respectively.

2 Reported cash and cash equivalents and investment funds callable at sight, less cash needed for operations.

Our credit quality as rated by Fitch Ratings and Moody's Investors Service has not changed from the ratings described and projected in the 2018 Annual Report on page 45. In view of our solid liquidity, the five-year syndicated credit facility with a total volume of €2 billion was not drawn upon during the reporting period. On 30 September 2019, the Group had cash and cash equivalents of €2.2 billion.

Higher capital expenditure for assets acquired

Investments in acquired property, plant and equipment and intangible assets (notincluding goodwill) amounted to €2,572 million in the first nine months of 2019 (previous year: €1,703 million). Please refer to notes 10 and 15 for a breakdown of capex into asset classes and regions.

In the Post & Parcel Germany division, the largest capex portion was attributable to the expansion of our network.

Investments in the Express division related to buildings and technical equipment. Capital spending also focussed upon continuous maintenance and renewal of our aircraft fleet, including further advance payments for the renewal of the Express intercontinental aircraft fleet.

In the Global Forwarding, Freight division, we invested in warehouses, office buildings and IT.

In the Supply Chain division, the majority of funds were invested to support new business, mostly in the Americas and EMEA (Europe, Middle East and Africa).

In the eCommerce Solutions division, most of the capital expenditure was attributable to infrastructure projects in the Netherlands and Poland. Investments were also made in India.

Capital expenditure increased in the Corporate Functions division, where funds were invested in the vehicle fleet, IT equipment and expanding production of StreetScooter electric vehicles.

Capex and depreciation, amortisation and impairment losses, 9M

Post & Parcel
Germany
adjusted 1
Express
Global
Forwarding,
Freight
eCommerce
Solutions
Corporate
Supply Chain
adjusted 1
Functions
Consolidation 2
Group
2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019
Capex (€ m)
relating
to assets
acquired
427 285 679 1,523 75 73 200 231 114 80 179 382 29 –2 1,703 2,572
Capex (€ m)
relating
to leased
assets
1 27 637 724 121 105 589 421 94 84 375 622 –1 0 1,816 1,983
Total (€ m) 428 312 1,316 2,247 196 178 789 652 208 164 554 1,004 28 –2 3,519 4,555
Depreciation,
amortisation
and
impairment
losses (€ m)
224 227 840 969 173 189 609 680 109 159 459 494 0 0 2,414 2,718
Ratio of total
capex to
depreciation,
amortisation
and
impairment
losses 1.91 1.37 1.57 2.32 1.13 0.94 1.30 0.96 1.91 1.03 1.21 2.03 1.46 1.68

1 Note 15.

2 Including rounding.

Capex and depreciation, amortisation and impairment losses, Q 3

Post & Parcel Global eCommerce
Germany
adjusted 1
Express Forwarding,
Freight
Supply Chain Solutions
adjusted 1
Corporate
Functions
Consolidation 2 Group
2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019
Capex (€ m)
relating
to assets
acquired
172 98 381 472 30 22 63 80 54 23 99 159 28 0 827 854
Capex (€ m)
relating
to leased
assets
0 1 352 184 41 23 210 146 47 37 64 345 –1 0 713 736
Total (€ m) 172 99 733 656 71 45 273 226 101 60 163 504 27 0 1,540 1,590
Depreciation,
amortisation
and
impairment
losses (€ m)
81 78 291 334 59 62 213 221 38 54 156 169 0 –1 838 917
Ratio of total
capex to
depreciation,
amortisation
and
impairment
losses 2.12 1.27 2.52 1.96 1.20 0.73 1.28 1.02 2.66 1.11 1.04 2.98 1.84 1.73

1 Note 15.

2 Including rounding.

Higher operating cash flow

Net cash from operating activities increased year-on-year by €242 million to €3,386 million in the first nine months of 2019. Based upon EBIT, which at €2,870 million was well over the previous year's figure (€2,028 million), all non-cash income and expense items were adjusted. The payments resulting from the sale of the Supply Chain business in China are shown in net cash from / used in investing activities. The cash outflow from changes in working capital was down from €1,038 million to €743 million, due primarily to a decrease in the cash outflow from the build-up of inventories.

Net cash used in investing activities decreased from €1,296 million to €1,045 million. The key factor here was net proceeds from the sale of the Supply Chain business in China amounting to €653 million. The cash outflow to acquire property, plant and equipment and intangible assets was €881 million higher than in the previous year, at €2,679 million. Payments for the renewal of the Express intercontinental aircraft fleet have totalled €988 million in financial year 2019 to date. In contrast, the sale of money marketfunds increased proceeds from current financial assets by €309 million to €782 million.

In addition to these effects, greater cash funds were required for leases. Free cash flow decreased from €–248 million to €–296 million.

At €3,198 million, net cash used in financing activities was up €521 million, much higher than in the previous year (€2,677 million). In the previous year, we had issued promissory note loans totalling €500 million. In the reporting period, we repaid €265 million of this amount early, whilst also taking out loans of €527 million.

Cash and cash equivalents declined from €3,017 million as at 31 December 2018 to €2,230 million as at 30 September 2019.

Calculation of free cash flow

€ m
9 M 2018 9 M 2019 Q 3 2018 Q 3 2019
Net cash from operating activities 3,144 3,386 1,421 1,869
Sale of property, plant and equipment and intangible assets 46 104 1 15
Acquisition of property, plant and equipment and intangible assets –1,798 –2,679 –733 – 816
Cash outflow from change in property, plant and equipment and intangible assets –1,752 –2,575 –732 – 801
Disposals of subsidiaries and other business units 5 678 5 21
Disposals of investments accounted for using the equity method and other investments 0 0 0 0
Acquisition of subsidiaries and other business units – 58 –14 –7 – 6
Acquisition of investments accounted for using the equity method and other investments –33 – 8 – 4 1
Cash outflow / inflow from acquisitions / divestitures – 86 656 – 6 16
Proceeds from lease receivables 13 19 0 6
Repayment of lease liabilities –1,257 –1,418 – 442 – 471
Interest on lease liabilities –277 –310 – 94 –106
Cash outflow from leases –1,521 –1,709 – 536 – 571
Interest received 39 59 13 22
Interest paid –72 –113 –17 –28
Net interest paid –33 – 54 – 4 – 6
Free cash flow –248 –296 143 507

Net assets

Selected indicators for net assets

31 Dec.
2018
30 Sept.
2019
Equity ratio % 27.5 24.5
Net debt € m 12,303 14,492
Net interest cover 1 6.5 7.9
Net gearing % 47.0 53.7

1 In the first nine months.

Consolidated total assets up

As at 30 September 2019, the Group's total assets amounted to €50,912 million, €442 million higher than at 31 December 2018 (€50,470 million).

Intangible assets increased from €11,850 million to €12,002 million because additions and positive currency effects exceeded amortisation and impairment losses and disposals. Property, plant and equipment rose from €19,202 million to €20,814 million, primarily on account of the €1 billion already capitalised for the renewal of the Express intercontinental aircraft fleet, mainly for advance payments. In contrast, other non-current assets dropped by €227 million to €126 million.

This was due mainly to the remeasurements that reduced pension assets. Our sale of money market funds sharply reduced current financial assets from €943 million to €140 million. Trade receivables increased from €8,247 million to €8,524 million. Other current assets rose by €434 million to €2,803 million. This figure includes the deferred expense of €104 million at the reporting date that was recognised for the prepaid annual contribution to civil servant pensions to the Bundesanstalt für Post und Telekommunikation. The €787 million decrease in cash and cash equivalents to €2,230 million is described in the section Financial position, page 6. Assets held for sale declined by €361 million to €65 million after the sale of the Supply Chain business in China.

On the equity and liabilities side of the balance sheet, equity attributable to Deutsche Post AG shareholders stood at €12,225 million, markedly below the level as at 31 December 2018 (€13,590 million): consolidated net profit for the period and currency effects increased this figure, whilst actuarial losses from pension obligations and the dividend distribution decreased it. Lower interest rates resulted in a steep increase in provisions for pensions and similar obligations by €1,789 million to €6,137 million. On balance, financial liabilities rose from €16,462 million to €17,219 million. Loans were taken out and three promissory note loans were repaid early. Trade payables decreased from €7,422 million to €6,508 million as at the balance sheet date.

