deutsche post dhl ubs european conference -...

Deutsche Post DHLUBS European Conference

Martin Ziegenbalg, Head of Investor RelationsLondon, 14 November 2012

2Deutsche Post DHL | PageMartin Ziegenbalg, Head of Investor Relations – UBS European Conference, London, 14 November 2012

Groundwork laid for profitable growth

Legacy homework done

• Restructuring completed; all businesses strategically well positioned

• Better risk & profitability discipline on contract, customer and investment decisions

Building our track record

• Strong balance sheet and disciplined capital allocation

• Institutionalized strong focus on cash generation and working capital management

• Key trends intact: TDI and parcel volume growth

Profitable growth focus

• MAIL: stabilization of EBIT at ~EUR 1bn, key driver parcel growth

• DHL: Further leverage growth and margin potential of our strong global footprint: 13–15% EBIT CAGR in 2010–15

2012 guidance confirmed: Group EBIT of EUR 2.6 – 2.7bn


Mail: strategic levers for EBIT stabilization in placeMail: strategic levers for EBIT stabilization in place

On track in a volatile environmentOn track in a volatile environment

DHL: strong positioning in structural growth marketsDHL: strong positioning in structural growth markets

Agenda

ExpressExpress

Global Forwarding, FreightGlobal Forwarding, Freight

Supply ChainSupply Chain


• Revenue increase driven by DHL divisions as well as FX effects. As Mail revenue declined slightly, organic growth in group revenue was 1.2%

• Group EBIT decrease due to Mail EBITbeing impacted by one less working day, 4% wage increase and Neckermann charge

• DHL EBIT continues steady growth despite volatile macro environment and ongoing spending towards growth and efficiency initiatives

• Lower Q3 taxes bring nine-months tax rate in line with new expected full-year rate of 24%

Continued growth in DHL EBIT

1) Attributable to Deutsche Post AG shareholders

Group P&L Q3 2012

-6.5%604646EBIT

-18.2%247302t/o Mail

-3.1%0.310.32EPS (in EUR)

-0.8%382385Consolidated net profit1)

34.8%-90-138Taxes

-6.5%-98-92Financial result

5.0%462440t/o DHL

5.7%13,83913,093Revenue

ChangeQ3

2012Q3

2011EUR m


Cash flow performance impacted by VAT payment

1) Included restructuring cash out of EUR -42m in Q3 2011 and EUR -13m in Q3 2012

2) Total cash payment related to 2012 VAT settlement of EUR 482m, o.w. EUR 27m paid in Q2

-5

-168

-20

-385

568

-64

632

Q3 20121)

-385-288Net Capex

450480Free Cash Flow

-13-16Net Interest

-20-42Net M&A

868826Cash from operating activities after changes in Working Capital

236191Changes in Working Capital

632635Cash from operating activities before changes in Working Capital

Q3 20121)

Q3 20111)EUR m

• VAT payment impacts Q3 FCF through EUR 300m decrease in working capital and EUR 155m interest costs2)

• Improvement in Operating Cash Flow excl. one-off effect from VAT

• Robust FCF excl. VAT, slight decline driven by increasedCapex for investments inselective growth markets

• FFO/Debt at 28.2% (year-end 2011: 32.3%)

Free Cash Flow Q3 2012

Excl. VAT


Net financial position impacted by usual H1 outflows, state aid,VAT payment and continued investments

Net Debt (-)/Liquidity (+)

Net debt

-977

All other effects

1.403

-477

Net dividend

-916

Net cash capex

-948

Changes in working capital

OCF(before

changes in working capital)

Net liquidity

938

31 Dec 2011

30 Sep 2012

-977

Incl. EUR -298mfor state aid payment

and EUR -482m for VAT

in EUR m


EBIT to FCF Conversion

Multiple levers to drive FCF improvement over the next years

Free Cash Flow

Net M&A

Net Capex

Income taxes paid

Changes in W/C

Changes in provisions

EBIT

Major drivers Expected Trend from 2013 onwards

In line with 2015 guidance: Group EBIT up to € 3.35-3.55 bn

9M 2012 includes VAT effect: strongcash generation in Q4 still to come

Utilization of restructuring prov. tailing off Pension payments declining slowly

To increase driven by EBIT growth

Institutionalized strong focus on working capital management

Normalization from current expectedgross levels of € 1.8bn in 2012/13

No need or ambition for major M&A


Group

Mail

DHL divisions

Corp. Center/ Other

EUR 2.6bn – EUR 2.7bn

EUR 1.0 – 1.1bn

~ EUR 2.0bn

~ EUR -0.4bn

2012 EBIT guidance, including all one-time effects – CONFIRMED

• Capex of max. EUR 1.8bn (vs. ~ EUR 1.8bn previously)

