DHL posts revenue rise in 2018 as e-commerce and trade drive figures

posted on 7th March 2019 by Justin Burns
DHL posts revenue rise in 2018 as e-commerce and trade drive figures

Deutsche Post DHL Group’s revenue in 2018 was up 1.8 per cent in 2018 to 61.6 billion and operating profit (EBIT) came in at 3.2 billion – reaching the adjusted earnings target in June last year.

After adjusting for currency effects and portfolio changes, the revenue increase was even greater at six per cent and the Germany logistics giant said all four divisions (Express; Global Forwarding, Freight; Supply Chain; eCommerce Solutions) contributed to the positive trend.

The company said that growth was driven by the ongoing boom in the e-commerce sector globally as well as sustained growth in international trade flows.

Deutsche Post DHL Group chief executive officer, Frank Appel said: “2018 was a challenging year for Deutsche Post DHL Group, which we closed with a successful Christmas business.

“Despite rising geopolitical uncertainties, global trade continued to register growth. This benefitted our DHL divisions in particular.

“In our German post and parcel business, we initiated measures to secure the division’s long-term EBIT growth – and we consciously accept that this comes with a short-term burden on EBIT,”

“We have thus created the conditions for reaching our 2020 targets and for continuing to grow profitably in the years thereafter.”

Deutsche Post DHL Group is projecting an increase in operating profit to 3.9 to 4.3 billion in 2019. Structural and operating improvements in all Group divisions are expected to contribute to the increase.

As for each division in 2018, the longstanding upward revenue and earnings trend continued in the Express division. Revenue climbed by 7.3 per cent to 16.1 billion. The increase was even greater on an organic basis at 11 per cent. DHL said particularly encouraging was the division again registered growth across all regions.

The volume increase has enabled the division to utilise its unique global express network even more efficiently. Operating profit increased by 12.7 per cent to 2 billion on the back of strict yield management and continuous improvements in the network. The operating margin rose to 12.1 per cent, up from 11.5 per cent in the prior year.

The Global Forwarding, Freight division increased revenue by 3.4 per cent to 15 billion despite focusing on only high-margin business. Adjusted for negative currency effects, revenue improved by an even more substantial 6.7 per cent.

Gross profit for Global Forwarding, Freight, performed strongly with an increase of 3.9 per cent over the prior year to 3.6 billion. The division registered gross profit margin improvements in both air and ocean freight. Road and rail transport in Europe also showed a positive development. Operating profit surged 48.8 per cent to reach 442 million in 2018.

The Post – eCommerce – Parcel (PEP) division reported revenue growth of 1.7 per cent to to 18.5 billion in 2018. The upward trend was primarily attributable to higher revenue in the eCommerce – Parcel business unit. EBIT for the PeP division came to 656 million in the past financial year (2017: 1.5 billion).

Revenue in the Supply Chain division came in at 13.4 billion in the past financial year (2017: 14.2 billion). Operating profit amounted to 520 million, down from 555 million in the previous year.