Other current liabilities increased by €615 million to €5,047 million, due primarily to an increase in liabilities to employees. After the disposal of the Supply Chain business in China, liabilities associated with assets held for sale declined to €54 million.

Net debt increases to €14,492 million

Our net debtrose from €12,303 million as at 31 December 2018 to €14,492 million as at 30 September 2019. At 24.5 %,the equity ratio fell below the figure as at 31 December 2018 (27.5 %). Net interest cover indicates the extent to which net interest obligations are covered by EBIT. At 7.9, it was up on the previous year's level (6.5). Net gearing was 53.7 % as at 30 September 2019.

Net debt

€ m
31 Dec. 30 Sept.
2018 2019
Non-current financial liabilities 13,838 13,830
Current financial liabilities 2,425 3,032
Financial liabilities 1 16,263 16,862
Cash and cash equivalents 3,017 2,230
Current financial assets 943 140
Financial assets 3,960 2,370
Net debt 12,303 14,492

1 Less operating financial liabilities.

Business performance in the divisions

POST & PARCEL GERMANY DIVISION

Key figures, Post & Parcel Germany

€ m
9 M 2018 Q 3 2018
adjusted 1 9 M 2019 + / – % adjusted 1 Q 3 2019 + / – %
Revenue 10,919 11,194 2.5 3,520 3,713 5.5
of which Post 7,134 7,040 –1.3 2,273 2,344 3.1
Parcel 3,929 4,320 10.0 1,299 1,428 9.9
Other / Consolidation –144 –166 –15.3 – 52 – 59 –13.5
Profit / loss from operating activities (EBIT) 311 708 >100 –202 304 >100
Return on sales (%) 2 2.8 6.3 – 5.7 8.2
Operating cash flow 562 480 –14.6 275 354 28.7

1 Note 15.

2 EBIT / revenue.

Revenue surpasses prior-year level

In the first nine months of 2019, revenue in the division was €11,194 million, exceeding the prior-year figure of €10,919 million by 2.5 %. Revenue for the third quarter of 2019 was up 5.5 % compared with the prior-year period, in part due to an extra working day.

Quarterly revenue in Post business unit exceeds prior-year level

At €7,040 million, revenue in the Post business unit in the first nine months of 2019 was 1.3 % below the previous year's level (€7,134 million). Volumes declined by 2.5 %. Third-quarterrevenue was up 3.1 % to €2,344 million.

Although volumes declined, Mail Communication revenues for the first nine months of 2019 nearly reached the prior-year level, mainly as a result of the postage rate increase as at 1 July. Third-quarterrevenue exceeded the previous year's level thanks to the rate increase and the extra working day.

The generaltrend towards sending goods as letters persisted. In theDialogue Marketing business, activities are shifting increasingly to online media. The measures we have taken to increase sales to e-commerce businesses were unable to fully compensate for the revenue and volume declines.

E-commerce brings further growth in the Parcel business unit

In the Parcel business unit, revenue was up 10.0 % to €4,320 million in the first nine months of 2019. Growth in the third quarter amounted to 9.9 %. Volumes also continued to rise due to sustained growth in e-commerce, with an increase of 6.8 % to 1,118 million items in the first nine months and 6.1 % to 368 million items in the third quarter. The fact that revenue growth outpaced volume growth is attributable to price increases.

Post & Parcel Germany: revenue

9 M 2018
adjusted 1
9 M 2019 + / – % Q 3 2018
adjusted 1
Q 3 2019 + / – %
7,134 7,040 –1.3 2,273 2,344 3.1
4,626 4,586 – 0.9 1,469 1,548 5.4
1,603 1,558 –2.8 519 506 –2.5
905 896 –1.0 285 290 1.8
3,929 4,320 10.0 1,299 1,428 9.9

1 Note 15.

Post & Parcel Germany: volumes

Mail items (millions)
9 M 2018 Q 3 2018
adjusted 1 9 M 2019 + / – % adjusted 1 Q 3 2019 + / – %
Post 13,059 12,734 –2.5 4,189 4,177 – 0.3
of which Mail Communication 5,641 5,506 –2.4 1,788 1,813 1.4
Dialogue Marketing 6,182 5,973 –3.4 2,019 1,959 –3.0
Parcel 1,047 1,118 6.8 347 368 6.1

1 Note 15.

Significant increase in EBIT

EBIT in the division improved significantly in the first nine months of 2019, rising from €311 million to €708 million. Earnings for the previous year had been heavily impacted by non-recurring expenses for the early retirement programme for civil servants and by restructuring measures amounting to €443 million. However, the prior-year figure also included a positive one-off effect of €108 million from the revaluation of pension obligations. Return on sales in the first nine months of 2019 rose from 2.8 % to 6.3 %. EBIT in the division forthe third quarter of 2019 amounted to €304 million (previous year: €–202 million). The prior-year figure included expenses for the early retirement programme and restructuring which amounted to €392 million. In addition, although the third quarter of 2019 saw netincome of €90 million from the revaluation of pension obligations, this was offset by additional restructuring costs of the same amount. Operating cash flow fell to €480 million in the first nine months of 2019, due primarily to the negative trend in working capital.

EXPRESS DIVISION

Key figures, Express

€ m

9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019 + / – %
Revenue 11,724 12,458 6.3 3,906 4,247 8.7
of which Europe 5,273 5,554 5.3 1,725 1,858 7.7
Americas 2,383 2,614 9.7 812 911 12.2
Asia Pacific 4,155 4,438 6.8 1,385 1,525 10.1
MEA (Middle East and Africa) 842 909 8.0 277 306 10.5
Consolidation / Other – 929 –1,057 –13.8 –293 –353 –20.5
Profit from operating activities (EBIT) 1,387 1,428 3.0 409 454 11.0
Return on sales (%) 1 11.8 11.5 10.5 10.7
Operating cash flow 2,168 2,321 7.1 794 898 13.1

1 EBIT / revenue.

Dynamic growth of international business continues

Revenue in the division increased by 6.3 % to €12,458 million in the first nine months of 2019 (previous year: €11,724 million). This figure includes foreign currency gains of €208 million; excluding these gains, the revenue increase was 4.5 %. The revenue figure also reflects the factthatfuel surcharges were higherin allregions compared with the previous year. Excluding currency effects and the fuel surcharges, revenue was up by 3.4 %.

In the TimeDefinite International(TDI) productline,revenues per day rose by 4.9 % in the first nine months of 2019 and per-day shipment volumes by 5.8 %. Revenues per day forthe third quarter of 2019 were up by 5.6 % and per-day shipment volumes by 5.9 %.

In the Time Definite Domestic (TDD) product line, revenues per day increased by 7.0 % in the first nine months of 2019 and per-day shipment volumes by 8.0 %. Growth in the third quarter amounted to 9.8 % for revenues per day and 8.8 % for per-day volumes.

Express: revenue by product

9 M 2018 Q 3 2018
adjusted 1 9 M 2019 + / – % adjusted 1 Q 3 2019 + / – %
47.3 49.6 4.9 46.3 48.9 5.6
4.3 4.6 7.0 4.1 4.5 9.8

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.

Express: volumes by product

Thousands of items per day
9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019 + / – %
Time Definite International (TDI) 925 979 5.8 908 962 5.9
Time Definite Domestic (TDD) 474 512 8.0 464 505 8.8

Stable growth in the Europe region

Revenue in the Europe region increased by 5.3 % to €5,554 million in the first nine months of 2019 (previous year: €5,273 million). That figure includes foreign currency losses of €16 million; growth excluding currency effects was 5.6 %. In the TDI product line, revenues per day increased by 5.0 %. Per-day shipment volumes improved by 7.8 %. International per-day revenues for the third quarter of 2019 were up by 4.5 % and per-day shipment volumes by 7.6 %.

Strong international business in the Americas region

Revenue in the Americas region increased by 9.7 % to €2,614 million in the first nine months of 2019 (previous year: €2,383 million). Included in that figure are foreign currency gains of €81 million. Excluding currency effects, growth came to 6.3 %. In the TDI product line, per-day shipments were up by 4.1 % compared with the previous year. Revenues per day increased by 4.7 %. Growth in the third quarter of 2019 amounted to 6.1 % for per-day volumes and 7.6 % for revenues per day.

