Deutsche Post DHL Group remains on course for growth [Integrator]
Group revenue up EUR 1 billion to EUR 14.9 billion
Operating profit improves to EUR 885 million
EBIT forecast for full year 2017 confirmed: Earnings expected to increase to approximately EUR 3.75 billion
CEO Frank Appel: "We are seeing positive results at the half-time mark of our Strategy 2020"
Deutsche Post DHL Group increased revenue significantly in the first quarter of 2017 and posted a further improvement in operating profit. Group revenue climbed by more than EUR 1 billion to EUR 14.9 billion. All four divisions contributed to the strong growth. Volumes and revenue saw substantial growth in particular in the German and international Parcel and eCommerce businesses as well as the global Express business. With Group EBIT of EUR 885 million, Deutsche Post DHL Group surpassed the good prior-year result and registered the strongest first quarter in the company's history1.
"Following a record year in 2016, the upward trend has continued at Deutsche Post DHL Group this year. We reported growth in all four divisions in the first quarter: Our strategy is working, and we are confident that we will achieve our targets for 2017," said Frank Appel, CEO, Deutsche Post DHL Group.
Strategy 2020: Positive half-time assessment
Deutsche Post DHL Group is seeing good results at the half-time mark for its Strategy 2020, which the company introduced in 2014. Key milestones have already been reached. All four divisions have been positioned to leverage growth opportunities, particularly in the e-commerce sector. The company has successfully expanded its Parcel business into international markets, and has also introduced new solutions in its Express business to continue capitalizing on the booming online commerce sector. The Global Forwarding, Freight and Supply Chain divisions are more streamlined and efficient today and therefore positioned for sustainable growth.
"Our team has managed the first half of Strategy 2020 very successfully. Our strategic measures are already clearly paying off. At the same time, we continue to work hard to expand our global market leadership. We are developing trend-setting innovations, moving into new fields of business and leveraging the opportunities presented by digitalization. Our company is already ideally positioned to achieve its strategic and financial targets for 2020," said Frank Appel.
Outlook: Earnings targets confirmed for 2017 and beyond
Deutsche Post DHL Group expects the global economy to grow moderately in 2017. After a good first quarter, the Group has maintained its forecast of increasing EBIT to around EUR 3.75 billion. Additionally, Deutsche Post DHL Group continues to forecast that operating profit will increase by an average of more than 8% annually (CAGR) during the period from 2013 to 2020.
First quarter of 2017: Growth in all four divisions
Group revenue grew significantly by 7.3% to EUR 14.9 billion in the first three months of the year. The company's operating profit increased by 1.4% to EUR 885 million in the first quarter. Adjusted for the non-recurring positive effect posted by Supply Chain in 2016, the increase in EBIT was 6.0%. The improvement in the Group's profitability was driven largely by Express, with a significant double-digit growth in operating profit.
Consolidated net profit after non-controlling interests was slightly below the prior-year level at EUR 633 million (2016: EUR 639 million), due to a higher tax rate. Basic earnings per share decreased correspondingly, edging down from EUR 0.53 in the previous year to EUR 0.52 in 2017.
Capital expenditure: Foundation for growth further strengthened
Deutsche Post DHL Group invested EUR 334 million in the first quarter of 2017 (2016: EUR 411 million). Investments continued to focus on positioning the Group for future profitable growth in all four divisions. For example, the Group made further progress in extending its domestic and international parcel infrastructure and invested in the production of its StreetScooter electric vehicle, in addition to expanding global and regional hubs in the Express division and modernizing and expanding the aircraft fleet.
Substantial year-on-year increase in cash flow
The Group saw free cash flow of EUR -430 million in the first quarter (2016: EUR -700 million). This substantial increase was mainly the result of improved working capital management. The significant cash outflow in the first quarter reflects the usual seasonal trend for Deutsche Post DHL Group. The company's cash flow is regularly impacted at the beginning of each year by the annual prepayment made to the Federal Post and Telecommunications Agency for civil servant pensions. The contribution for 2017 was EUR 493 million.
Post - eCommerce - Parcel: German and International Parcel business continues to grow
Revenue in the Post - eCommerce - Parcel (PeP) division increased by 6.4% to EUR 4.5 billion in the first quarter. This positive development was attributable in the main part to growth in volumes and revenue in the eCommerce - Parcel business unit, which increased revenue by 17.5% to EUR 2.0 billion. The increase was based on revenue gains of 6.1% for Parcel Germany, 70.3% for Parcel Europe and 13.7% for eCommerce. A key positive factor behind the strong increase in revenue at Parcel Europe was the inclusion of the UK Mail business in the unit's consolidated results after successful completion of the acquisition of the British company in December. In the first quarter, UK Mail had revenue of EUR 139 million. The integration of UK Mail shows that PeP is making good progress in the expansion of its 'United Parcel Nations of Europe'. At the beginning of the year, the division also extended its European network to include Spain and Portugal. In the international eCommerce business, the domestic U.S. and the cross-border Asian businesses, in particular, are growing dynamically. The positive development in the eCommerce - Parcel business unit shows once again how Deutsche Post DHL Group continues to benefit from its successful positioning as market and innovation leader in the high-growth e-commerce segment.
