DPDHL Presentation Strategy 2020 PDF

PRESS CONFERENCE
FRANKFURT AM MAIN, APRIL 2, 2014

OUR NEXT HORIZON: ACCELERATING ORGANIC GROWTH
Accelerating
organic expansion
Unlocking
our potential
Inorganic
expansion
Create the base
19901997 19982008 20092015 20142020
PRESS CONFERENCE | APRIL 2, 2014 PAGE 2

RECAP ON MAJOR FUNDAMENTAL STRATEGIC CHOICES
Defend and expand Stabilized MAIL EBIT above EUR 1bn

position in Germany Offset of mail revenue decline through parcel growth
Long-haul EXPRESS: Focus on Time Definite International strategy

international trade FORWARDING: Exploit global market share and growth
SUPPLY CHAIN: Take advantage of global outsourcing

Logistics outsourcing trend
Increase margin through contract lifecycle discipline

STRONG PROGRESS ALONG ALL DIMENSIONS
Customer Satisfaction (Scale 0-100)

(Example: DHL Express)
68 79
GoGreen
2009 2012
C 2 efficiency:
Provider of Choice +18% (2013)

(cp. to base year 2007)
Investment of Choice Employer of Choice
Business Performance Results of group-wide Employee Opinion Survey

Reported EBIT EUR bn Active Leadership Employee Engagement
(Scale 0-100) (Scale 0-100)
1.8 2.4 2.7 2.861 70 60 72
0.2 58
2009 2010 2011 2012 2013
2009 2013 2009 2013
STRUCTURAL MARKET TRENDS
Our markets are affected by four major actionable global trends
Continued global trade Acceleration of Accelerating impact of Increasing demands for

growth but shift in pattern eCommerce and more process technology and responsible business
demand for last-mile automation
solutions
Growth in long-haul trade More fine distribution Automation drives Increasing importance of
and transport slowing and direct shipping, efficiencies social and ethical
down also in B2B Importance of data behavior
Importance of emerging Multi-channel delivery leads to new ways of Growing need for greener
markets still increasing for B2C running businesses solutions

NEW STRATEGIC PLAN BUILDS ON SUCCESSFUL BASE
Our DPDHL Corporate Framework remains valid

Our Strategic Plan
Die Post fr Deutschland, STRATEGY 2020

Vision
The Logistics Company for the World
Mission Excellence. Simply delivered.

Focus.
Purpose
We connect people, improving their Connect.
lives.
Guiding Principles Respect & Results Grow.

3 Bottom Lines &
Goals
Living Responsibility

OUR STRATEGY 2020.
Focus. Connect. Grow.
We focus on what has made us We connect across the We expand in new

successful organization segments
Logistics as our core A global team Leader in eCommerce

1 1 1 related logistics
Committed to the needs Certified specialists Accelerate footprint

2 of our stakeholders & 2 for everything 2
shift towards
our planet we do emerging markets
A family of Connected approach in Tap new market

3
divisions operations, commercial, opportunities for
3 3 organic expansion
green solutions and
shared
to services
achieve quality leader-
to further expand margins. to achieve quality leadership to achieve sustainable
and service excellence. above-market growth.
We focus
on what has made us successful
to further expand margins.

We focus on what has made
us successful The rationale behind FOCUS.
Logistics continues to be an attractive industry

1 Logistics as our core
offering high growth and returns.
Committed to the needs Our focus on success criteria which are relevant
2 of our stakeholders & for our stakeholders has proven effective and will
our planet remain so in the future.
3 A family of divisions We want each division to be excellent in its focus

areas.
to further expand margins.

LOGISTICS MARKETS OFFER ATTRACTIVE GROWTH
Plenty of room to grow within logistics market1)
Market share DPDHL in total Share of market with

logistics market2) 4% significant DPDHL presence3) 19%
Attractive growth in key addressable market segments within logistics
Estimated Market CAGR 20112020
+8% +5-6%
+5-7% +5-6% +4-5%
+2-3%
Parcel Germany Parcel Domestic International Air Freight Ocean Freight Contract
International Express Forwarding Forwarding Logistics
1) 2011 data; 2) i.e. Global SameDay/ Courier, Parcel, Express, AFR, OFR, Ind. Proj., LTL, FTL and Cont. Logistics; 3) i.e. >5% market share (in value) in respective market

WE REMAIN COMMITTED TO OUR LETTER BUSINESS
IN GERMANY
The Post for Germany
1 Deutsche Post business and brand remain a key pillar for the Group.
Over the last years, substantial investments in physical infrastructure

2
and digital services have been made.
3 The efforts of the past years are paying off, and we remain committed.
MAIL Division is ready for new opportunities in eCommerce & Parcel.
MAIL Division becomes Post - eCommerce - Parcel Division (PeP).