• Expected tax rate lowered to ~24% (from 27%)

• Net profit1) to improve in line with operating business

1) Excluding one-time effects from Postbank, VAT charge and EUR 99m release of restructuring provisions at DHL Express

Full-year 2012 Guidance


1) Underlying EBIT

2) 2012 Guidance

MAIL

DHL

Corporate Centre/Other

• EBIT stable at a minimum of EUR 1bn

• Improvement to EUR -350m by 2015

1.7 ~2.02)

2010 2011 2015

2.7 – 2.9

2014

CAGR 13 - 15%

1.451)

20132012

Group EBIT of EUR 3.35 to 3.55 bn in 2015

2015 Targets confirmed: MAIL EBIT stabilization, 13 – 15% growth in DHL EBIT to EUR 2.7 - 2.9bn

– DHL EBIT, in EUR bn –


• Dividend payout ratio to remain between 40–60% of net profit (continuity and Cash Flow position considered)- € 2.4bn1) paid out since January 2010 with dividend

CAGR of 8%

• Excess liquidity will be used for– Stepwise pension funding– Share buybacks and/or extraordinary dividends

Target / maintain rating BBB+

Finance Policy revisited

1) €0,60/ €0,65/ €0,70 per share for the years 2009, 2010, 2011

External cash usage





Agenda

ExpressExpress




219218234205194206265

m units

m units

• Further confirmation of Parcel growth trend even over seasonally lower summer period (+8.5% per working day)

• Decline in Mail Communication volumes in line with expectations (-2.3% per working day)

• Neckermann charge of EUR 10m in Q3 EBIT

• On track for full-year guidance as Q3 EBIT decline is due to combination of several transitional factors

Highlights MAIL Q3 2012

Parcel volumes

Mail Communication volumes

Milestones

1.7901.7802.0242.0591.8611.8422.047

-3.8%

Q4 11Q3 11Q2 11Q1 11 Q1 12 Q2 12

+6.8%

Q3 12

Q4 11Q3 11Q2 11Q1 11 Q1 12 Q2 12 Q3 12

-18.2%247302EBIT-1.9%3,2763,341RevenueChg.

Q32012

Q32011EUR m

Q3 volumes impacted by working day effect


MAIL: EBIT stabilization at a minimum of EUR 1bn – on track

EBIT Headwinds – as expected• E-substitution: Mail Communication vol/WD1) down -2.3% yoy YTD• Digital services: Short-/medium-term investing phase• Factor cost increases

FY 2012 moreover impacted by one-off effects: VAT settlement, Neckermann insolvency, less working days

EBIT stabilization: levers delivering despite expected headwinds

1) Volume per working day

Stabilization

EBIT Levers – delivering• Parcel growth: Parcel vol/WD1) up 11.5% yoy YTD (continued e-commerce boom)• Digital services: Mid-term contribution• Pricing: Mail price increase as of Jan. 1st, 2013• Ongoing cost optimization: Network & labor flexibility/productivity improvement


• e.g. Track & Trace, pre-alerts

• Packstation, retail outlet of choice, parcel boxes forprivate households (pilot)

Investments to capitalize on further growth – Parcel

1) Source: Bundesverband des Versandhandels; 2) Company estimate

E-commerce continues to grow strongly… … and we keep investing in driving parcel growth

+5% p.a.

32

502020

2011

E-commerce salesEUR bn1)

Transaction

Services

Delivery

1

2

3

www.paket.de

• Shopping platforms, convenience logistics, simple and secure payment solutions

Parcel Network Upgrade: > 40% more capacity, faster delivery

Driving parcel volumes

German parcel market growth:5-7% p.a. until 2015 2)


Targets

1.0 - 1.1

80%

≥ 1.0

≥ 90%

TargetsResultsEBITEUR billions

1.4 1.1 1.1

Employee satisfaction

66% 74% 76%

95% ≥ 95%Customer satisfaction

93% 93% 95%

2009 10 11 12 13 201514

Halfway through the Strategy 2015, we are on the right track, despite major challenges!

! Homework done –we are delivering!