In the Post business unit, revenue saw a slight decrease of 1.2% to EUR 2.5 billion due to structural volume declines mainly in the area of Mail Communication.
EBIT in the PeP division improved to EUR 425 million in the first quarter (2016: EUR 414 million).
Express: Success story continues
In the first quarter, the Express division again continued the very good revenue and earnings development seen over several years, with both indicators registering double-digit increases. Revenue rose by 13.0% to EUR 3.6 billion. This dynamic performance was once again driven by solid growth in the international time-definite (TDI) delivery business, where daily volumes rose by 8.0% in the first quarter year-on-year, supported by successful yield management.
The division's EBIT increased by 11.5% to EUR 396 million. This very strong performance was attributable to further network enhancements, rapid international growth and pricing initiatives. The operating margin stood at 11.0% in the first quarter.
Global Forwarding, Freight: Revenue growth in air and ocean freight
Revenue in the Global Forwarding, Freight division climbed by 6.6% to EUR 3.5 billion in the first quarter of 2017. In line with the positive market trend, the division registered significant growth in revenue and volumes in both the air freight and ocean freight businesses.
However, the price situation remains challenging overall. Although market freight rates increased significantly in the first quarter, it was not possible to pass on the higher buying rates in full to end customers in the short term. The division's gross profit margin declined as a result, while operating profit decreased from EUR 51 million to EUR 40 million.
Supply Chain: Positive operating performance in all regions
Revenue in the Supply Chain division increased by 3.8% to EUR 3.5 billion in the first quarter. The higher revenue was based on dynamic business development in all regions. Supply Chain continued to generate additional new business. In the first quarter, the division concluded additional contracts worth EUR 192 million with both new and existing customers.
Operating profit decreased to EUR 99 million (2016: EUR 127 million). Adjusted for the net one-off effect of EUR 38 million recorded in 2016, EBIT for the first quarter of 2017 increased by 11.2%.
Posted at 21:54 パーマリンク
UPS To Acquire Ireland-Based Nightline Logistics Group [Integrator]
mmediately vaults UPS to a leading market position in Ireland
Complements UPS products, creating broadest portfolio in country
Creates additional cross-border and domestic growth opportunities for B2B and B2C customers
UPS (UPS) announced the company has entered into a definitive purchase agreement to acquire Nightline Logistics Group, one of the leading express delivery and logistics companies in Ireland. UPS continues to create new market growth opportunities, and this acquisition will immediately position UPS as one of the top local shippers in Ireland. By integrating Nightline with UPS, customers will now have a wider array of both domestic and cross-border services.
Nightline is a privately held company. Terms of the acquisition were not disclosed and the deal is subject to customary closing conditions, including regulatory approval.
“Operating for more than 40 years in Europe, and almost 30 years in Ireland, UPS continues to build a powerful portfolio of services for our customers throughout the region,” said Jim Barber, President, UPS International. “Nightline will complement our existing services, increasing delivery density, while also adding innovative new service options. We also look forward to bringing UPS’s extensive healthcare, high-tech and other specialized logistics expertise to the many Irish companies that specialize in these markets.”
Nightline is a leader in developing and deploying innovative consumer-focused services, in addition to its business-to-business services.
“Over the past 25 years, Nightline has grown to be one of Ireland’s leading privately-owned parcel delivery, freight and logistics companies,” said Nightline co-founder and CEO, John Tuohy. “As we celebrate over two decades in business, this is the right time in the company’s evolution to join the world’s largest parcel delivery company – one with a reputation for taking care of its people and a culture that aligns well with our own. Our customers across Ireland, Northern Ireland and Great Britain will benefit from an even wider reach, enjoying direct connectivity to global export markets, and it will be an important milestone in the company’s growth into the future.”
Nightline’s Parcel Motel service offers a 'virtual address' that allows customers to manage their online shopping deliveries easily. The service is similar to UPS Access Point™ Lockers and creates the potential for network synergies.
“Ireland has long been a strong, global trade player, exporting and importing heavily with some of the world’s largest economies, including the UK, United States, Germany, China, and France, among others,” said UPS Europe Region President, Nando Cesarone. “With the addition of Nightline, we continue on our growth path in Europe, and will now be able to better serve customers who export into, and out of, Ireland. This is in addition to UPS’s commitment announced in 2014 to invest U.S. $2 billion in its European infrastructure by 2020.”
UPS currently provides both small package and supply chain services to customers in Ireland, with a full suite of ground, air and ocean freight solutions. The company also operates gateway functions at both the Dublin and Shannon airports.