COMMITTED TO THE NEEDS OF OUR STAKEHOLDERS
Customer Satisfaction Min. 80 Consistently

(Scale from 0-100) 7078 7079 group-wide >80
GoGreen
2010 2013 2015 2020 C 2 efficiency
improvement:
Provider of of
Provider Choice
Choice
+30% (by 2020)
Investment of Choice Employer of Choice
EBIT Employee Engagement & Active Leadership

(in EUR bn) >8% (% favorable votes) Consistently
3.353.55
CAGR 7072 min. 80 >80
0.23 2.86 5861
2009 2013 2015 2020 2009 2013 2015 2020

A FAMILY OF DIVISIONS
A team: Professional, diverse,

One global team
and in tune with market needs
Lean Corporate Center Focus on governance/ ownership tasks
Stand alone divisions

Connected by a common management
approach
Customer Solutions & Innovation

Joint key account management and
Selective Group-wide shared functions and services focused shared service unit

We connect
across the organization to achieve
quality leadership and service excellence.

We connect across the
organization The rationale behind CONNECT.
A highly professional and diverse management

1 A global team
group is essential in order to meet the rising bar.
Certified specialists Best-in-class team to achieve quality leadership

2 for everything we do and improve leadership.
Connected approach in
operations, commercial, An approach leveraging our global platform to
3 green solutions and shared create value as a Group (i.e. support and
services connections but no integration).
to achieve quality leadership and
service excellence.

PROVEN CIS PROGRAM EXTENDED GROUP-WIDE
Facts & Figures Integrating continuous Certified Specialist

DHL CIS Program process optimization Trainings Targets
Pioneer DHL Express Group implementation
100,000 Certified International The First Choice Way becomes Target state is >80% of all staff
Specialists since Dec. 2011 part of Certified trained until 2020
Delivered in >40 languages by
1,800 DHL Express employees Combination of: Executives 100%
that are trained as facilitators
- Class room sessions Managers >90%
Modular platform for each
- On the job training Supervisors & Staff >80%
country and function
- Specialized application

LEVERAGE PRE-EMINENT INTERNAL SKILLS
Sorting Automation/ Robotics Data Analytics
Capability building and stronger Automation agenda with cross- Pilots to solve divisional
leverage across Group divisional Operations Board to business issues and mine
Obertshausen Parcel site as review divisional activities DPDHL data
pilot to enhance expertise Divisions to drive pilots and
applications

LEVERAGE EXCELLENCE IN GREEN LOGISTICS
SOLUTIONS
Target 2020
C 2 efficiency:
Next development level:
+30% 2 GoGreen 2.0 GoGreen Solutions
Focus today: Make a difference with

1 GoGreen Efficiency
customers
Success examples Action areas

First efficiency target, carbon Commercialize green products
accounting and controlling in and services
industry Focus on optimizing customer
Role modeling in alternative fleet supply chains
Climate-neutral shipping Help customers achieve CO2 and
Driving industry standards efficiency aspirations

We expand
in new segments to achieve
sustainable above-market growth.

We expand in new segments The rationale behind GROW.
We want to create value by utilizing our existing

Leader in eCommerce
1 related logistics
capabilities to build new businesses and grow
organically.
Accelerate footprint shift
We want to continue being a leader in fast growing
2 towards emerging
markets.
markets
Tap new market opportunities

3 for organic expansion We want to serve changing customer needs and
tap new sources of growth.
to achieve sustainable above-

market growth.

EMERGING MARKETS CONTINUE TO GROW STRONGER
Macro trends continue to support high Growth differential expected to continue

growth in emerging markets
Demographics, e.g. India and China to GDP, real, CAGR 2011-2020e

provide >50% of increase in global
workforce with college education by 2030 in % 5.4
2.0
Continuing urbanization, e.g. in China
expected to reach 70% by 2030
Mature Markets Emerging Markets
Growing consumer base, e.g. global
USA China
middle class set to grow 2.6 fold by 2030
with 90% coming from Asia Pacific UK India
Japan Brazil
Western Europe South East Asia


OUR AMBITION FOR THE EMERGING MARKETS
Group revenue footprint
30% emerging
78% 70%
market footprint is
ambitious but
22% 30% realistic
Today Target
2013 2020 target
Mature Markets Emerging Markets