Operating business in the Asia Pacific region

sees further growth

Revenue in the Asia Pacific region rose by 6.8 % to €4,438 million in the first nine months of 2019 (previous year: €4,155 million). That figure includes foreign currency gains of €108 million. Excluding currency effects, revenue increased by 4.2 %. In the TDI productline,revenues per day rose by 4.8 % and per-day volumes by 4.2 %. Growth in the third quarter of 2019 amounted to 5.8 % for revenues per day and 5.7 % for per-day volumes.

Per-day revenues continue to grow in the MEA region

Revenue in the MEA region (Middle East and Africa) improved by 8.0 % in the first nine months of 2019 to €909 million (previous year: €842 million). The revenue figure includes foreign currency gains of €30 million. Revenue growth excluding currency effects

was 4.4 %. TDIrevenues per day rose by 5.8 % and per-day volumes by 5.3 %. International per-day revenues for the third quarter of 2019 were up by 3.0 % and per-day shipment volumes declined by 5.9 %.

Third-quarter EBIT well above prior year

As expected, EBIT growth accelerated in the reporting period particularly as the effects of portfolio streamlining for heavy shipments on earnings continue to diminish. EBIT forthe division rose by 3.0 % to €1,428 million in the first nine months of 2019 (previous year: €1,387 million). The return on sales was 11.5 % (previous year: 11.8 %). In the third quarter, EBIT improved by 11.0 % to €454 million and return on sales increased from 10.5 % to 10.7 %. Operating cash flow increased to €2,321 million in the first nine months of 2019 (previous year: €2,168 million).

GLOBAL FORWARDING, FREIGHT DIVISION

Key figures, Global Forwarding, Freight

€ m
9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019 + / – %
Revenue 10,976 11,274 2.7 3,683 3,716 0.9
of which Global Forwarding 1 7,784 7,956 2.2 2,640 2,645 0.2
Freight 3,298 3,405 3.2 1,076 1,090 1.3
Consolidation / Other 1 –106 – 87 17.9 –33 –19 42.4
Profit from operating activities (EBIT) 281 348 23.8 106 124 17.0
Return on sales (%) 2 2.6 3.1 2.9 3.3
Operating cash flow 237 415 75.1 67 175 >100

1 Prior-year figures adjusted due to reclassifications.

2 EBIT / revenue.

Currency gains contribute to revenue growth

Revenue in the division increased by 2.7 % to €11,274 million in the first nine months of 2019 (previous year: €10,976 million). Excluding positive currency effects of €97 million, revenue was up year-on-year by 1.8 %. Revenue in the third quarter of 2019 rose by 0.9 % compared with the prior-year figure. In the Global Forwarding business unit, revenue increased by 2.2 % to €7,956 million in the first nine months of 2019 (previous year: €7,784 million). Excluding positive currency effects of €114 million,the increase was 0.7 %. At €1,876 million, gross profitforthe business unit exceeded the prior-year figure of €1,820 million.

Improved air freight margins and solid project business

We reported a decline in airfreight volume of 5.3 % in the first nine months of 2019, due mainly to the decline in market volumes on key trade lanes. Air freight revenues decreased by 1.3 %. Gross profit improved by 3.7 %. Air freight revenue fell by 4.7 % in the third quarter of 2019, whilst gross profitimproved by 2.1 % despite a volume decline of 6.2 %.

Ocean freight volumes forthe first nine months of 2019 were up 0.5 % on the previous year's level.Ocean freightrevenues rose by 6.2 %, whilst gross profit declined by 2.2 %. In the third quarter, ocean freight volumes rose by 2.8 % and revenue by 3.4 %, whilst gross profit fell by 2.4 %.

The industrial project business (reported in the following table as part of Other) improved compared with the prior year. The share ofrevenue related to industrial project business, which is reported under Other, increased from 30.0 % in the prior year to 34.5 %. Gross profit for industrial projects improved by 32.7 %.

Global Forwarding: revenue

€ m
9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019 + / – %
Air freight 3,552 3,507 –1.3 1,202 1,145 – 4.7
Ocean freight 2,574 2,733 6.2 887 917 3.4
Other 1 1,658 1,716 3.5 551 583 5.8
Total 1 7,784 7,956 2.2 2,640 2,645 0.2

1 Prior-year figures adjusted due to reclassifications.

Global Forwarding: volumes

Thousands
9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019 + / – %
Air freight tonnes 2,806 2,657 – 5.3 940 882 – 6.2
of which exports tonnes 1,579 1,499 – 5.1 529 502 – 5.1
Ocean freight TEUs 1 2,401 2,412 0.5 824 847 2.8

1 Twenty-foot equivalent units.

Revenue growth in European overland transport business

In the Freight business unit, revenue rose by 3.2 % to €3,405 million in the first nine months of 2019 (previous year: €3,298 million) despite negative currency effects of €18 million. The 9.9 % volume growth was driven mainly by B2C business in Sweden and lessthan-truckload business in the Czech Republic and Poland. The business unit's gross profitrose by 3.9 % to €861 million (previous year: €829 million).

Significant improvement in earnings

Division EBIT increased significantly in the first nine months of 2019,rising from €281 million to €348 million. The increase was due mainly to improved gross profit margins in airfreight and cost measures. Return on sales rose to 3.1 % (previous year: 2.6 %). In the third quarter of 2019, EBIT improved from €106 million to €124 million and return on sales was 3.3 %. Operating cash flow in the first nine months amounted to €415 million (previous year: €237 million).

SUPPLY CHAIN DIVISION

Key figures, Supply Chain

€ m
9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019 + / – %
Revenue 9,607 9,865 2.7 3,271 3,347 2.3
of which EMEA (Europe, Middle East and Africa) 5,047 4,958 –1.8 1,676 1,644 –1.9
Americas 3,033 3,435 13.3 1,071 1,223 14.2
Asia Pacific 1,569 1,490 – 5.0 536 487 – 9.1
Consolidation / Other – 42 –18 57.1 –12 –7 41.7
Profit from operating activities (EBIT) 336 735 >100 153 162 5.9
Return on sales (%) 1 3.5 7.5 4.7 4.8
Operating cash flow 386 521 35.0 253 370 46.2

1 EBIT / revenue.

Stable revenue growth

Revenue in the division increased by 2.7 % to €9,865 million in the first nine months of 2019 (previous year: €9,607 million). The increase is due, in particular, to the good business performance in the Americas region. In addition, positive currency effects increased revenue by €188 million. Excluding currency effects and portfolio changes – in particular, the sale of our Supply Chain business in China in the first quarter – revenue growth was 3.3 %. In the third quarter of 2019,revenue increased by 2.3 % to €3,347 million (previous year: €3,271 million).

In the Americas and Asia Pacific regions, adjusted for the sale of the Supply Chain business in China, volumes grew in nearly all sectors. In the EMEA region, we achieved significant growth in the Engineering & Manufacturing sector.

Supply Chain: revenue by sector and region, 9M 2019

Total revenue: €9,865 million

of which Retail 28 %
Consumer 24 %
Auto-mobility 16 %
Technology 14 %
Life Sciences & Healthcare 10 %
Engineering & Manufacturing 6 %
Others 2 %
of which Europe / Middle East / Africa / Consolidation 50 %
Americas 35 %
Asia Pacific 15 %

New business worth around €694 million secured

In the first nine months of 2019,the division concluded additional contracts worth around €694 million in annualised revenue with

ECOMMERCE SOLUTIONS DIVISION

Key figures, eCommerce Solutions

both new and existing customers. The Retail and Consumer sectors accounted for the majority of the gains. The annualised contract renewal rate remained at a consistently high level.

Solid business performance leads to EBIT growth

EBIT in the division was €735 million in the first nine months of 2019 (previous year: €336 million). It was influenced positively by solid growth in almost all regions and the sale of the China business in the first quarter of 2019. This was offset by negative oneoff effects of €119 million in the reporting period and €50 million in the first quarter of 2018. Excluding the above effects, EBIT was up 10.9 % in the first nine months of 2019. The return on sales was 7.5 % (previous year: 3.5 %). Operating cash flow improved from €386 million to €521 million in the first nine months of 2019.

