“The goal of Strategy 2015 was to unleash the tremendous power of our organization, and to unlock our full potential. Since introducing the strategy in 2009, we have seen significant revenue growth and a disproportionate increase in operating profit. We are on course to achieve our Strategy 2015 goals,” said Deutsche Post DHL CEO Frank Appel. “Our new ‘Strategy 2020: Focus.Connect.Grow.’ builds on what we have achieved so far. It will power the Group’s next big growth stage and open up new opportunities for sustainable profitable growth in today’s ever-changing environment. Our aspiration is to be the leading force in the logistics industry by 2020 and the company that defines logistics.”
Financial goals: Significant earnings growth through 2020
The new strategy includes ambitious financial targets: For the period 2013 to 2020, the Group expects earnings growth of more than 8 percent per year on average based on the 2013 EBIT of €2.86 billion. The 2015 EBIT target of between €3.35 billion and €3.55 billion remains unchanged. Despite the general slowdown of growth momentum in the forwarding market, the Group expects its DHL divisions to continue to be the main contributor to the Group’s revenue and profitability growth, with an annual average EBIT growth of approximately 10 percent per year over the period. In addition, the Group also sees the strongly increasing importance of the parcel business powering an improvement in operating profit of around 3 percent per year on average for its MAIL division. Furthermore, the Group expects to reduce Corporate Center/Other expenses to below 0.5 percent of consolidated revenues through year 2020.
“Even with the significantly increased earnings level achieved over the last several years, our new strategy will enable us to continue on our growth path beyond 2015 and significantly increase our profitability year by year. And we will achieve this primarily through organic growth,” said Larry Rosen, the CFO of Deutsche Post DHL.
New strategy builds on the successful implementation of “Strategy 2015”
The announcement of its new strategy comes at a time when Deutsche Post DHL is feeling the full impact of its “Strategy 2015”. Despite the profound structural change within MAIL, the division’s earnings have been stabilized thanks to the successful expansion into high-growth segments such as the parcel business. The Group’s targeted efforts to further enhance DHL’s unique position in global growth markets and to expand its activities in highly attractive business segments such as international express delivery and contract logistics have also paid off. The Group has also made significant progress toward achieving its overarching goal of becoming the provider, employer and investment of choice within the logistics industry. This is reflected in continuously improving customer and employee survey results as well as the significant share price increase. At the same time, the Group lived up to its corporate responsibility and made a major positive contribution to society.
A three-pillar strategy: Focus.Connect.Grow.
Built upon the proven foundation of “Strategy 2015”, the Group’s new “Strategy 2020” will help the company anticipate and prepare early for changes in the market, in the competitor landscape, and in customer requirements. As far as trends go, the logistics industry is seeing a continuing shift towards emerging markets. The eCommerce segment, while posting accelerated growth, brings with it steadily increasing consumer demands in regard to the convenience and flexibility of delivery. As digitization also leads to changes in the competitive environment in the logistics markets, new opportunities and new business models for logistics companies are evolving. Moreover, customers are increasingly considering the company’s contribution to the environment and society when choosing a provider.