Conclusion – we are well on the way to reaching our strategy 2015 targets





Agenda

ExpressExpress




Time Definite International (TDI) –Shipments per day ‘000s

Time Definite International (TDI) –Revenues per day1) in EUR m

• TDI volumes continue to grow yoy in all regions, reflecting market share gains driven by network upgrades and service excellence

• EBIT increase reflects volume growth. Ongoing investments in our network and training temporarily restrain EBIT margin expansion, as expected

• Opening of ground hub in Mexico• GPI (General Price Increase) of 5%2)

starting 1st January 2013 announced 579513 550 527 562 600 573

30,030.828.229.726.8 32.229.3

Q4 11Q3 11Q2 11Q1 11

Milestones

Highlights EXPRESS Q3 2012

1) Currency translation impacts are eliminated. Hence, 2011 and 2012 data are aggregated with the same currency rate

2) Global average, price increases vary by country/region

Q1 12

Strong performance of global TDI network continues

+6.4%

Q2 12

+8.7%

Q3 12

Q4 11Q3 11Q2 11Q1 11 Q1 12 Q2 12 Q3 12

6.9%231216EBIT9.0%3,1722,910RevenueChg.

Q32012

Q32011EUR m


Key growth and margin levers

1. Be strong in fastest growing regions2. Focus on TDI4)

3. Further improve customer satisfaction4. Continue investments in network

and service5. Leverage cross BU opportunities

6. Manage cost through operating leverage7. Increase brand awareness

+13 – 15% CAGR

EXPRESS: 2015 EBIT target and key levers

2015Renewal

2014Convergence

2013Margin

acceleration

2012Market share

growth

2011Invest for growth

2010 Business

stabilization

+13% – 15% CAGR

ON TRACK IN FOCUS1) Underlying EBIT and before the transfer of Czech domestic business to DHL Freight; 2) Reported EBIT; 3) EBIT before the transfer of the Czech domestic business to DHL Freight

4) Time Definite International

As presented on CapitalMarkets Day, May 2012

EUR 785 m1)

EUR 927 m3)

EUR 288 m

EUR 497 m2)


EXPRESS: Clear focus on global network

Best rated provider: leading global CI ranking in customer satisfaction, loyalty and value for money2)

Continuous investment in service quality: new Australia flight, Shanghai hub, Mexico expansion

Strong in fastest growing regions: global market share up to 32% with 4% share gain in Asia1)

Focus on TDI: Disposal of smaller Domestic businesses in Australia, New Zealand and Romania

Cost management: focus on network operations efficiency and indirect costs

1) Market Intelligence Study 2012, figures based on value share 2011

2) Customer Interaction Study 2012


Presence in over 220 countries and territories, pioneering Express business in many locations

The most international company in the world


Others29%

UPS3%

FedEx9% TNT

10%

DHL49%

Global [21,983 m€]

DHL32%

FedEx27%

UPS21%

TNT7%

Others13%

Europe [6,813 m€]

DHL41%

UPS23%

TNT14%

FedEx10%

Others12%

Americas [7,352 m€]Others3%

TNT1%

DHL16%

UPS30%

FedEx50%

Market share expansion continues across all regions

Asia Pacific [7,487 m€]

DHL40%

FedEx21%

UPS10%

TNT6%

Others23%

MEA [330 m€]

Source: MI study 2012, annual reports and desk researchAM: AR, BR, CA, CL, CO, CR, MX, PA, VE, US; EU: AT, BE, CH, CZ, DE, DK, ES, FR, IL, IT, NL, NO, PL, RU, SE, TR, UK; MEA: AE, ZA ; AP: AU, CN, HK, ID, IN, JP, KR, MY, NZ, SG, TH, TW, VN

21

Market Position in TDI – Value Share (€)

4 pptincrease vs

last year





Agenda

ExpressExpress




• Air Freight (AFR) volumes down by -4% in line with market, Ocean Freight (OFR) volumes grew above market, up 6%.

• No major peak season effects visible in AFR or OFR so far

• Solid Gross Profit (GP) development, with GP/ton up 11% in AFR and GP/TEU1) about flat (+0.9%) in OFR

• EBIT flat despite solid GP growth due to NFE implementation costs

Ocean freight ‘000s TEU1)

682648 686 708 672 716 751

+6.1%

Air freight ‘000s Tons

1,087 1,106 1,080 1.0391,105 992 1,046

Q4 11Q3 11Q2 11Q1 11

Milestones

Highlights GLOBAL FORWARDING, FREIGHT Q3 2012

1) Twenty Foot Equivalent Unit

Q1 12

Volume trends improving slightly

Q2 12

-3.8%

Q3 12

Q4 11Q3 11Q2 11Q1 11 Q1 12 Q2 12 Q3 12

-1.6%122124EBIT5.6%4,0183,804RevenueChg.