EBIT forthe third quarter of 2019 was up 5.9 % year-on-year to €162 million. Excluding non-recurring effects from strategic measures of €–8 million, EBIT rose by 11.1 %. Return on sales amounted to 4.8 % in the third quarter (previous year: 4.7 %).

€ m
9 M 2018 9 M 2019 + / – % Q 3 2018 Q 3 2019 + / – %
Revenue 2,769 2,958 6.8 915 964 5.4
of which Americas 760 834 9.7 253 273 7.9
Europe 1,608 1,696 5.5 527 541 2.7
Asia 405 427 5.4 136 148 8.8
Other / Consolidation – 4 1 >100 –1 2 >100
Profit / loss from operating activities (EBIT) –21 – 40 – 90.5 –7 6 >100
Return on sales (%) 1 – 0.8 –1.4 – 0.8 0.6
Operating cash flow 54 128 >100 20 80 >100

1 EBIT / revenue.

Revenue continues to increase

The division generated revenue of €2,958 million in the first nine months of 2019, up 6.8 % on the prior-year figure of €2,769 million, despite individual portfolio streamlining measures. All regions contributed to the increase. Revenue in the Americas region rose by 9.7 % to €834 million (previous year: €760 million). In the Europe region, revenue grew by 5.5 % to €1,696 million (previous year: €1,608 million). Revenue in the Asia region came to €427 million in the first nine months of the year, exceeding the prior-year figure by 5.4 %. Excluding foreign currency gains of €58 million,the total year-on-yearrevenue increase came to 4.7 % in the reporting period.Division revenue forthe third quarter was up 5.4 % to €964 million (previous year: €915 million).

EBIT declines due to restructuring expenses

Division EBIT fell to €–40 million in the first nine months of 2019 (previous year: €–21 million), due primarily to restructuring expenses in a net amount of €55 million. The expenses were incurred for portfolio optimisation, overhead reductions and loss allowances, amongst otherthings. The return on sales therefore remained negative at –1.4 % (previous year: –0.8 %). At €128 million, operating cash flow was significantly higher than in the previous year, mainly due to improvements in operating performance and net working capital. Third-quarter EBIT came to €6 million (previous year: €–7 million), with the increase reflecting the good performance of the core business and the initial successes of the restructuring measures implemented. Return on sales amounted to 0.6 % in the third quarter (previous year: –0.8 %).

EXPECTED DEVELOPMENTS

Future economic parameters

The economic outlook for 2019 as reported in the 2018 Annual Report beginning on page 63 deteriorated further as the year progressed. In itsOctoberforecast, IHS Markit expects global growth of 2.6 % (IMF: 3.0 % as at October), with the outlook for global trade volume projected at 2.0 % (IMF: 1.1 % as at October). Any recovery in global growth is unlikely before the second half of 2020. The looming political and economic risks are mainly on the downside, including the situation in the Middle East and its impact on the oil price, global trade conflicts and a significant slowdown in key economies.

The gradual deceleration of growth in the Chinese economy will continue, with IHS Markit expecting annual growth for full-year 2019 to decline to 6.2 % (IMF: 6.1 % as at October). The Japanese economy will hardly gain any momentum afterthe VAT increase on 1 October(IHS Markit: 0.9 %; IMF: 0.9 % as atOctober).

New tariffs will slow growth in the United States but are unlikely to force its economy into recession. The renewed reduction oftheUS key interestrate to 1.5 % to 1.75 % should also contribute to this. Growth is expected to reach 2.3 % in 2019 (IMF: 2.4 % as at October), considerably lower than last year.

Growth momentum in the eurozone will slow markedly (IHS Markit: 1.1 %, IMF: 1.2 % as at October), with manufacturing and related supplier sectors being suppressed by weak world markets.

Looming political and economic risks are mainly on the downside.

Germany is expected to continue suffering from a persistently slack economy, with no recovery expected before the second half of 2020. IHS Markit is predicting growth of just 0.4 % for 2019 (IMF in October: 0.5 %).

Earnings forecast

Afterthe end ofthe third quarter, we are confirming the earnings forecast for this year that was adjusted in August. For 2019 as a whole, the Board of Management is expecting consolidated EBIT of between €4.0 billion and €4.3 billion. The Post & Parcel Germany division is projected to contribute between €1.1 billion and €1.3 billion to this figure. For the DHL divisions, we are anticipating earnings totalling between €3.4 billion and €3.5 billion. The Corporate Functions result is forecast to be around €–0.5 billion.

Expected financial position

We are reconfirming the expected financial position for full-year 2019 as described in the 2018 Annual Report on page 65.

Performance of further indicators relevant for internal management

We are reconfirming the projected full-year 2019 figures for the EAC and free cash flow management indicators as described in the 2018 Annual Report on page 65.

OPPORTUNITIES AND RISKS

The introduction of a capital guarantee option for pension commitments to employees in Germany represents a moderately significant opportunity in full-year 2019. The Group is exposed to risk stemming from the continued restructuring of the Post & Parcel Germany division. All in all, these factors are not expected to significantly impact earnings.

Otherwise, the Group's opportunity and risk situation did not change significantly during the first nine months of 2019 as compared with the situation described in the 2018 Annual Report beginning on page 66 orthe updated opportunity and risk situation presented in the Interim Report as at 30 June 2019 on page 14. No new risks have been identified that could have a potentially critical impact on the Group's results. Based upon the Group's early warning system and in the estimation ofitsBoard 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.

Any internet sites referred to in the Interim Group Management Report do not form part of the report.

INCOME STATEMENT

1 January to 30 September

€ m

9 M 2018 9 M 2019 Q 3 2018 Q 3 2019
Revenue 44,624 46,385 14,849 15,552
Other operating income 1 1,319 1,787 443 438
Changes in inventories and work performed and capitalised 1 261 188 84 47
Materials expense –23,025 –23,459 –7,773 –7,861
Staff costs –15,462 –16,021 – 5,310 – 5,197
Depreciation, amortisation and impairment losses –2,414 –2,718 – 838 – 917
Other operating expenses –3,275 –3,293 –1,078 –1,119
Net income from investments accounted for using the equity method 0 1 –1 –1
Profit from operating activities (EBIT) 2,028 2,870 376 942
Financial income 131 146 30 30
Finance costs – 542 – 621 –189 –191
Foreign currency losses –18 1 0 –12
Net finance costs – 429 – 474 –159 –173
Profit before income taxes 1,599 2,396 217 769
Income taxes –224 – 527 –31 –169
Consolidated net profit for the period 1,375 1,869 186 600
attributable to ­Deutsche Post AG shareholders 1,262 1,765 146 561
attributable to non-controlling interests 113 104 40 39
Basic earnings per share (€) 1.03 1.43 0.12 0.45
Diluted earnings per share (€) 1.01 1.41 0.12 0.45

1 For reasons of transparency, changes in inventories and work performed and capitalised were transferred out of other operating income and presented separately.