With the combination of both companies’ operations, UPS will significantly enhance its presence in Ireland, adding more ground sorting capacity and vehicles throughout the country.
Initially, the two brands will operate separately. Over time, the businesses will be integrated and customers of both companies will realize a benefit from the combination.
Posted at 11:12 パーマリンク
Panalpina to acquire Kenyan freight forwarder specialized in perishables [Forwarder]
International freight forwarding and logistics company Panalpina is to acquire Air Connection, a Kenya-based forwarder specialized in the export of flowers and vegetables. The move comes after Panalpina’s acquisition of Airflo in Kenya in 2016 and only two weeks after the company formally announced the launch of its global Perishables Network.
Panalpina will acquire the family-owned Kenyan company Air Connection, subject to conditions. The companies reached a respective agreement on May 2, 2017.
“The acquisition of Air Connection will strengthen our existing global Perishables Network and our position as the clear market leader in the perishables arena in Kenya,” says Stefan Karlen, Panalpina’s CEO. Air Connection is specialized in the export of flowers and vegetables from Kenya to multiple destinations including the Netherlands and the UK, and is currently the country’s fourth largest forwarder in terms of air freight export volumes. The merged company will handle around 70,000 tons of perishables air freight per year.
The activities of Panalpina and Air Connection in Kenya complement each other. “While most of Panalpina’s flower exports from Kenya currently go to auctions in Amsterdam, we are specialized in direct shipments to customers,” says Manjit Brar, owner and managing director of Air Connection. “And while Panalpina is strong with big charter shipments from Kenya to Europe, our strength lies in smaller shipments on scheduled passenger flights to over 150 destinations worldwide.”
Direct shipments are a trend in the perishable market, explains Conrad Archer, managing director of Panalpina Airflo: “Increasingly, buyers of perishables want to source directly from the producer and producers want to sell directly to the country of consumption. Direct shipping bypasses intermediaries, reducing touch points in the supply chain. It removes unnecessary costs, potential delays and most importantly allows a fresher product to be offered to the consumer. At the same time, this development will make sophisticated end-to-end solutions even more important than today. Joining forces with Air Connection will offer additional opportunities to grow the perishables business in Kenya, especially with the export of vegetables, herbs and cuttings.”
The merged company will employ over 350 staff in Nairobi and offer 3,000 m2 of cold storage capacity, which is soon to be extended even further to 4,000 m2. It will also run an office at the port of Mombasa where Panalpina plans to develop the ocean freight business for both perishables (using reefers) and dry cargo. The dry cargo activities involve the import of textiles and export of fashion products, mainly to the USA. Manjit Brar, who founded Air Connection in 1993, will remain as a consultant.
The companies have agreed not to disclose any financial details of the deal. The acquisition is subject to approvals by the relevant competition authorities.
Posted at 21:16 パーマリンク
Panalpina expands footprint in Denmark [Forwarder]
As part of its global growth strategy, Panalpina has acquired Carelog, a Danish freight forwarding and logistics company with a strong foothold in ocean freight and roots in the western part of Denmark. Carelog and Panalpina complement each other ideally in terms of geography, product strengths and customer mix.
Panalpina World Transport (Holding) Ltd. has acquired a majority stake in Carelog Freight Service A/S and its subsidiaries. The transaction was completed yesterday in Copenhagen, Denmark.
“We want to increase our market share in Denmark,” says Stefan Karlen, Panalpina’s CEO. “The country has many export-oriented companies and its biggest industries, namely manufacturing, consumer, retail, fashion as well as healthcare, are industries that we focus on and serve globally.”
Founded in 2008, the Danish freight forwarding and logistics company started out with customers in the furniture and fashion industry and then expanded to other sectors such as machinery and agriculture. While Carelog is especially strong in ocean freight, Panalpina is traditionally strong in air freight. The merged company employs approximately 70 people that provide ocean freight, air freight and logistics services from six locations in all regions of Denmark including in Copenhagen, Aarhus and Odense.
“Carelog has a very healthy customer base while Panalpina has the global network and profound industry expertise that will together allow us to service the international companies optimally. We are proud to become part of a larger family and reputable brand. And although we may merge with a global player we will always be conscious of our roots and stay flexible for and committed to our existing local customers,” adds Lars Engbo, managing director of Carelog. Engbo, who was one of the founders of Carelog, has been appointed as managing director of the new company that operates under the name of Panalpina Carelog.
“Panalpina and Carelog together create a respectable mid-sized freight forwarding and logistics company in Denmark and provide a solid foundation for further growth,” says Volker Boehringer, regional CEO Europe at Panalpina. “In a market that is dominated by few enterprises, we have now a broader geographical footprint and a stronger, more balanced product offering. The ambition is clearly to become a leading player in Denmark.”
The two companies have agreed not to disclose any financial details of the deal.
Posted at 21:15 パーマリンク
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