Q32012

Q32011EUR m


Key levers with impact on EBIT 2012 – 2015

201520112010

GLOBAL FORWARDING, FREIGHT: 2015 EBIT target and key levers

Volume & Gross Profit Improvement Volume growth due to exposures to emerging

markets GP2) margin improvement due to enhanced IT

(enhanced buying due to better transparency)

Cost Improvements Productivity gains due to economies of scale Indirect costs savings due to optimization of

regional and country organizational structures Efficiency gains due to new IT (NFE) 3)

Road Freight

+13 – 15% CAGR +13% – 15%

CAGR

1) EBIT before the transfer of the Czech domestic business from DHL Express to DHL Freight

2) Gross Profit


EUR 383 m1)EUR 429 m1)


FORWARDING, FREIGHT: Program for further growthand profitability improvement in place

SustainableGrowth

MaximizedProfitability

Transformation and NFE

• Dedicated sales channels for large and small-/ medium-sized customers

• Successful sales campaigns in Air Freight (“Fly it in”) and Ocean Freight (“Sea it, sell it”)

• Overhead cost structures continuously optimized • Focus on optimal cash collection

• NFE – new standard operating model • Global Service Centres for selective repetitive, non-customer

facing tasks• Organizational Blueprint to standardize structure across all

countries





Agenda

ExpressExpress




• Asia Pacific region once more with highest revenue growth

• EBIT growth driven by improved contractportfolio management along with continuedcost efficiencies

• New business wins of EUR ~290m annualized revenue confirm attractiveness of outsourcing (Q3 2011: EUR 280m). Biggest gains were in the Consumer and Life Sciences & Healthcare sectors this quarter

Highlights SUPPLY CHAIN Q3 2012

Steady business growth continues

Revenue by sector Q3 2012

10%

8%

18%

25%

Technology11%

Life Sciences &Healthcare

Consumer

19%

Retail

Others

6%Williams Lea

Energy3%

Automotive

Milestones

9.0%109100EBIT10.4%3,6703,323Revenue

Chg.Q3

2012Q3

2011EUR m


By far No.1 in a large and growing market with still significant outsourcing potential

2011

EUR 362m

2010 2015

EUR 272m1)

+13 – 15% CAGR

28

Contract Lifecycle Management

Standardization & Replication

Sector Focus

+13%–15% CAGR

SUPPLY CHAIN: 2015 EBIT Target and Key Levers

1) EBIT excluding restructuring


Reminder:Tutorial Workshop on Nov 27, London and

Nov 29, Frankfurt


Identify, standardize and growglobal products and solutions• Co-Packing• Lead Logistics Provider• Technical Service• Airline Business Solutions• Life Sciences & HC platform

Continuous improvementacross the entire contractlifecycle• Project selection• Design• Execution• Price / risk discipline

Sector Focus

Differentiate through sector-specific solutions• Global expert communities• Be the competent partner

for outsourcing in target sectors

• Leverage DHL customer contacts and brand

SUPPLY CHAIN: Strategic programs in place deliveringmargin improvement and further growth

Standardization & Replication

Contract Lifecycle Management


2012 guidance confirmed and key trends intact

• Continuing to deliver in a volatile environment, supported by ongoing strong Parcel and TDI growth

• Maintain focus on executing our strategy

• Focus on cash flow performance

• Further optimizing cost structures and building in flexibility

• Confirmation of 2012 and mid-term guidance

Priorities

Conclusion



On track in a volatile environment On track in a volatile environment


Agenda

AppendixAppendix


Deutsche Post DHL at a Glance

1) Average FTEs FY 2011

The postal service for Germany

Domestic German Mail and Parcel

Sales: EUR 13,973m EBIT: EUR 1,107mEmpl.1): 147,434

The logistics company for the world

International and Domestic Express

Sales: EUR 11,766m EBIT: EUR 927mEmpl.1): 86,100

Global Air, Ocean and Road Freight

Sales: EUR 15,044m EBIT: EUR 429mEmpl.1): 42,847

Global Supply Chain Solutions

Sales: EUR 13,223mEBIT: EUR 362mEmpl.1): 133,615

Corporate Center / Other: Sales: EUR 1,260m; EBIT1): EUR -389m

2011 key figures Group: Sales: EUR 52,829m; EBIT: EUR 2,436m; Employees1): 423,348


Reduction to € -350m by 2015CC / Other cost structure, 2011

Aiming to reduce cost of Corporate Center / Other activities to € -350m by 2015

100% = € ~400m1)

~25%

~55%

~20%

Corporate Center / Other

1) excluding gains/losses from central FX hedging measures

€ -350m€ -400m

20111) 20151)

Corporate bodies (e.g. CB, SVB)and legal obligations/ foundations

Core Corporate Center costs, e.g.• Group Finance, e.g. Internal Audit,

Treasury, Tax• Corporate Communications• Corporate Development• Corporate Executive HR• …