STATEMENT OF COMPREHENSIVE INCOME

1 January to 30 September

€ m

9 M 2018 9 M 2019 Q 3 2018 Q 3 2019
Consolidated net profit for the period 1,375 1,869 186 600
Items that will not be reclassified to profit or loss
Change due to remeasurements of net pension provisions 102 –2,181 441 –779
Reserve for equity instruments without recycling 0 –30 –3 –28
Income taxes relating to components of other comprehensive income –38 97 –14 44
Share of other comprehensive income of investments accounted for using the equity method, net of tax 0 0 0 0
Total, net of tax 64 –2,114 424 –763
Items that may be reclassified subsequently to profit or loss
IAS 39 hedging reserve
Changes from unrealised gains and losses –2 –13 1 –7
Changes from realised gains and losses –32 8 – 6 –2
Currency translation reserve
Changes from unrealised gains and losses –3 333 – 61 269
Changes from realised gains and losses 0 32 0 0
Income taxes relating to components of other comprehensive income 9 1 2 2
Share of other comprehensive income of investments accounted for using the equity method, net of tax 1 3 –1 2
Total, net of tax –27 364 – 65 264
Other comprehensive income, net of tax 37 –1,750 359 – 499
Total comprehensive income 1,412 119 545 101
attributable to ­Deutsche Post AG shareholders 1,308 12 516 61
attributable to non-controlling interests 104 107 29 40

BALANCE SHEET

€ m
31 Dec. 2018 30 Sept. 2019
ASSETS
Intangible assets 11,850 12,002
Property, plant and equipment 19,202 20,814
Investment property 18 28
Investments accounted for using the equity method 119 129
Non-current financial assets 730 777
Other non-current assets 353 126
Deferred tax assets 2,532 2,537
Non-current assets 34,804 36,413
Inventories 454 507
Current financial assets 943 140
Trade receivables 8,247 8,524
Other current assets 2,369 2,803
Income tax assets 210 230
Cash and cash equivalents 3,017 2,230
Assets held for sale 426 65
Current assets 15,666 14,499
TOTAL ASSETS 50,470 50,912
EQUITY AND LIABILITIES
Issued capital
1,233 1,236
Capital reserves 3,469 3,461
Other reserves – 947 – 617
Retained earnings 9,835 8,145
Equity attributable to ­Deutsche Post AG shareholders 13,590 12,225
Non-controlling interests 283 246
Equity 13,873 12,471
Provisions for pensions and similar obligations 4,348 6,137
Deferred tax liabilities 54 31
Other non-current provisions 1,655 1,588
Non-current financial liabilities 13,869 13,859
Other non-current liabilities 205 345
Non-current provisions and liabilities 20,131 21,960
Current provisions 1,073 926
Current financial liabilities 2,593 3,360
Trade payables 7,422 6,508
Other current liabilities 4,432 5,047
Income tax liabilities 718 586
Liabilities associated with assets held for sale 228 54
Current provisions and liabilities 16,466 16,481
TOTAL EQUITY AND LIABILITIES 50,470 50,912

CASH FLOW STATEMENT

1 January to 30 September

€ m

9 M 2018 9 M 2019 Q 3 2018 Q 3 2019
Consolidated net profit for the period 1,375 1,869 186 600
Income taxes 224 527 31 169
Net finance costs 429 474 159 173
Profit from operating activities (EBIT) 2,028 2,870 376 942
Depreciation, amortisation and impairment losses 2,414 2,718 838 917
Net loss / income from disposal of non-current assets 20 – 485 10 0
Non-cash income and expense 21 – 44 13 7
Change in provisions 174 – 458 278 –336
Change in other non-current assets and liabilities –71 128 –23 67
Dividend received 2 2 0 0
Income taxes paid – 406 – 602 –116 –183
Net cash from operating activities before changes in working capital 4,182 4,129 1,376 1,414
Changes in working capital
Inventories
–257 – 63 –117 24
Receivables and other current assets – 619 – 619 –34 230
Liabilities and other items –162 – 61 196 201
Net cash from operating activities 3,144 3,386 1,421 1,869
Subsidiaries and other business units 5 678 5 21
Property, plant and equipment and intangible assets 46 104 1 15
Investments accounted for using the equity method and other investments 0 0 0 0
Other non-current financial assets 40 37 13 14
Proceeds from disposal of non-current assets 91 819 19 50
Subsidiaries and other business units – 58 –14 –7 – 6
Property, plant and equipment and intangible assets –1,798 –2,679 –733 – 816
Investments accounted for using the equity method and other investments –33 – 8 – 4 1
Other non-current financial assets –10 – 4 –7 –3
Cash paid to acquire non-current assets –1,899 –2,705 –751 – 824
Interest received 39 59 13 22
Current financial assets 473 782 3 2
Net cash used in investing activities –1,296 –1,045 –716 –750
Proceeds from issuance of non-current financial liabilities 562 196 526 29
Repayments of non-current financial liabilities –1,294 –1,724 – 449 –768
Change in current financial liabilities – 46 295 –296 –127
Other financing activities 28 19 2 – 6
Cash paid for transactions with non-controlling interests –3 – 5 0 0
Dividend paid to ­Deutsche Post AG shareholders –1,409 –1,419 0 0
Dividend paid to non-controlling interest shareholders –122 –137 –117 –129
Purchase of treasury shares – 44 –11 0 –1
Proceeds from issuing shares or other equity instruments 0 11 0 11
Interest paid –349 – 423 –111 –134
Net cash used in financing activities –2,677 –3,198 – 445 –1,125
Net change in cash and cash equivalents – 829 – 857 260 – 6
Effect of changes in exchange rates on cash and cash equivalents –78 39 – 43 18
Changes in cash and cash equivalents associated with assets held for sale 0 31 0 –2
Changes in cash and cash equivalents due to changes in consolidated group 0 0 0 0
Cash and cash equivalents at beginning of reporting period
Cash and cash equivalents at end of reporting period
3,135
2,228
3,017
2,230
2,011
2,228
2,220
2,230

STATEMENT OF CHANGES IN EQUITY

1 January to 30 September

€ m Other reserves
Issued Capital IAS 39
revalu
ation
IAS 39
hedging
Reserve for
equity in
struments
without
Currency
translation
Retained Equity
attributable
to ­Deutsche
Post AG
share
Non-con
trolling
Total
capital reserves reserve reserve recycling reserve earnings holders interests equity
Balance at 1 January 2018 1,224 3,327 10 19 –1,027 9,084 12,637 266 12,903
Adjustments due to new IFRS –10 11 –1 – 50 – 50 –2 – 52
Balance at 1 January 2018, adjusted 1,224 3,327 19 11 –1,028 9,034 12,587 264 12,851
Capital transactions with owner
Dividend
–1,409 –1,409 –122 –1,531
Transactions with non-controlling
interests
0 0 0 4 4 –3 1
Changes in non-controlling interests
due to changes in consolidated group
0 2 2
Issue / retirement of treasury shares 3 25 0 28 0 28
Purchase of treasury shares –1 – 45 – 46 – 46
Differences between purchase and issue
prices of treasury shares (share-based
payment schemes)
7 –7 0 0
Convertible bonds 5 102 107 107
Share-based payment schemes (issuance) 79 79 79
Share-based payment schemes (exercise) 2 – 92 65 –25 –25
–1,262 –123 –1,385
Total comprehensive income
Consolidated net profit for the period 1,262 1,262 113 1,375
Currency translation differences 6 6 – 9 –3
Change due to remeasurements
of net pension provisions
64 64 0 64
Other changes –24 0 0 –24 0 –24
1,308 104 1,412
Balance at 30 September 2018 1,233 3,448 – 5 11 –1,022 8,968 12,633 245 12,878
Balance at 1 January 2019 1,233 3,469 –7 8 – 948 9,835 13,590 283 13,873
Capital transactions with owner
Dividend
–1,419 –1,419 –137 –1,556
Transactions with non-controlling
interests
0 0 0 7 7 –7 0
Changes in non-controlling interests
due to changes in consolidated group
0 0
Issue of treasury shares 0 5 – 5 0 0 0
Purchase of treasury shares 0 –11 –11 –11
Differences between purchase and issue
prices of treasury shares (share-based
payment schemes)
0 0 0
Convertible bonds 0 0 0
Share-based payment schemes (issuance) 34 34 34
Share-based payment schemes (exercise) 3 – 47 56 12 12
–1,377 –144 –1,521
Total comprehensive income
Consolidated net profit for the period 1,765 1,765 104 1,869
Currency translation differences 365 365 3 368
Change due to remeasurements
of net pension provisions –2,083 –2,083 0 –2,083
Other changes – 4 –31 0 –35 0 –35
12 107 119
Balance at 30 September 2019 1,236 3,461 –11 –23 – 583 8,145 12,225 246 12,471

SELECTED EXPLANATORY NOTES

Basis of preparation

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 30 September 2019 and have been reviewed.

1 Basis of accounting

The condensed consolidated interim financial statements as at 30 September 2019 were prepared in accordance with the International Financial Reporting Standards (IFRS s) 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 IFRS s to be presented in condensed interim financial statements.