LEADER IN eCOMMERCE-RELATED LOGISTICS
eCommerce trend is a structural growth trend for logistics businesses
Domestic Parcel business driving strong eCommerce growth in Germany
International domestic and cross-border parcel activities already in DHL portfolio
Opportunity to expand eCommerce and parcel activities internationally
MAIL Division becomes Post - eCommerce - Parcel (PeP)
Leveraging its two strong brands

The Post for Germany and
the global eCommerce enabler

KEY BUILDING BLOCKS OF PeP BUSINESS STRATEGY
Internationalization Our guiding principles:

We offer innovative
services based on Defend physical mail
our our core
competencies Enter into the digital world
We are the Restructure international
trusted Digital Diversification business
communications
Develop eCommerce to drive
and target-
parcel
oriented
advertising Diversify based on core
provider online We are the competences
& offline leading parcel
and
Parcel / eCommerce
Physical mail
e-Commerce service provider

OVERALL UNCHANGED VOLUME TRENDS IN GERMANY
Volume Development
Overall volumes in Mail

in bn items in bn items
Germany declined at an 1.026
7.96
average rate of only 1.8%
0.761
Mail 7.82 through Strategy 2015 Parcel
Germany
Communication Mail Communication
benefitted from discontinuation 2009 2013
2009 2013
of product Infobrief in 2013
Dialogue Marketing volumes
continue to be under pressure
Parcel Germany continues to
10.90 21.16
show strong development. Mail
Germany
Dialogue 9.75 Market growth rates should 19.65
Marketing
come down slightly (expected
CAGR ~ 6%)
2009 2013 2009 2013

PeP: PERFORMANCE & HIGHLIGHTS STRATEGY 2015
PeP Strategy 2015:

Weve put down solid roots for future growth
Investment
of Choice 2009 2010 2011 2012 2013 2014 2015
Estimate
EBIT 1.4 1.1 1.1 1.21) 1.2 ~1.2 1.1

EUR bn
Customer
Employer Provider 93% 93% 95% 96% 95% 95% 95%
of Choice of Choice Satisfaction
Employee
66% 74% 76% 77% 76% 80% 90%
Satisfaction
1)excluding VAT impact EUR 151m

STRATEGIC EVOLUTION OF PeP DIVISION
2007 2014 2020
Restructuring Growth
Stabilization of the traditional letter mail business Internationalization of the successful German Parcel
and build-up of domestic parcel operations Strategy
Defend Germany Transfer of domestic parcel business in Poland,
Domestic mail volume development stabilized BeNeLux, Czech Republic and India to PeP
- e-substitution remains the key challenge long-term
Expansion and entries into additional domestic parcel
E-Post established in the market for digital markets in APAC/ Americas
communication
Stabilisation of classic letter mail operations remains a
Strategic realignment of Global Mail completed key challenge
Successful build-up of DHL Paket as innovation and Expansion of digital services
market leader in Germany Increase profitability in Mail Communication
Appointment of PeP Division as global lead division

Vision: Global No. 1 eCommerce service provider
for eCommerce logistics services!

eCOMMERCE ACCELERATION: OPPORTUNITY & THREAT
Opportunity Threat
Parcel domestic market revenue Logistics companies eCommerce

2011 2020 venturing into companies venturing
eCommerce to into logistics to
Emerging Markets +11% p.a. support logistics support
eCommerce
Mature Markets +7% p.a.
Mainland China +15% p.a.
Global CAGR 20112020: +8% New competitors entering the market

MAIL DIVISION BECOMES Post - eCommerce - Parcel
Two main businesses, leveraging their existing strong brands
Sub-divisiion
Sub-division Post
eCommerce & Parcel
The Post for Germany The global eCommerce enabler

includes
includes
Mail Communication
Germany
E-Post
Europe
Dialogue Marketing
International
Presse Services
Cross-Border/Intercontinental
Export/Import Germany
Brand power, expertise and resources necessary to meet our ambitious growth targets

DHL PAKET SUCCESSFUL MODEL IN GERMANY
Consumer centric innovation leader on the first and last mile in Germany
EXAMPLES
DHL Paketshops Private parcelbox
Packstation Grocery delivery
Evening delivery/
Shopping platforms
Flexible delivery

eCOMMERCE & PARCEL: SERVICE PORTFOLIO
CROSS-BORDER
eFACILITATION eFULFILLMENT DELIVERY eCOMMERCE
0
50 10
40 20
30
Marketplaces Domestic eFulfillment Multichannel International B2C