Investments into growth & cross-div. initiatives(e.g. “Go”initiatives, Smart Truck, Cold Chain)

~25%~25%

~50%


58%

88%

59%

Dividend development since introduction of new finance policy

• Increase of the dividend of 7.7% to EUR 0.70

• Adjusted for Postbank effects and non-recurring items this reflects a payout ratio of 58% (2010: 59%)

• In line with our dividend policy: target payout ratio of 40 – 60% and commitment to dividend continuity

Dividend increased to EUR 0.70

1) Adjusted for Postbank effects as well as non-recurring items booked in 2009 and 2010

Investment of Choice

2009

0.60

2010 2011

0.700.65

Underlying Payout Ratio1)


DHL

Mail

1998–2007 2014–20152011–20132008–2010

Level of M&A

Level of Capex

Restr. cash requirement

DPDHL transitioning to high Cash Flow generation

EBIT Performance

Special factors

StableStable

Strong improvement

High, but decreasing

Improving

Average

Very high

Low

State aid (–)

Low

Very low

Very high

State aid (+)Postbank sale (+)

High

Very low

Low

State aid (–)VAT (–)

Average

Very low

Very low

State aid (+) ?

High, but decreasing

HighLow

Cash conversion


• Revenue slightly down as working day effect and the expected decline in Mail volumes were only partly compensated by Parcel growth

• Reminder:

• EBIT decrease reflects EUR 10m charge for Neckermann insolvency and effect of wage increase on seasonally weakest quarter

• Operating cash flow includes EUR-269m impact from VAT settlement

• Capex slightly up yoy due to continued investments into the network, e.g. Parcel

8.9%9890Capex

NA-56407Operating Cash Flow

-18.2%247302EBIT

-1.9%3,2763,341Revenue

ChangeQ3

2012Q3

2011EUR m

EBIT decline due to combination of wage increase, less working days and Neckermann write-down in seasonally weakest quarter

MAIL – Divisional Results Q3 2012

Q1 Q2 Q3 Q4+1 -1 -1 -2

yoy working days in Germany


Rate of e-substitution in Germany is lower than in other countries• High quality:

Over 95% D+1 in Germany,(91% in UK and 85% in France)

• Excellent customer orientation: 95% satisfaction1) (93% in 2010)

• Many volumes already substituted

• Different mail structure: volumes in Germany determined by stable number of households (vs. e.g. mailed checks in the US)70

7580859095

100105110

2005 2006 2007 2008 2009 2010 2011

USA UK Netherlands

France Austria Germany

Globaleconomic crisis

Addressed mail volumePercent, 2005 = 100%

98

86

79

1

Compared to other markets, mail volumes in Germany are stabilizing

Source: Regulatory authorities; USPS; Royal Mail; Austria Post, estimate for Austria 2005 (2005 = 2006); figures Germany 2011: internal estimate; 1) Kundenmonitor study 2011: private mail customers

!Effects of e-substitution are manageable


The new price-cap formula …… provides opportunities for

potential future price increases

3.6+2.8%3.54)EUR billions

The new price-cap formula offers opportunities for future price increase

• Price-cap = inflation – x-factorx-factor reduced from 1.8% to 0.6%

• Reference period1) brought forward by 6 months

• Regulation valid untilDecember 31, 2013

No price increase for 2012 – insteadbuffer of 1.2% carried over to 20132)

2.2% inflation in 2013 reference period allows for additional pricing headroom of 1.6% Average price increase of 2.8%3) on Jan 1, 2013, standard letter stamp increase from €0.55 to €0.58

Indicative example based on 2011 revenue

2

1) For relevant CPI = German Consumer Price Index; 2) 1.2% = 1.8% inflation rate minus 0.6% x-factor; based on arithmetic average of the monthly CPI values from July 2010 - June 2011; 3) 2,2% inflation rate - 0.6% x-factor + 1.2% carryover = 2.8% price increase, based on weighted average across the relevant Mail product portfolio as per price-cap regulation; reference period for 2013 price cap is July 2011 - June 2012; 4) 2011 revenues affected by under price-cap regime

! After 15 years, we have the opportunity to compensate volume decreases also by increasing prices


• Increase automation rate with state-of-the-art sorting technology (up to 95% of mail volumes)

• Ongoing reduction of delivery districts and personnel(17% reduction since 2002)

• Increase of packed and sequenced mail directly transported to delivery districts (from 70% to over 90%)

• Preventive healthcare measures, new delivery equipment to significantly reduce sickness rate (currently 4.8%)

• Flexible workforce: over 4,000 employees on call at short notice; over 9,000 employees on short term contract