Preparation of the condensed consolidated interim financial statements in accordance with IAS 34 requires the Board of Managementto 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 2019 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 upon the same accounting policies used in the consolidated financial statements for financial year 2018. Exceptions are the new or revised International Financial Reporting Standards (IFRS s) required to be applied for the first time in financial year 2019 that, however, have not had a material influence on the consolidated interim financial statements. Detailed explanations of these can be found in the 2018 Annual Report in note 5 to the consolidated financial statements.

The income tax expense forthe reporting period was deferred on the basis of the tax rate expected to apply to the full financial year. The tax rate for 2019 will increase primarily because a smaller additional recognition of deferred taxes on tax loss carryforwards is expected due to the use of tax losses compared with the previous year.

2 Consolidated group

The companies listed in the following table are consolidated in addition to the parent company Deutsche Post AG:

Consolidated group

31 Dec.
2018
30 Sept.
2019
Number of fully consolidated companies
(subsidiaries)
German 127 81
Foreign 616 610
Number of joint operations
German 1 1
Foreign 0 0
Number of investments accounted for using
the equity method
German 1 1
Foreign 18 15

In the third quarter of 2019, 46 German DHL Delivery companies were merged into Deutsche Post AG. In addition to the disposal of companies resulting from the deconsolidation of the Supply Chain business in China, Hong Kong and Macao, note 2.3, an additional 4.9 % interest in Relais Colis SAS, France, which is accounted for using the equity method, and the remaining 10 % interestinOlimpoHolding S. A., Brazil, were acquired.

2.1 Acquisitions in 2019

No companies were acquired by 30 September 2019.

2.2 Contingent consideration

The following are the variable purchase prices for companies acquired in prior years:

Contingent consideration

Company Basis Period for financial
years from / to
Results range
from / to
Fair value of total
obligation at the
acquisition date
Remaining payment
obligation at
31 December 2018
Remaining payment
obligation at
30 September 2019
Mitsafetrans S. r. l. EBITDA 2016 to 2018 €0 to 19 million €15 million €5 million
Suppla Group EBITDA 2018 to 2019 €0 to 10 million 1 €12 million €10 million

1 Adjusted in financial year 2018 due to reassessments.

€8 million was paid for the Suppla Group in May 2019, and €5 million was paid for Mitsafetrans S. r. l. in July 2019.

2.3 Deconsolidation effects in 2019

Gains are shown in other operating income; losses are reported in other operating expenses.

Supply Chain

In mid-February 2019, Deutsche Post DHL Group sold its Supply Chain business in China, Hong Kong and Macao to S. F. Holding, China. The assets and liabilities of the companies in question had previously been reported as held for sale. The table below shows the effects of the disposal of twelve consolidated companies and three companies accounted for using the equity method.

Deconsolidation effects

€ m
Supply Chain
business in
1 January to 30 September 2019 China
Non-current assets 212
of which goodwill 91
Current assets 194
Cash and cash equivalents 33
ASSETS 439
Non-current provisions and liabilities 45
Current provisions and liabilities 179
EQUITY AND LIABILITIES 224
Net assets 215
Cash consideration received 686
Losses from the currency translation reserve –32
Deconsolidation gain 439

In addition, Deutsche Post DHL Group will receive an annual amount linked to revenue over the next ten years in a strategic partnership.

3 Significant transactions

In addition to the sale of the Supply Chain business in China, note 2, the following significant transactions occurred:

As at 30 September 2019, restructuring expenses of €264 million net had been incurred for measures intended to improve earnings, €119 million of which were attributable to the Supply Chain division, €90 million to Post & Parcel Germany and €55 million to eCommerce Solutions.

In the third quarter of 2019,theGroup began offering an extended group of employees in Germany the option of taking a lump-sum payment rather than receiving a lifetime pension under our occupational pension plan. Past service gains totalling €106 million were recognised in staff costs as a result.

Income statement disclosures

4 Revenue by business unit

€ m

9 M 2018 9 M 2019
Post & Parcel Germany 1 10,669 10,922
Post 6,832 6,720
Parcel 3,767 4,138
Other 70 64
Express 11,447 12,185
Global Forwarding, Freight 10,323 10,580
Global Forwarding 7,610 7,808
Freight 2,713 2,772
Supply Chain 9,505 9,790
eCommerce Solutions 1 2,585 2,799
Corporate Functions 95 109
Total revenue 44,624 46,385

1 Prior-period amounts adjusted due to new segment structure, note 15.

5 Other operating income

€ m
----- --
9 M 2018 9 M 2019
Income from the disposal of assets 39 516
Insurance income 165 180
Income from the remeasurement of liabilities 92 146
Income from currency translation 160 140
Reversals of impairment losses on receivables and
other assets
84 105
Income from fees and reimbursements 93 88
Income from the reversal of provisions 123 71
Commission income 68 59
Operating lease income 37 47
Sublease income 25 37
Income from prior-period billings 42 33
Income from loss compensation 21 20
Income from derivatives 52 18
Income from the derecognition of liabilities 9 12
Recoveries on receivables previously written off 12 11
Subsidies 13 10
Miscellaneous 284 294
Total 1,319 1,787

Since the fourth quarter of 2018, changes in inventories and work performed and capitalised have been presented in a separate item in the income statement, note 6. The prior-period amounts were adjusted accordingly.

Income from the disposal of assets increased, in particular due to the sale of the Supply Chain business in China, note 2.

Miscellaneous other operating income includes a large number of smaller individual items.

6 Changes in inventories and work performed and capitalised

€ m
9 M 2018 9 M 2019
Income (+) / expense (–) from changes in inventories 21 – 99
Work performed and capitalised 240 287
Total 261 188

Changes in inventories and work performed and capitalised have been presented as a separate income statement item since the fourth quarter of 2018, note 5. The prior-period amounts were adjusted accordingly.

Changes in inventories relate mainly to real estate development projects and the production of StreetScooter electric vehicles. Work performedandcapitalisedwasattributableprimarily to StreetScooter GmbH.

7 Depreciation, amortisation and impairment losses

€ m
9 M 2018 9 M 2019
Amortisation of and impairment losses on
intangible assets, of which impairment loss:
€0 million (previous year: €1 million)
143 160
Depreciation of and impairment losses on
property, plant and equipment acquired 1,
of which impairment loss:
€22 million (previous year: €2 million)
889 1,029
Depreciation of and impairment losses on
right-of-use assets 1, of which impairment loss:
€11 million (previous year: €7 million)
1,382 1,524
Impairment of goodwill 0 5
Depreciation, amortisation and
impairment losses
2,414 2,718

1 Including investment property.

Total impairment losses amounted to €38 million. Of this figure, €34 million was attributable to the Supply Chain segment and related mainly (€21 million) to the non-current assets of the power packaging business in the United States.

8 Other operating expenses

€ m
9 M 2018 9 M 2019
Cost of purchased cleaning and security services 304 327
Warranty expenses, refunds and compensation
payments 235 266
Expenses for advertising and public relations 265 258
Travel and training costs 253 254
Other business taxes 187 202
Write-downs of current assets 176 185
Telecommunication costs 159 166
Office supplies 132 143
Insurance costs 240 140
Currency translation expenses 157 137
Entertainment and corporate hospitality expenses 132 130
Services provided by the Bundesanstalt für Post
und Telekommunikation (German federal post and
telecommunications agency) 114 118
Customs clearance-related charges 98 107
Contributions and fees 78 90
Consulting costs (including tax advice) 92 81
Voluntary social benefits 68 66
Monetary transaction costs 45 50
Legal costs 42 49
Commissions paid 42 44
Losses on disposal of assets 45 40
Audit costs 22 22
Donations 16 15
Miscellaneous 373 403
Total 3,275 3,293

For reasons of transparency, the disclosure of personal insurance expenses was standardised as staff costs in the reporting period. Insurance expenses declined accordingly.

Miscellaneous other operating expenses include part of the restructuring expenses for Post & Parcel Germany, Supply Chain and eCommerce Solutions.

In the previous year, other operating expenses included €49 million attributable to negative effects from customer contracts in the Supply Chain division.

9 Earnings per share

Basic earnings per share in the reporting period were €1.43 (previous year: €1.03).

Basic earnings per share

number 1,229,198,690 1,233,639,577
€ m 1,262 1,765
9 M 2018 9 M 2019

Diluted earnings per share in the reporting period were € 1.41 (previous year: € 1.01).

