DHL CEO: 'We have never been in better shape', company recovers from pandemic impact in 2Q2020

Deutsche Post DHL Group reported (05-Aug-2020) revenue increased 3.1% year-on-year to EUR16 billion in 2Q2020. The company attributed the growth to "its broad portfolio of logistics services and its global presence". Organic revenue growth reached 4.6%, mainly driven by strong growth in e-commerce. Operating profit increased 18.6% to EUR912 million. In early 2Q2020, business performance in express, air and ocean freight and warehousing was particularly impacted by pandemic protection measures imposed in Europe and North America. All five of the company's divisions generated operating profits 2Q2020. Details include:

• Post & Parcel Germany: Revenue increased 7% to EUR3.9 billion and operating profit increased 49.2% to EUR264 million. The improvement was due to cost and pricing measures implemented in both the mail and parcel businesses. The pandemic rapidly accelerated the long term trend of rising parcel volume and decreasing mail volume. The parcel business in Germany has been generating strong growth rates since late Mar-2020 due to the closure of retail stores and a corresponding boom in e-commerce;
• Express: Revenue increased 6.5% to EUR4.5 billion and operating profit increased 8.4% to EUR565 million. The division recorded a sharp drop in volumes in early 2Q2020 but volumes recovered, particularly in Asia, and ultimately reached the same level as 2Q2019. DHL attributed the success to the availability of its own freighter aircraft and effective adaptation to the altered utilisation of the network resulting from the pandemic;
• Global Forwarding, Freight: Revenue increased 9.7% to EUR4.2 billion and operating profit increased 53.2% to EUR190 million. The division faced a "severe" shortage of airfreight capacity due to the pandemic. However, amid declining volumes the capacity shortage led to a strong development of airfreight gross margin, which was the main reason for the division's successful performance;
• Supply Chain: Revenue decreased 18.2% to EUR2.7 billion and operating profit decreased 59.8% to EUR35 million. In addition to pandemic related revenue decreases, EBIT was negatively impacted by EUR62 million in non-recurring effects. The division reported very different developments depending on business sector, as the contract logistics business is more dependent on individual customer activities. Parts of the retail sector and the life science and healthcare sector developed positively, but business in the automotive sector weakened. The division concluded additional contracts worth EUR302 million in annualised revenue with new and existing customers;
• eCommerce Solutions: Revenue increased 16.8% to EUR1.2 billion and operating profit improved to EUR1 million, compared to a loss of EUR18 million in 2Q2019. The division's performance improved in the course of 2Q2020 as it optimised its portfolio and made progress in managing costs and boosting efficiency. The key forces behind the gains were B2C activities in Europe and America, which benefitted from rising shipment volumes.

CEO Frank Appel commented: "Especially now, our focus on our profitable core logistics businesses and the digital transformation of the company as part of Strategy 2025 pays off. We have never been in better shape and I am confident that our company will emerge stronger from the crisis". [more - original PR]