• Flexible rerouting and reduction of sorting capacity during low-volume periods

We are improving our letter mail operations …

Sorting

Trans-port

&Delivery

… resulting in ample cost flexibility

3

We are continuously adapting our operations to the development of mail volumes by increasing efficiency

!We have numerous cost reduction and optimization levers in place


Labor flexibility and productivity Employee satisfactionLong-term union agreement

• Starting wages1) reduced by 4%

• Historic Generations pact:– Innovative pre-retirement

worktime model– Over 7,000 applications for

worktime accounts since Jan 2012

• Continued outsourcing– 990 parcel delivery districts – 1,000 external

transport drivers

New wage agreement• Moderate wage increase of 4%

after 2 years of pay freeze• One-time payment of

EUR 400 in December 2011• Commitment to

avoid layoffs for business reasons extendeduntil 2015

3

We have laid the foundation for further increase in labor productivity

Source: Long-term union agreement (October 6, 2011); wage agreement (January 12, 2012, valid for 15 months); 1) for new employees;

!We have considerable flexibility to adjust our factor costs


50

32

+5% p.a.

2011

2020

= 32 bn €

20

8

+11% p.a.

• Convenience as a key driver for e-commerce:– 3 out of 4 online shoppers believe

e-commerce has improved their quality of life– Over 40% claim they save time

German parcel market:growth of 5-7% p.a. until 2015

• B2C growth 11-13% p.a. by e-commerce adoption independent of GDP development

• B2B growth 3-5% p.a.depending on GDP and export development

... and is driving parcel volumes

E-commerce salesEUR billions1)

Share of retail spendingPercent2)

4

1) Bundesverband des Versandhandels; 2) TNS Infratest und MRSC, “Einkaufen 4.0”, Gesellschaft für Konsumforschung

= 80 bn €

E-commerce is growing strongly ...

With DHL Parcel we are shaping a dynamically growing market environment

! We are profiting from a fast growing market


Aim to increase market share and secure growth rates above market average

Target2015

5.0

10

1.5

2006

0.4

• Network upgrade “Paket 2012”

• DHL-Fulfillment

• DHL-checkout

Simplified services …

47 40

53

Other

Parcel

20152010

No. of registered customers …… will boost our B2C market share

… will help to grow our B2B market share

revenue increaseabove market growth

81 75OtherParcel

2015

20-25

2010

19

Millions Percent

Percent

DHL

20152010

6

55-60

! Parcel Germany is a solid growth story


Parcel Germany: Strategic Focus

• DPDHL only postal organization world-wide to offer nation-wide 24/7 access to all shipping needs

– 13,500 retail outlets

– 1,000 Parcel Boxes for 24/7 drop-off

– 2,500 automatic PACKSTATIONs to drop-off, frank, or use as delivery address

– Online Franking of all parcel products

– iPhone and Android apps for all services

• To date 2mn registered Packstation customers

• 83% check whether vendor ships to Packstation before purchase

• 36% increase their online spend after registration for Packstation

• Target group in age segment 25–50 years with high online affinity

Parcel Germany is shaping eCommerce as the leading service provider

Source: Europäisches Handelsinstitut


Clear market leadership in Asian TDI

No. 1 in air freight, No. 2 in ocean freight

Market leader in contract logistics in Asia

Revenue 20111): EUR 11.4bn

Revenue 20111)2): EUR 10.9bn

Revenue 20111): EUR 13.1bnAsia Pacific

Others

30%

Others

Asia Pacific

26%

Others

Asia Pacific9%

Asia Pacific

Others

19%Revenue 20111): EUR 38.9bn

1) External revenue = revenue generated by the divisions from non-Group third parties; 2) excl. DHL Freight

DHL Asia: A Strong Contributor to the Group


Leverage of one DHL helps to manage risks and recover high investments for network expansion

Intercon. capacity – utilization – DGF contribution

• DGF contributescontinuously around 18% to our overall cargo loads1)

• DGF is our no. 1 ACS customer

• For DGF we improved from no. 8 in 2010 to the no. 3 supplier in Q1 2012

1) Including regional capacities

Leverage cross business unit opportunities

CAGR +30%

Cap

acity

milli

on T

ons

1.5

1.0

0.5

0.0201120102009

WLF: 70%

WLF: 79%

WLF: 75%

Weight Load Factor(Core TDI & Non Core (ACS) Volumes)


Robust business growth across all regions

EXPRESS – Divisional Results Q3 2012

• Revenue increased due to continued strong volume growth in TDI despite volatile economic environment and supported by FX gains. Adjusted for FX gains and disposals of Domestic businesses (Aus, NZ), organic growth was 4.3%