Marketing services (incl. value added domestic delivery shipping
Payment solutions services) and return1) Combined with intl
In collaboration with eFulfillment and
DHL Supply Chain eFacilitation services
1) Incl. intra-EU delivery and return

SUBDIVISION DHL eCommerce & Parcel
The key element of future profit growth
DHL Parcel DHL eCommerce

Parcel Germany Parcel Europe Americas Asia
Continue success Leverage & invest in

story businesses transferred Build on existing businesses
Expand and innovate from DHL(BeNeLux,
Global Mail US
production capacity PL, CZ)
Blue Dart India
Invest in new service Re-orient and broaden
service offering International B2C shipping services/ Domestic
features, e.g. private
towards B2C and destination based eFulfillment as a start in
parcelbox,
emerging markets
allyouneed.com Gradually expand
European coverage Aspiration: Integrated offer of all eCommerce-
related logistics and eFacilitation services

OUR ASPIRATION:
LEADER IN eCOMMERCE-RELATED LOGISTICS
Our Aspiration for 2020 Our assets to get there
Further grow and maintain No. 1 position Passion to win

in Germany
Love for our customers
No. 1 for x-border eCommerce services on Great entrepreneurs

most attractive international trade lanes Strong brands
World-class processes
Top 3 of domestic B2C delivery and
eCommerce logistics in selected markets Support by family of divisions

Financial outlook & aspiration

FINANCIAL PERFORMANCE 2009-2013
2.4 2.7 2.861

1.8
Strong increase in Group EBIT 0.2
in EUR bn
2009 2010 2011 2012 2013
Supported by strong EBIT performance in all Divisions

1,133 483
1,391 1,226 441
174
-790 -216
in EUR mn
2009 2013 2009 2013 2009 2013 2009 2013
MAIL/PeP EXPRESS FORWARDING,FREIGHT SUPPLY CHAIN
2.500
1.6
1.500
Driving turnaround in Free Cash Flow 0.5 0.7 0.7
500
in EUR bn
-500 -0.2
1) Adjusted for non-recurring items
-1.500 2009 2010 2011 1)
20121) 2013
2009 2010 2011 2012 2013
FINANCIAL OUTLOOK AND ASPIRATIONS
Further revenue and earnings growth expected
Investments to remain at current levels to take full advantage

of attractive growth opportunities
Free Cash Flow generation to continue positive and

increasing
Financial policy unchanged

2020 TARGETS
2015 EBIT targets confirmed, new 2020 targets introduced
EBIT 2013 base1) FY 2015 FY 2020
PeP2) EUR 1.286bn Min. EUR 1.1bn ~3% CAGR 2013-2020
DHL EUR 1.997bn EUR 2.6-2.8bn ~10% CAGR 2013-2020
CC/ Other EUR -422m ~ EUR 350m < 0.5% of Group revenue
Group EUR 2.861bn EUR 3.35-3.55bn >8% CAGR 2013-2020
Free Cash Flow generation to remain priority

No ambition for major M&A
Finance policy including payout ratio range to remain unchanged
1) Adjusted for 2013 EBIT of ~ EUR 60m from transfer of assets from DHL to PeP effective on Jan. 1, 2014
2) POST - eCOMMERCE - PARCEL

MAJOR INVESTMENTS PLANNED FOR 2014
2014 Gross Capex guidance (EUR 1.9bn)

Major projects:
Investments into new international Parcel businesses

PeP
Continuation of Parcel 2012 investment program
Network investment, mainly aviation/ aircraft

EXPRESS
Extention Leipzig Hub
FORWARDING,
New Forwarding Environment
FREIGHT
SUPPLY
Significant new business wins
CHAIN

NO CHANGE IN M&A STRATEGY
Goal Recent M&A history

Continued focus on organic growth
(in EUR m)
2009 2010 2011 2012 2013
0
M&A Objectives
-100
Bolt-on acquisitions to support strategies and new -200
growth initiatives of divisions -300
Further small disposals where necessary to -400
optimize divisional business portfolios
Conclusion
No significant increase in M&A spend expected Net cash from M&A
Cash-out related to disposal of domestic Express activities

FREE CASH FLOW DEVELOPMENT 2009-2013
Turnaround in FCF generation lays base for further improvement

Major drivers:
OCF Net Capex Net Cash from M&A FCF

(in EUR m)
2.500
2,500
1,500
1.500
500
-500
-1.500
-1,500
1) 1)
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
1) Adjusted for non-recurring items

CONFIRMATION OF FINANCE POLICY
Target/ maintain rating BBB+
Deployment of Free Cash Flow
Dividend payout ratio to remain between 40-60% of net profit (continuity and Cash Flow performance
considered)
Excess liquidity will be used for