Diluted earnings per share

9 M 2018 9 M 2019
Consolidated net profit for the
period attributable to
Deutsche Post AG shareholders
€ m 1,262 1,765
Plus interest expense on the
convertible bond
€ m 6 6
Less income taxes € m 1 1
Adjusted consolidated net profit
for the period attributable to
Deutsche Post AG shareholders
€ m 1,267 1,770
Weighted average number of
shares outstanding
number 1,229,198,690 1,233,639,577
Potentially dilutive shares number 22,743,508 20,209,961
Weighted average number of
shares for diluted earnings
number 1,251,942,198 1,253,849,538
Diluted earnings per share 1.01 1.41

Balance sheet disclosures

10 Intangible assets and property, plant and equipment

Investments in intangible assets (not including goodwill), property, plant and equipment acquired and right-of-use assets amounted to €4,555 million as at 30 September 2019 (previous year: €3,519 million).

Investments

€ m
30 Sept. 30 Sept.
2018 2019
Intangible assets (not including goodwill) 140 139
Property, plant and equipment acquired
Land and buildings 90 101
Technical equipment and machinery 97 147
Transport equipment 153 168
Aircraft 69 78
IT equipment 60 57
Operating and office equipment 49 50
Advance payments and assets under
development 1,045 1,832
1,563 2,433
Right-of-use assets
Land and buildings 1,295 1,559
Technical equipment and machinery 44 41
Transport equipment 136 148
Aircraft 341 233
Advance payments 0 2
1,816 1,983
Total 3,519 4,555

Advance payments increased due chiefly to the renewal ofthe intercontinental Express aircraft fleet. A total of €988 million has been paid to date in financial year 2019.

Goodwill changed as follows:

Change in goodwill

€ m
2018 2019
Cost
Balance at 1 January 12,239 12,236
Additions from business combinations 45 0
Disposals –127 –1
Currency translation differences 79 186
Balance at 31 December / 30 September 12,236 12,421
Depreciation, amortisation and impairment losses
Balance at 1 January 1,070 1,037
Disposals –32 1
Impairment losses 0 5
Currency translation differences –1 19
Balance at 31 December / 30 September 1,037 1,062
Carrying amount at 31 December / 30 September 11,199 11,359

11 Financial assets

Financial assets 730 777 943 140 1,673 917
Assets at fair value through profit or loss 188 226 843 31 1,031 257
Assets at fair value through other comprehensive income 43 33 0 0 43 33
Assets measured at cost 499 518 100 109 599 627
31 Dec.
2018
30 Sept.
2019
31 Dec.
2018
30 Sept.
2019
31 Dec.
2018
30 Sept.
2019
€ m Non-current Current Total

The financial assets decreased primarily as a result ofthe sale of money market funds.

Net impairment losses as at 30 September 2019 amounted to €56 million (previous year: €76 million).

12 Assets held for sale and liabilities associated with assets held for sale

The amounts reported in this item relate to the following transactions:

€ m
Assets Liabilities
31 Dec.
2018
30 Sept.
2019
31 Dec.
2018
30 Sept.
2019
DHL Logistics (Schweiz) AG, Switzerland – asset deal (Supply Chain segment) 0 65 0 54
Sale of the Supply Chain business in China, Hong Kong and Macao (Supply Chain segment) 414 0 228 0
DHL Freight GmbH, ­Germany – property (Global Forwarding, Freight segment) 9 0 0 0
Exel Logistics Property Limited, UK – property sale (Supply Chain segment) 3 0 0 0
Other 0 0 0 0
Assets held for sale and liabilities associated with assets held for sale 426 65 228 54

Deutsche Post DHL Group intends to sell the supply chain business of DHL Logistics (Schweiz) AG in the fourth quarter. The measurement as part of the reclassification to assets held for sale and liabilities associated with assets held for sale resulted in an impairment loss of €1 million.

The sale of the Supply Chain business in China to S. F. Holding, China, was completed in February 2019, note 2.

The sale disclosed during the year of DHL Paket (Austria) GmbH assets to Österreichische Post as part of a long-term partnership was completed in August 2019.

13 Issued capital and purchase of treasury shares

KfW Bankengruppe (KfW) held a 20.5 % interest in the share capital of Deutsche Post AG as at 30 September 2019. The remaining shares are in free float.

Changes in issued capital and treasury shares

2018 2019
1,228,707,545 1,236,506,759
5,379,106 0
2,420,108 0
1,236,506,759 1,236,506,759
– 4,513,582 –3,628,651
–1,284,619 –393,421
2,169,550 3,039,077
–3,628,651 – 982,995
1,232,878,108 1,235,523,764

The issued capital is composed of 1,236,506,759 no-par value registered shares (ordinary shares) with a notional interestin the share capital of €1 per share, and is fully paid up.

The rights under the 2014 tranche of the Share Matching Scheme and underthe 2015 tranche ofthe Performance Share Plan were settled by 30 September 2019.

As at 30 September 2019, Deutsche Post AGheld 982,995 treasury shares.

14 Capital reserves

€ m
Balance at 31 December / 30 September 3,469 3,461
Capital increase through exercise of conversion
rights under convertible bond 2012 / 2019
102 0
Differences between purchase and issue prices of
treasury shares
7 0
Retirement / issue of treasury shares 26 5
Total for Performance Share Plan –2 – 4
Exercise –28 –22
Performance Share Plan
Addition
26 18
Total for Share Matching Scheme 9 – 9
Exercise – 64 –25
Share Matching Scheme
Addition
73 16
Balance at 1 January 3,327 3,469
2018 2019

Segment reporting

15 Segment reporting

Segments by division, 9 M

€ m

Post & Parcel
Germany 1
Express Global
Forwarding,
Freight
Supply Chain eCommerce
Solutions 1
Corporate
Functions Consolidation 1, 2
Group
2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019
External revenue 10,669 10,922 11,447 12,185 10,323 10,580 9,505 9,790 2,585 2,799 95 109 0 0 44,624 46,385
Internal revenue 250 272 277 273 653 694 102 75 184 159 1,052 962 –2,518 –2,435 0 0
Total revenue 10,919 11,194 11,724 12,458 10,976 11,274 9,607 9,865 2,769 2,958 1,147 1,071 –2,518 –2,435 44,624 46,385
Profit / loss from
operating
activities (EBIT)
311 708 1,387 1,428 281 348 336 735 –21 – 40 –264 –309 –2 0 2,028 2,870
of which net
income / loss
from invest
ments accounted
for using the
equity method
0 0 1 2 0 0 1 7 – 4 – 5 1 –3 1 0 0 1
Segment assets 3 5,577 6,024 13,766 15,157 8,728 8,872 8,248 8,076 1,750 1,649 4,935 5,442 – 96 – 86 42,908 45,134
of which invest
ments accounted
for using the
equity method
0 0 33 36 24 25 12 17 30 33 21 18 –1 0 119 129
Segment
liabilities 3
2,311 2,717 3,635 3,491 3,105 3,034 3,229 3,006 589 568 1,520 1,436 –75 – 62 14,314 14,190
Net segment
assets / liabil
ities 3
3,266 3,307 10,131 11,666 5,623 5,838 5,019 5,070 1,161 1,081 3,415 4,006 –21 –24 28,594 30,944
Capex (assets
acquired)
427 285 679 1,523 75 73 200 231 114 80 179 382 29 –2 1,703 2,572
Capex (right
of-use assets)
1 27 637 724 121 105 589 421 94 84 375 622 –1 0 1,816 1,983
Total capex 428 312 1,316 2,247 196 178 789 652 208 164 554 1,004 28 –2 3,519 4,555
Depreciation
and amortisa
tion
215 227 840 969 173 189 608 646 109 156 459 493 0 0 2,404 2,680
Impairment
losses
9 0 0 0 0 0 1 34 0 3 0 1 0 0 10 38
Total depreci
ation, amortisa
tion and
impairment
losses
224 227 840 969 173 189 609 680 109 159 459 494 0 0 2,414 2,718
Other non-cash
income (–) and
expenses (+) 446 136 213 253 46 32 133 157 15 51 62 27 – 5 1 910 657
Employees 4 159,032 158,262 93,550 96,507 43,347 44,265 151,877 155,439 29,493 30,878 12,272 12,629 0 –1 489,571 497,979