• EBIT increase reflects international volume growth while ongoing investments in our network and training temporarily restrain EBIT margin expansion, as expected

• Operating cash flow impacted by cash-out for early termination of the co-operation agreement with ASTAR Air Cargo and VAT payment in Germany

• High Capex level maintained; reflects ongoing investments in global network

4.4%141135Capex

-9.5%332367Operating Cash Flow

6.9%231216EBIT

9.0%3,1722,910Revenue

ChangeQ3

2012Q3

2011EUR m


Express strategy to focus on TDI is crucial to further drive EBIT and margin development

Focus Strategy

• Complementary offerTDD

Margin

• Volume shift to TD platform • Opportunistic offer for additional

cost recovery• Divest over time

Other (incl. DDI, DDD, ACS1) Same Day)

Aspiration

• Core competence with dedicated scheduled network

TDI

CommentProductRevenue contribution by product (FY 2011)

>

<

> Above DHL Express average < At or below DHL Express average

>

Other, 42% TDI;

58%

2009

Other, 39%

TDI; 61%

2010

Other, 37%

TDI; 63%

2011

Positive TDI revenue share development

1) ACS: Air Capacity Sales

Focus on TDI

TDD; 11%

Other; 26%

TDI; 63%


Our overall network setup as well as concrete programs support the translation of volumes into additional EBIT

One virtual airlinePuD and handling

• Capacity management to stabilize CpK (Cost per Kilo)

• Reduction of commercial aircapacity by improved forecasting

• Flexible leasing arrangements• Modernization of fleet to reduce

fuel and carbon emissions

• NOEP (Network Optimization and Efficiency Program) to reduce ground handling cost

• Re-fleeting with shelf vehicles optimize processes and reduce fuel and emissions

Save 2.5% per move p.a. StabilizeOverhead cost

• Reduction of Sales, general and admin expenses as % of revenue– IT Convergence– E-Com Tools– Improved span of control

Save >1% of revenue

• Fuel price volatility: Industry wide transparent fuel surcharge mechanism• FX rate exposure: Global currency portfolio as natural hedge on currency volatility

Manage cost through operating leverage


Good to Great for our customers

Increased sorting capacity from 8,000pph to 40,000pph

Leading edge automation for high accuracy and speed

24/7 Quality Control Center to ensure excellent reliability

First in Shanghai to handle international transshipments

Improve transit time with more efficient air routing intra North Asia

Expanded network between North Asia, Global and Regional Hubs


New North Asia Hub in Shanghai

Opening : 12 July 2012

Regional Express Hubs in Asia Pacific

North Asia Hub Shanghai at Pudong International (PVG)

• First-class Express hub

• Part of multi-hub strategy in Asia Pacific

• Investment of USD 175m

• New capacity, greater flexibility and reliability for guaranteed time-definite delivery

ManilaTaipei

Beijing

Bangalore

Delhi

AucklandSydney

BangkokSingapore

North Asia Hub Shanghai

Seoul

Central Asia Hub Hongkong

HubsRegional HubsCommercial Air Hubs


• Revenue growth mainly driven by FX effects. AFR revenue flat while OFR revenue posted double-digit increase driven by volume growth and higher freight rates

• EBIT flat despite solid GP growth due to NFE implementation costs

• Strong Operating Cash Flow driven by higher DPO levels

• Lower Capex related to phasing in NFE roll-out (New Forwarding Environment)

FORWARDING, FREIGHT – Divisional Results Q3 2012

-18.4%3138Capex

83.6%246134Operating Cash Flow

-1.6%122124EBIT

5.6%4,0183,804Revenue

ChangeQ3

2012Q3

2011EUR m

Solid GP development – EBIT flat due to NFE implementation cost


• Performance benchmarking on product level is impacted by differences in accounting – key DGF competitors allocate value added services to AFR or OFR

• DGF has chosen to account for VAS separately under category called ‘Others’. This allows to measure true performance on product level

• When relevant VAS (customs, handling, cartage) are allocated to AFR & OFR to improve comparability, DGF’s GP margin is in line with peers

• GP margin in AFR benefits from DGF’s large scale, while OFR reflects its share of uncontrolled volumes

Gross Profit margin 2011(in %, Air Freight)

Gross Profit margin 2011(in %, Ocean Freight)

1) Including value-added services; Note: GP margin absolute level not fully comparable due to different revenue recognition principles across competitorsSource: Official company publications

21.0%21.6%23.4%19.9%

24.2%

DG

F

DG

Fco

mpa

rabl

e1)

19.0%21.6%20.6%18.9%20.7%

DG

F

DG

Fco

mpa

rabl

e1)