Stepwise pension funding
and/ or
Share buybacks and/or extraordinary dividends

Recap Strategy 2020
PRESS CONFERENCE | APRIL 2, 2014

OUR STRATEGY 2020.
Focus. Connect. Grow.
We focus on what has made us We connect across the We expand in new

successful organization segments
Logistics as our core A global team Leader in eCommerce

1 1 1 related logistics
Committed to the needs Certified specialists Accelerate footprint

2 of our stakeholders & 2 for everything 2
shift towards
our planet we do emerging markets
A family of Connected approach in Tap new market

3
divisions operations, commercial, opportunities for
3 3 organic expansion
green solutions and
shared
to services
achieve quality leader-
to further expand margins. to achieve quality leadership to achieve sustainable
and service excellence. above-market growth.
OUR ASPIRATION FOR 2020: DEFINING OUR INDUSTRY
When people think of logistics,

we want them to think DPDHL
WE are the most global

WE are the quality leader
WE are most customer-centric

PRESS CONFERENCE
FRANKFURT AM MAIN, APRIL 2, 2014

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PRESS CONFERENCE

FRANKFURT AM MAIN, APRIL 2, 2014

19901997 19982008 20092015 20142020

PRESS CONFERENCE | APRIL 2, 2014 PAGE 2

Defend and expand Stabilized MAIL EBIT above EUR 1bn

Long-haul EXPRESS: Focus on Time Definite International strategy

SUPPLY CHAIN: Take advantage of global outsourcing

PRESS CONFERENCE | APRIL 2, 2014 PAGE 3

Customer Satisfaction (Scale 0-100)

Provider of Choice +18% (2013)

Investment of Choice Employer of Choice

Business Performance Results of group-wide Employee Opinion Survey

Our markets are affected by four major actionable global trends

Continued global trade Acceleration of Accelerating impact of Increasing demands for

PRESS CONFERENCE | APRIL 2, 2014 PAGE 5

Our DPDHL Corporate Framework remains valid

Die Post fr Deutschland, STRATEGY 2020

Mission Excellence. Simply delivered.

Guiding Principles Respect & Results Grow.

PRESS CONFERENCE | APRIL 2, 2014 PAGE 6

We focus on what has made us We connect across the We expand in new

Logistics as our core A global team Leader in eCommerce

Committed to the needs Certified specialists Accelerate footprint

A family of Connected approach in Tap new market

PRESS CONFERENCE | APRIL 2, 2014 PAGE 8

Logistics continues to be an attractive industry

3 A family of divisions We want each division to be excellent in its focus

to further expand margins.

PRESS CONFERENCE | APRIL 2, 2014 PAGE 9

Plenty of room to grow within logistics market1)

Market share DPDHL in total Share of market with

Attractive growth in key addressable market segments within logistics

Estimated Market CAGR 20112020

PRESS CONFERENCE | APRIL 2, 2014 PAGE 10

The Post for Germany

Over the last years, substantial investments in physical infrastructure

MAIL Division is ready for new opportunities in eCommerce & Parcel.

MAIL Division becomes Post - eCommerce - Parcel Division (PeP).

PRESS CONFERENCE | APRIL 2, 2014 PAGE 11

Customer Satisfaction Min. 80 Consistently

Investment of Choice Employer of Choice

EBIT Employee Engagement & Active Leadership

PRESS CONFERENCE | APRIL 2, 2014 PAGE 12

A team: Professional, diverse,

Lean Corporate Center Focus on governance/ ownership tasks

Stand alone divisions

Customer Solutions & Innovation

PRESS CONFERENCE | APRIL 2, 2014 PAGE 13

PRESS CONFERENCE | APRIL 2, 2014 PAGE 14

A highly professional and diverse management

Certified specialists Best-in-class team to achieve quality leadership

PRESS CONFERENCE | APRIL 2, 2014 PAGE 15

Facts & Figures Integrating continuous Certified Specialist

Pioneer DHL Express Group implementation

PRESS CONFERENCE | APRIL 2, 2014 PAGE 16

Sorting Automation/ Robotics Data Analytics

PRESS CONFERENCE | APRIL 2, 2014 PAGE 17

Focus today: Make a difference with

Success examples Action areas

PRESS CONFERENCE | APRIL 2, 2014 PAGE 18

PRESS CONFERENCE | APRIL 2, 2014 PAGE 19

We want to create value by utilizing our existing

Tap new market opportunities