1 Prior-period amounts adjusted.

2 Including rounding.

3 As at 31 December 2018 and 30 September 2019.

4 Average FTEs.

Segments by division, Q 3

€ m

Post & Parcel
Germany 1
Express Global
Forwarding,
Freight
Supply Chain eCommerce
Solutions 1
Corporate
Functions Consolidation 1, 2
Group
2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019
External revenue 3,444 3,625 3,815 4,158 3,459 3,493 3,247 3,318 854 923 30 35 0 0 14,849 15,552
Internal revenue 76 88 91 89 224 223 24 29 61 41 364 335 – 840 – 805 0 0
Total revenue 3,520 3,713 3,906 4,247 3,683 3,716 3,271 3,347 915 964 394 370 – 840 – 805 14,849 15,552
Profit / loss from
operating
activities (EBIT)
–202 304 409 454 106 124 153 162 –7 6 – 82 –111 –1 3 376 942
of which net
income / loss
from invest
ments accounted
for using the
equity method
–1 0 0 1 0 0 0 2 –2 –2 1 –2 1 0 –1 –1
Capex (assets
acquired)
172 98 381 472 30 22 63 80 54 23 99 159 28 0 827 854
Capex (right
of-use assets)
0 1 352 184 41 23 210 146 47 37 64 345 –1 0 713 736
Total capex 172 99 733 656 71 45 273 226 101 60 163 504 27 0 1,540 1,590
Depreciation
and amortisa
tion
Impairment
72 78 291 334 59 62 213 212 38 57 156 169 0 –1 829 911
losses 9 0 0 0 0 0 0 9 0 –3 0 0 0 0 9 6
Total depreci
ation, amortisa
tion and
impairment
losses
81 78 291 334 59 62 213 221 38 54 156 169 0 –1 838 917
Other non-cash
income (–) and
expenses (+)
427 23 61 103 8 11 40 24 7 15 13 1 – 6 0 550 177

1 Prior-period amounts adjusted.

2 Including rounding.

Adjustment of prior-period amounts

Effective as at 1 January 2019, the Post - eCommerce - Parcel division was split into a German and an international division, each led by a separate member of the Board of Management. The German business was renamed Post & Parcel Germany. The international business is integrated into the new eCommerce Solutions division. The prior-period amounts were adjusted accordingly.

Information about geographical regions

€ m Europe (excluding
Germany Germany) Americas Asia Pacific Other regions Group
9 M 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019
External revenue 13,597 13,876 13,500 13,816 7,949 8,663 7,820 8,110 1,758 1,920 44,624 46,385
Non-current assets 1 9,229 9,874 10,065 10,043 6,740 7,824 4,563 4,608 524 610 31,121 32,959
Capex 1,169 1,603 840 886 1,026 1,567 403 359 81 140 3,519 4,555
Q 3
External revenue 4,414 4,596 4,446 4,527 2,763 3,004 2,652 2,770 574 655 14,849 15,552
Total capex 491 664 235 368 647 430 148 87 19 41 1,540 1,590

1 As at 31 December 2018 and 30 September 2019.

Reconciliation

€ m

9 M 2018 9 M 2019
Total income of reported segments 2,294 3,179
Corporate Functions –264 –309
Reconciliation to Group / Consolidation –2 0
Profit from operating activities (EBIT) 2,028 2,870
Net finance costs – 429 – 474
Profit before income taxes 1,599 2,396
Income taxes –224 – 527
Consolidated net profit for the period 1,375 1,869

16 Disclosures on financial instruments

The following table shows the fair values of financial instruments with each class of financial instrument presented by the level in the fair value hierarchy to which it is assigned:

Financial assets and liabilities

€ m
Class Level 1 1 Level 2 2 Level 3 3 Total
30 September 2019
Non-current financial assets 245 389 0 634
Current financial assets 4 27 0 31
Financial assets 249 416 0 665
Non-current financial liabilities 5,941 292 0 6,233
Current financial liabilities 9 110 0 119
Financial liabilities 5,950 402 0 6,352
31 December 2018
Non-current financial assets 231 398 0 629
Current financial assets 800 43 0 843
Financial assets 1,031 441 0 1,472
Non-current financial liabilities 5,687 652 0 6,339
Current financial liabilities 9 21 15 45
Financial liabilities 5,696 673 15 6,384

1 Quoted prices for identical instruments in active markets.

2 Inputs other than quoted prices that are directly or indirectly observable for instruments.

3 Inputs not based upon observable market data.

Level 1 comprises mainly equity and debtinstruments measured atfair 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 financial assets measured at amortised cost are determined, amongst other things, using the multiplier method. 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). Forthis purpose, price quotations observable in the market (exchange rates, interest rates and commodity prices) are imported from standard marketinformation platforms into the treasury management system. The price quotations reflect actualtransactions involving similar instruments on an active market. If currency options are used, they are measured using the Black-Scholes option pricing model. All significant inputs used to measure derivatives are observable in the market.

Level 3 comprises mainly the fair values of equity investments and derivatives associated with M & A transactions. They are measured using recognised valuation models,taking plausible assumptions into account. The fair values of derivatives as well as of assets and liabilities depend, to a large extent, upon financial ratios. Increasing financial ratios lead to higherfair values, whilst decreasing financialratios result in lower fair values.

As at 30 September 2019, the financial instruments categorised within Level 3 resulted in effects of €–20 million in other comprehensive income and €2 million in the income statement.

17 Contingent liabilities and other financial obligations

The Group's contingent liabilities and other financial obligations, such as purchase obligations, have not changed significantly compared with 31 December 2018.

18 Related party disclosures

As at 30 September 2019, John Gilbert stepped down from the Board of Management. Oscar de Bok assumed responsibility for the Supply Chain board department as at 1 October 2019. Dr Tobias Meyer has been head of the Post & Parcel Germany division since 1 April 2019. There were no other significant changes in related party disclosures as against 31 December 2018.

19 Events after the reporting date / other disclosures

There were no reportable events after the reporting date.

RESPONSIBILITY STATEMENT

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, 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, 11 November 2019

Deutsche Post AG The Board of Management

Dr Frank Appel Ken Allen

Dr Tobias Meyer Dr Thomas Ogilvie

John Pearson Tim Scharwath

Oscar de Bok Melanie Kreis

REVIEW REPORT

To Deutsche Post AG

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 30 September 2019, which are part of the quarterly financialreport pursuantto section 115 ofthe Wertpapierhandelsgesetz (WpHG – German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRS s 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.Ourresponsibility 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 ourreview 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 IFRS s 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 managementreports. 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 ourreview, 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 IFRS s applicable to interim financial reporting as adopted by the EU nor that the interim group management report has not been prepared, in all materialrespects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.

Düsseldorf, 11 November 2019

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

Dietmar Prümm Verena Heineke Wirtschaftsprüfer Wirtschaftsprüferin

(German public auditor) (German public auditor)

CONTACTS

Investor Relations Tel.: + 49 (0) 228 182-6 36 36 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

ORDERING

External E-mail: ir @ dpdhl.com dpdhl.com/en/investors

Internal GeT and DHL Webshop Mat. no. 675-602-585

Published on 12 November 2019.

The English version of the Interim Report as at 30 September 2019 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.

FINANCIAL CALENDAR 2020

10 March 2020 2019 Annual Report

12 May 2020 Interim Report as at 31 March 2020

13 May 2020 2020 Annual General Meeting 18 May 2020 Dividend payment

5 August 2020 Interim Report as at 30 June 2020

10 November 2020 Interim Report as at 30 September 2020

Further dates, updates as well as information on live webcasts: dpdhl.com/en/investors

Printed on EnviroTop, recycled paper produced from 100 % recovered fibre, which is manufactured climate neutrally and is, amongst other things, FSC certified, has Nordic Ecolabel 244 053 and complies with the EU Ecolabel AT/11/002 guidelines.

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.

Deutsche Post AG Headquarters Investor Relations 53250 Bonn Germany

dpdhl.com

Talk to a Data Expert

Have a question? We'll get back to you promptly.