What about fuel costs?Fuel costs have not a significant impact on DGF as they are passed through costs

Maximized profitability: GP on product level reflects our size advantage and product portfolio


101 429

EBITDepr.DOE + SLA1

2,991

30%

5%

65%

Gross Profit

3,522

• In 2011 Sales Direct Operating Expense(DOE) reduced in reaction to slowdown in market volumes

• Executed optimization of head offices organizational structures to reduce costsand to better position DGFF for growth

• Further streamlining through country alignment program under way, which is expected to bring cost benefits

• Special management focus on turn around of underperforming countries

• Staff costs represent the largest part of DOE but significant productivity gains without automation will not be possible

• Therefore, DGFF needs better IT platform to bring productivity on new level and DGFF is investing in a transformational program –New Forwarding Environment

DGFF Gross Profit to EBIT conversion 2011(in €m) Maximizing profit by cost management focus

Staff Costs

Travel & Telecom

Other

1) SLA = Service Level Agreement, DOE = Direct Operating Expense

Maximized profitability: direct operating expense is key lever for EBIT conversion improvement


Standardization and industrialization allows significant bottom-line cost reductions

Innovation will drive top-line revenue growth

NFE is the business transformation program of DHL Global Forwarding to underpin its market position as industry leader

NFE program will underpin profitable growth for DHL Global Forwarding

New Forwarding Environment (NFE) –Thinking today about tomorrow

Timeline?• Forerunner pilots ongoing; full IT pilots Q2 2013• Roll-out by 2014/ 2015


• Revenue increase reflects growth in existing contracts and new start-ups as well as positive FX effects. Organic revenue growth of 2.7%

• EBIT growth driven by improved contractportfolio management along with continuedcost efficiencies

• Operating cash flow shows good turnaround driven by tighter working capital management

• Capex reflects continued investment in new contracts and selective growth infrastructure

290280New gains

Contracts won – Annualized revenue

20.7%7058Capex

>100%21786Operating Cash Flow

9.0%109100EBIT

10.4%3,6703,323Revenue

ChangeQ3

2012Q3

2011EUR m

Strong operational execution drives sustained EBIT growth

SUPPLY CHAIN – Divisional Results Q3 2012

56Deutsche Post DHL | PageMartin Ziegenbalg, Head of Investor Relations – UBS European Conference, London, 14 November 2012 56

Contract Logistics is a large and growing market with DHL Supply Chain being number 1 by far

Total market size, €bn Top 3 market shares, 2011

OtherLargest providers

88% ~12%

K+NCEVA

DSC

Largest providers

~12%

2.1%2.4%

7.7%

155

203

2015

1,178

975

2011

969

813

In house LogisticsOutsourced Contract Logistics

5%

CAGR


Balanced revenue portfolio by sector

• Balanced industry sector coverage

• Dedicated global sector teams

• Deep sector expertise including to sub sector level

9%

7%

12%

17%

20%

26%9%Energy & Other

Auto

Tech

Consumer

Retail

Williams Lea

Revenue 2011 by sector Comments

Life Sciences &Healthcare

(details to follow)


Standardization & Replication of global products

Global products development Overview of global products

Define standards and leverage best practice globallyDevelop

Focus on target customers, enable teams, and grow the product globally

Grow

Assess

Identify solutions with potential for growth and differentiation

Airline Business Solutions

Co-Packing

Lead Logistics Provider

Life Sciences & Healthcare Platform

Technical Services

Marketing Solutions


Disclaimer

This presentation contains certain statements that are neither reported results nor other historical information. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Deutsche Post AG’s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. Deutsche Post AG does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation.This presentation does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor shall there be any sale, issuance or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law. Copies of this presentation and any documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from Australia, Canada or Japan or any other jurisdiction where to do so would be unlawful.This document represents the Company‘s judgment as of date of this presentation.


Investor Relations Contacts

Sarah Bowman• +49 228 182 63204 • E-mail: [email protected]

Sarah Bowman• +49 228 182 63204 • E-mail: [email protected]

Sebastian Slania• +49 228 182 63203• E-mail: [email protected]

Sebastian Slania• +49 228 182 63203• E-mail: [email protected]

Daniel Stengel• +49 228 182 63202• E-mail: [email protected]

Daniel Stengel• +49 228 182 63202• E-mail: [email protected]

Martin Ziegenbalg, Head of Investor Relations• +49 228 182 63000• E-mail: [email protected]

Martin Ziegenbalg, Head of Investor Relations• +49 228 182 63000• E-mail: [email protected]

Robert Schneider• +1 212 381 3462• E-mail: [email protected]

Robert Schneider• +1 212 381 3462• E-mail: [email protected]

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